Alaska Oil & Gas Association Production Decline Signals Need for Change Presentation to Employees of BP Alaska Kara Moriarty AOGA Deputy Director February 28, 2011
AOGA Member Companies
What is AOGA? Alaska s oil and gas trade association since 1966 Purpose 1) Serve as a single point of contact for Alaskans on the state s oil and gas industry 2) Provide a forum for discussion and a point of decision on issues that affect the industry Goal A vital oil and gas industry that contributes to a vibrant economy for Alaska
Production Forecast In 10 years, the state forecasts 51% of total production will be new oil. Even with this new oil, the state is forecasting a 19% reduction in total production in 10 years.
Barrels per day (in millions) Investment is Crucial to Stem Decline 1.2 1 0.8 0.6 0.4 0.2 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Currently Producing Under Development Under Evaluation
Barrels per day (in millions) Forecast is down 20% from Five Years Ago 0.90 0.80 832,000 bpd 762,000 bpd 0.70 0.60 644,000 bpd 608,000 bpd 0.50 0.40 Fall 2005 Forecast Fall 2010 Forecast 0.30 0.20 0.10 0.00 2010 2015 Source: Department of Revenue
Barrels per day (in millions) Current Forecast Will be Off 0.65 0.64 642,000 0.63 0.62 616,000 622,000 617,000 629,000 Fall 2010 Forecast 0.61 0.6 603,000 598,000 Fall 2010 Forecast Minus Liberty 0.59 0.58 0.57 2011 2012 2013 2014 Source: Department of Revenue
Important Production Facts In 10 years, the State forecasts half of Alaska s production will be from New Oil. Even with this new oil, the State is forecasting production will decline by 124,000 bpd in 10 years. 98% of the production in 2020 will be from oilfields located in current unit boundaries. Legacy fields continue to dominate production forecast as Prudhoe and Kuparuk will still provide 63% of production in 2020 so new oil is forecasted to come from legacy fields too.
Where will the Oil come from? North Slope Reserves Estimates Developed or Delineated Oil Remaining MMBO Colville River (Alpine) 420 Duck Island 102 Kuparuk River 990 Milne Point 210 Northstar 64 Prudhoe Bay 2,450 Oooguruk 73 Nikaitchuq 187 Liberty 114 Point Thomson 417 NPRA 140 Total North Slope 5,166 Source: Alaska Division of Oil & Gas, 2009 Alaska Oil & Gas Report
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Development Takes Time Nikaitchuq 6 years Oooguruk 5 Liberty Alpine West (CD 5) 14 and Counting 10 and Counting Fiord (CD 3) 7 Nanuq (CD 40 5 Field Discovery Development Approved Production Begins
Alaska has Oil Needs Investment North Slope Reserves Estimates Developed or Delineated Oil Remaining MMBO Status Colville River (Alpine) 420 Already Producing Duck Island 102 Already Producing Kuparuk 990 Already Producing Milne Point 210 Already Producing Northstar 64 Already Producing Prudhoe Bay 2,450 Already Producing Oooguruk 73 Already Producing Nikaitchuq 187 Already Producing Liberty 114 Beyond 2013 Point Thomson 417 2014-2015 NPRA 140?? Total North Slope 5,166 Source: Alaska Division of Oil & Gas, 2009 Alaska Oil & Gas Report
Number of Wells Exploration Wells Drilled On North Slope 20 18 16 14 12 10 8 6 4 2 0 2005 2006 2007 2008 2009 2010 2011 Source: Alaska Oil & Gas Conservation Commission & Department of Natural Resources
Arctic Lease Status Source: Mapmakers Alaska - GIS-Arctic Oil & Gas database 10 9 8 7 6 5 4 3 2 1 0 Total Acres Under Lease 2005 2006 2007 2008 2009 2010 2.5 Acres Relinquished 2 1.5 1 0.5 0 2005 2006 2007 2008 2009 2010
Global Fiscal terms ranking 4.5 4.0 Alaska ranked 117 th out of 129 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Uganda Jordan Austria Spain Morocco Ireland France New Zealand Canada (Nova Scotia) Poland Eritrea Ethiopia UK Kenya Hungary Guinea Croatia Mozambique Faroe Islands Sierra Leone Democratic Rep of Congo USA (Oklahoma) Mali Iceland USA (Texas) Benin Australia Canada (British Columbia) USA (Colorado) Colombia Sri Lanka Togo Yemen Denmark Guinea Bissau India Cote d'ivoire Timor Leste Australia JPDA Source : Wood Mackenzie Petroleum Fiscal systems January 2010 Bahrain Albania Tunisia Sudan Barbados Mauritania Cambodia USA (Gulf of Mexico) Libya Brazil Egypt Pakistan Malaysia Malaysia Thailand JDA Congo-Brazzaville Algeria Tanzania Azerbaijan Canada (Saskatchewan) Indonesia USA (Alaska) Uzbekistan Ukraine Kazakhstan Venezuela Angola Ecuador
HB 110 New Policy for Alaska AOGA Supports HB 110 & Governor Parnell s Goals of: Making Alaska More Competitive Creating More Jobs Increasing Production
3.5 AOGA s Position on Elements of HB 110 Global Fiscal terms ranking Element of HB 110 4.5 Progressivity Rates/Bracketing/ 4.0 Tax Cap AOGA Position Support 40% 3.0 Tax Credit Support Alaska ranked 129 th out of 141 2.5 Yearly Tax Calculation 2.0 Effective 1.5 Dates 1.0 New Rate for New Fields 0.5 Reducing 0.0 Interest Rate; Statute of Limitations Minimum Tax Uganda Jordan Austria Spain Morocco Ireland France New Zealand Canada (Nova Scotia) Poland Eritrea Ethiopia UK Kenya Hungary Guinea Croatia Mozambique Faroe Islands Sierra Leone Democratic Rep of Congo USA (Oklahoma) Mali Iceland USA (Texas) Benin Australia Canada (British Columbia) USA (Colorado) Colombia Sri Lanka Togo Yemen Denmark Guinea Bissau India Cote d'ivoire Timor Leste Australia JPDA Source : Wood Mackenzie Petroleum Fiscal systems January 2010 Bahrain Albania Tunisia Support Concern Support/Concern Support Sudan Barbados Mauritania Cambodia USA (Gulf of Mexico) Concern Libya Brazil Egypt Pakistan Malaysia Malaysia Thailand JDA Congo-Brazzaville Algeria Tanzania Azerbaijan Canada (Saskatchewan) Indonesia USA (Alaska) Uzbekistan Ukraine Kazakhstan Venezuela Angola Ecuador
Things you can do 4.5 Thank 4.0 the Governor 3.5 2.5 1.5 0.0 The Time is Now! Global Fiscal terms ranking Contact Your Representative & Senator 3.0 www.prosperityalaska.org 2.0 Participate in Constituent Meetings Uganda Jordan Austria Spain Morocco Ireland France New Zealand Canada (Nova Scotia) Poland Eritrea Ethiopia UK Kenya Hungary Guinea Croatia Mozambique Faroe Islands Sierra Leone Democratic Rep of Congo USA (Oklahoma) Mali Iceland USA (Texas) Benin Australia Canada (British Columbia) USA (Colorado) Colombia Sri Lanka Togo Yemen Denmark Guinea Bissau India Cote d'ivoire Timor Leste Australia JPDA Source : Wood Mackenzie Petroleum Fiscal systems January 2010 Alaska ranked 129 th out of 141 Participate 1.0 in Anchorage Town Hall March 26; 10 AM 1 PM Anchorage 0.5 Assembly Chambers Loussac Library Become an AOGA Friend on Facebook Sign up for Tweets from AOGA Bahrain Albania Tunisia Sudan Barbados Mauritania Cambodia USA (Gulf of Mexico) Libya Brazil Egypt Pakistan Malaysia Malaysia Thailand JDA Congo-Brazzaville Algeria Tanzania Azerbaijan Canada (Saskatchewan) Indonesia USA (Alaska) Uzbekistan Ukraine Kazakhstan Venezuela Angola Ecuador
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