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ConocoPhillips profits up, Alaska production down

Pat Forgey
Courtesy photo

JUNEAU -- ConocoPhillips profits rose in Alaska last quarter, even as Alaska production fell, the company announced Thursday.

The company's earnings in the quarter ending June 30 were $627 million, up from $598 million in the first quarter. Oil production fell by 7,000 barrels of oil equivalent per day, to 193 million BOE, during the quarter. 

The company attributed the decline to planned downtime and normal field decline, partially offset by new drilling.

Conoco's companywide profits increased during the quarter, to about $2 billion, compared to $1.75 billion in the same quarter last year, excluding special items, or about 12.5 percent. 

Conoco's fellow North Slope producers, ExxonMobil and BP, release less detail on company finances in Alaska than Conoco does but also reported profitable quarters overall. Exxon saw profits increase by 28 percent, while BP saw increases of 36 percent. 

The second-quarter earnings release is the last before the August vote on an initiative seeking to repeal Senate Bill 21's tax cuts, and Conoco executives weighed in on the issue during a conference call with Wall Street stock analysts Thursday morning.

"Alaskans will vote in August on whether to uphold the More Alaska Production Act, commonly known as SB 21. We certainly hope the legislation prevails; we believe it is important for continued oil and gas development in Alaska," said  Matt Fox, executive vice president for exploration and production.

That's already happening, he said.

"We have identified and are actively developing opportunities for growth," he said.

But state Sen. Hollis French, D-Anchorage, saw a different message for Alaskans in Conoco's profits.

"I think Alaskans need to to be aware that Conoco has continued to make outsized profits in Alaska compared to nearly anywhere else on earth," he said.

"Conoco's complaint that they needed tax relief rings hollow in the face of these enormous earnings," French said.

In Alaska, ConocoPhillips said that during the quarter it paid $872 million to the state and federal governments in a variety of taxes and royalties. But the company declined to say how much of that was in production taxes, calling that "taxpayer confidential" information. 

That makes it difficult to determine the impact of SB 21, because as Conoco's pre-tax profits rise, the federal government's basic 35 percent corporate tax rate takes a larger share of the value produced by Alaska's oil fields. 

Contact Pat Forgey at pat@alaskadispatch.com.