Misery loves company. Following the release of BP, ConocoPhillips and Exxon Mobil’s earnings reports, it’s obvious “you don’t need a business degree to know it’s a rough time to be an oil company.” “While we operated well this quarter, low commodity prices continued to impact financial results,” ConocoPhillips Chief Financial Officer Don Wallette Jr. said during the company’s third-quarter earnings call last week. “The environment remained volatile over the quarter and continued to impact quarterly earnings across the sector,” BP Chief Financial Officer Brian Gilvary said on Tuesday. The third major oil company in Alaska, Exxon, told a similar story. Its earnings were down 38 percent compared to the third quarter of last year. Unfortunately for any future modeling of the situation, forecasters like the U.S. Energy Information Administration don’t expect oil prices to bounce back to 2014 levels anytime soon.
Banana peels and billions of barrels. Forbes recently featured Caelus CEO Jim Musselman and discussed his company’s recent find in Smith Bay. On his 2-billion-barrel discovery, “That [strike is] just the start,” says Musselman, “There’s so much oil yet to be found.” The feature also highlights the difficult regulatory and fiscal environment Alaskan producers continue to face – specifically, grievances with Governor Walker. “What the governor has done is the opposite of what Alaska needs,” says Dave Harbour, former chairman of the state regulatory commission. “Why would anyone invest in a state that has one foot over the edge of a precipice and the other standing on a banana peel? What we need to show investors is that in Alaska a deal is a deal.” Headlamp applauds Mr. Harbour for clearly stating the issue – and Mr. Musselman for pointing out that more oil can help the state solve its fiscal problems – long term.
“We can help the state of Alaska solve its fiscal problem for the next three or four generations, if they’ll let us.” Musselman says to Walker: “Don’t spook the money. If you spook the money, they stay spooked.”
The Alaska Dispatch News asked Alaska’s five candidates for Senate a series of questions ahead of next week’s election. We were pleased to see a question addressing the driving industries of Alaska’s economy and that each candidate answered oil and gas as an industry that will continue to lead Alaska for years to come.
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Alaska’s top oil companies adjusting to low prices
Alaska Public Radio News, Elizabeth Harball, November 2, 2016
Alaska And Oil: A Lesson In Biting The Hand That Feeds You
Forbes, Christopher Helmen, November 2, 2016
Five questions for Alaska’s U.S. Senate candidates
Alaska Dispatch News, Erica Martinson, November 2, 2016
Seaton: Alaska faces dilemma
Homer News, Rep. Paul Seaton, November 2, 2016