Competitive Framework for Alaska: 2012
Deficiencies
Nonsensical cross subsidization of gas
Table 5.1.3.1-1 Incremental Gas Economics for ACES in Alaska
(Country Incremental, Real)
Oil production (mln bbls)
Gas production (Bcf)
Oil price ($/bbl) North Slope
Oil only
500
O
100
Oil + Gas Incremental
500
10000
100
10000
100
Gas Price ($/MMBtu) North Slope
Gross Revenues ($ mln)
50000
Total Production (MIN BOE)
500
Capital Expenditures ($ mln)
7500
1.0
60000
2167
11000
1.0
10000
1667
3500
Operating Expenditures ($ mln)
5000
7500
2500
Divisible Income ($ mln)
37500
41500
4000
Royalties ($ mln)
6250
7500
1250
Property Tax, other
852
1504
652
Production Tax Value
30398
32496
2098
Production Tax Value per BOE
60.80
15.00
-46
PPT ($ mln)
Corp Income Tax (State) ($ mln)
Total State Revenues ($ mln)
15186
6900
-8286
1466
23754
2474
1008
18378
-5376
Corporate Income Tax (Fed) ($ mln)
Total Government Revenues ($ mln)
4942
28696
8340
26719
3398
-1977
Undiscounted Government Take
IRR
76.50%
21.10%
64.40%
19.30%
-49.3%
17.3%
The BOE concept would result in massive government revenue
losses on oil production if incrementally also gas would be
developed. This does not make any sense. It is clear that Alaska
would not accept such unnecessary losses. This in turn impedes
gas project development.
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