In connection with ConocoPhillips’ third-quarter 2021 earnings released Nov. 2, ConocoPhillips Alaska reported a net income of $405 million in the third quarter of 2021.
During this time, ConocoPhillips Alaska paid an estimated $369 million in taxes and royalties, of which an estimated $301 million was paid to the state of Alaska and approximately $68 million was paid to the federal government.
Year-to-date 2021, ConocoPhillips Alaska has paid an estimated $980 million in the form of taxes and royalties of which an estimated $807 million was paid to the state and an estimated $173 million was paid to the feds.
Additionally, in the third quarter 2021, ConocoPhillips Alaska invested $235 million in the state of Alaska, which represents approximately 18% of the corporation’s global capital expenditures and investments. Year-to-date 2021, ConocoPhillips Alaska has invested $698 million on projects in Alaska, which is 19% of the corporation’s global capital expenditures and investments.
“Our continuous investment in projects on the North Slope benefits Alaska’s future,” said Erec Isaacson, president, ConocoPhillips Alaska. “GMT2 and Fiord West will soon be coming into production and will provide new revenue for the North Slope communities and the state. Projects like these continue to create hundreds of jobs in Alaska and contribute to a stable Alaska economy.”
The “Beast,” Doyon 26, is a large extended reach drilling rig that is drilling Fiord West, which the company has said in the past is expected to produce some 20,000 barrels of oil per day at its peak.
The $1.4 billion GMT2 project is expected to produce 35,000 to 40,000 barrels per day at its peak, per past comments from ConocoPhillips.
Since 2007, ConocoPhillips Alaska has paid over $39 billion in taxes and royalties to the state of Alaska and the federal government. Of that amount, about $31 billion went directly to the state. In that same period, ConocoPhillips Alaska’s earnings have been approximately $22 billion.
Willow update
In ConocoPhillips third quarter conference call Q & A session, Roger Read, a senior equity research analysts with Wells Fargo Securities, asked: “What’s been going on in Alaska … Willow can’t go forward, what do we think about in terms of other opportunities in Alaska?”
Nick Olds, ConocoPhillips executive VP of global operations, replied: “Just maybe a quick update on Willow. As you’ve probably seen in the press, both the Department of Justice and ourselves decided not to appeal the Alaska District Court decision. We feel the best and most efficient approach there is to really work through the three substantive issues that were identified in the district court ruling. We’ll do that through additional NEPA analysis. We’re currently engaged with the BLM and the cooperating agencies up there, just working through those three particular issues.”
Olds continued, saying: “As you look forward, as we’ve mentioned, we continue to work through our detailed engineering in service of continued refinement of our cost and schedule and any development modifications (for Willow), all in service of doing an FID. If you look at 2022, our capital program … will reflect the continued engineering work. And then from a shareholder standpoint, we still see significant support from the Alaska delegation, the state of Alaska as well as the North Slope Borough. So we remain committed on this front.”
Coyote and Nuna
“As far as other projects, we spoke about in the June 30 market update, in part, as an example, we’ve got Nuna, we’ve got Coyote. These will leverage existing infrastructure, so existing pads, facilities and pipelines, very low cost of supply opportunities that we’re progressing,” Olds said.
The Coyote discovery is just west of the Kuparuk River unit and likely another in a long line of North Slope Nanushuk or Torok discoveries.
In 2019 Caelus Alaska sold ConocoPhillips the Nuna prospect. When applying to Alaska’s Division of Oil and Gas to add the 21,000-acre prospect to the KRU, ConocoPhillips said that development of the expansion area through existing KRU facilities would not require standalone processing facilities and said the reserves in the expansion area “are not large enough to support the costs of full processing facilities.”
