Asks What the State Can Do to Make Alaska More Attractive
December 10, 2003
"We are looking to find out what we can do better to make Alaska's oil and gas province more attractive for investment of your exploration dollars," Murkowski said. "During the last session of the legislature, we embarked on a process to help make Alaska more competitive, through enhanced exploration incentives, and streamlining and reform of the permitting process, for example. We are willing to do more. This is not business as usual anymore."
Among issues broached by the participants in the meeting were revising the tax credit incentive to make it more saleable by independent explorers to producers, who can apply the credit to their production taxes. The suggestion was also made to expand the credit to state income taxes.
Facility access on the North Slope is a particular roadblock that the Governor has agreed to work on. Independents said they are stymied in many of their efforts by not knowing if the pipeline owners will grant them access to ship their oil, once it is developed. Another major issue is the pipeline tariff and the fact that it often determines whether marginal oil reserves will be produced or left in the ground.
Murkowski and the companies also briefly discussed issues such as access to clean-up equipment and the fact that the federal Jones Act requirement that shipments from other American ports to the North Slope can add millions of dollars in the cost of mobilizing and demobilizing from an exploration effort.
One independent representative also noted that their oil is often valued differently by the Department of Natural Resources for royalty purposes from the value given by the Department of Revenue for taxation purposes.
Acknowledging that high risk
produces high rewards, Murkowski promised to continue to work
to open Alaska oil patches on the North Slope, the Alaska Peninsula
and Cook Inlet to independents.
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