ConocoPhillips is keeping its capital investment in Alaska similar to last year's levels, when oil prices were much higher, a notable difference from other regions around the world where the oil giant has sharply slashed investments, according to financial information released Thursday.
To support capital projects in Alaska, ConocoPhillips spent $304 million in the third quarter of the year -- down from $369 million in the same period last year.
Alaska profits are also a bright spot in the company's global portfolio with earnings of $63 million, but given the capital investments, the company is "spending a lot more than it's making," said Natalie Lowman, communications director for ConocoPhillips Alaska.
"The company is investing differently in Alaska because of the opportunity we have and because of an improved business climate," she said. "And when we invest, that brings new production and provides new construction and jobs."
ConocoPhillips executives reported the information as part of the company's third-quarter results on Friday in a conference call with large investors. They were quick to note the new production in Alaska this month coming from Drill Site 2s and CD5.
Matt Fox, the executive vice president for exploration and production, said in the conference call that Alaska production will stay "relatively flat for the next several years."
Company officials in Alaska have said the continued investment in the state has been due in part to the state's 2013 tax overhaul.
With $63 million earned by ConocoPhillips in Alaska, the state represented only one of two regions in the world where the company saw positive earnings for the quarter. Earnings were also positive in the Asia Pacific and Middle East region, at $302 million.
Losses were high in other regions, such as $463 million lost in the Lower 48.
With oil prices low, the state expects to collect about $300 million in production taxes this year from oil production on the North Slope, which comes primarily from ConocoPhillips, BP and ExxonMobil.
The production tax income is a dramatic drop from the $2.6 billion made last year.
ConocoPhillips' capital investment is down sharply in other regions of the world, with a 32 percent drop worldwide, said Lowman. But investment in Alaska is $1.1 billion so far for the year, compared to $1.2 billion at the same time last year.
ConocoPhillips said it's planning to invest $1.4 billion in Alaska this year, said Lowman. That's a drop from last year's $1.6 billion, but a relatively small one compared to other regions.
"We're still investing," she said.
Alaska Dispatch Publishing