ConocoPhillips continues to invest in Alaska: tax regime limits activity.

• Author: Orr, Vanessa
• Position: OIL & GAS

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For more than 50 years, ConocoPhillips has played a major role in the development of Alaska's oil and gas industry. As the largest oil producer and one of the largest gas producers in the state, the company employs nearly 1,100 people through its facilities on the North Slope and in Southcentral Alaska, and at its headquarters in Anchorage. In addition, the company indirectly employs thousands of contractors' employees. In 2011, ConocoPhillips earned $1.9 billion in Alaska, and paid an estimated $4 billion in taxes and royalties to the state while producing 215,000 barrels of liquid a day. It spent $775 million out of a proposed $900 million budget; the same amount that it has budgeted for Alaska this year.

ConocoPhillips' current holdings in the state include significant ownership interests in three oil fields located on the North Slope--Kuparuk (56 percent), Prudhoe Bay (36 percent) and Alpine (78 percent), which the company operates. In Southcentral Alaska, ConocoPhillips has 100 percent ownership and operates the Kenai liquefied natural gas plant and the Tyonek platform in North Cook Inlet. ConocoPhillips operates the Beluga River natural gas field, of which it owns 33 percent, and is also a 28.3 percent owner in the TransAlaska Pipeline System.

In 2012, ConocoPhillips made headlines by aligning with other oil and gas giants BP, ExxonMobil and Canadian pipeline operator TransCanada to work on a plan to commercialize North Slope natural gas resources within an Alaska Gasline Inducement Act framework as an alternative to a natural gas pipeline through Alberta. The company also recently took part in developing groundbreaking technology to get methane gas out of hydrates on the North Slope that could result in a potential new gas source in the future.

ConocoPhillips also completed a major corporate restructuring within the past year, changing from one large integrated oil and gas company to two large companies that handle upstream and downstream operations separately. "ConocoPhillips will be focusing on its core competencies as an independent exploration and production company, while the downstream company, Phillips 66, will focus on its core competencies," says Trond-Erik Johansen, president, ConocoPhillips Alaska. "Alaska really won't see any changes, because we've always been an upstream company here."

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