“Clearly one of the most important things when a company looks at an area is stability of fiscal terms…” A Papua New Guinea oil company that’s new to Alaska is hiring workers to appraise and develop a large North Slope discovery — bucking a trend that’s seen the state’s industry workforce slashed and companies leaving. Oil Search last year acquired a $400 million stake in the Nanushuk field, a discovery announced by Armstrong Oil and Gas and Repsol in 2015. Geologists estimate the discovery is one of the largest in Alaska. Oil Search plans to find out just how big it is. The company operates oil and gas fields in Papua New Guinea. Its partners include ExxonMobil and Total. In late March, Oil Search officially took over as the Nanushuk operator. The company’s work could provide a big economic boost to the state, said Keiran Wulff, head of Oil Search in Alaska. The Anchorage Daily News spoke with Wulff last week at the downtown Anchorage building, Peterson Tower, where the company is retrofitting an entire floor to house a large staff. “We like the fact that in Alaska there was a lot of opportunity, despite the oil majors being up here a long time. There’s been some significant oil fields discovered, but also, relative to other parts of the world, the drilling density in Alaska is not significant.” “Once we commit to the development fully, hopefully in the second half of next year, that would provide significant impetus for employment opportunities for people in the state. Clearly one of the most important things when a company looks at an area is stability of fiscal terms because you spend a lot of money on projects and a lot of time and there are a lot of opportunities around the world.”
Unpredicted drop in crude inventories. Crude rose to its highest level since 2014 in New York as the drop in U.S. inventories reported by an industry group helped to sustain a rally spurred by geopolitical risks. Futures in New York rose as much as 2 percent, extending their gain beyond last week’s three-year high. U.S. crude and gasoline inventories fell last week, the American Petroleum Institute was said to report on Tuesday, in contrast to forecasts for a build in U.S. government data later. OPEC and Russia will probably look at ways to prolong their cooperation on cuts when they meet in Saudi Arabia this week. Oil had fallen earlier this week from the highest in more than three years as geopolitical risks surrounding Syria eased, with Russian President Vladimir Putin now seeking to reduce tensions with the U.S., according to people familiar. The U.S. has started talking to North Korea directly, President Donald Trump said on Tuesday, helping to buoy some equity markets. “The product draws were a bit surprising,” Tamas Varga, analyst at PVM Oil Associates, said, referring to the drop in gasoline and distillate inventories reported by the API. “As long as the geopolitical premium is here with us we should not sell off.”
The charity state of Alaska. The Alaska Legislature is already cutting into the amount of the yearly oil-wealth fund check given to residents to help pay for state government. Now, lawmakers are looking at other ways for residents to spend more of their check — to help pay for state government. One proposal would set up a raffle to benefit schools, with a minimum buy-in of $100 from a resident’s Alaska Permanent Fund dividend. Twenty-five percent of entry dollars would go toward the prize fund. Another bill, which passed the Senate, would let residents donate all or part of their Alaska Permanent Fund dividend to the state treasury to help pay Alaska’s bills. All this comes as lawmakers, deadlocked on taxes, look for alternatives to bolster state coffers in response to a persistent state budget deficit. It also comes amid a roiling political debate over the future of the dividend. Alaska has no state sales or personal income tax. The size of the yearly check paid to residents has been capped at $1,022 and $1,100 the past two years, and lawmakers propose limiting it again this year as they prepare to use earnings from the oil-wealth fund for the first time to help fill the deficit.
From today’s Washington Examiner, Daily on Energy:
ZINKE WON’T REDUCE AMOUNT COMPANIES PAY TO DRILL OFFSHORE: Interior Secretary Ryan Zinke on Tuesday declined to cut the amount that oil and gas companies pay for offshore drilling deep in federal waters. Zinke rejected the advice of the Interior Department’s Royalty Policy Committee, an advisory board that unanimously recommended that he lower the royalty rate companies pay on offshore drilling from 18.75 percent to 12.5 percent in federal waters deeper than 200 meters.
Low down: The proposed amount was the lowest rate the government can charge for offshore leases. Zinke said lowering the rate is not necessary to attract industry interest in drilling deep offshore.
Papua New Guinea oil company moves to develop big Alaska prospect
Anchorage Daily News, Alex DeMarban, April 17, 2018
Crude rises to highest since 2014
Chron, Alex Longley, April 18, 2018
Alaska looks at ways for residents to give to government
Daily News-Miner, Becky Bohrer, April 17, 2018