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Alaska tax change reduces burden on North Slope producers


Alaska tax change reduces burden on North Slope producers

Report summary

Alaskan Governor Sean Parnell signed Senate Bill (SB 21) in an effort to incentivise investment and stem the state's 25-year decline in oil production. The law, which eliminates the current system's (ACES) progressivity mechanism and amends how tax credits are awarded, will become effective on 1 January 2014.

What's included?

This report includes 2 file(s)

  • Alaska tax change reduces burden on North Slope producers PDF - 507.69 KB 7 Pages, 1 Tables, 4 Figures
  • Alaska tax change reduces burden on North Slope producers May 2013.xls XLS - 141.00 KB

Description

This Upstream Oil and Gas Insight report highlights the key issues surrounding this topic, and draws out the key implications for those involved.

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  • Why the change?
    • State government relies on oil tax revenues
    • Alaskan production and activity trending downward
  • Senate Bill 21 reduces tax burden
    • ACES's harsher elements overhauled
      • Progressivity mitigated, but not eliminated
      • GRE is attractive, but open to interpretation
      • Credits for losses increased
      • Some items on industry's wish list excluded
    • All fields' economics improve
      • SB 21 can become a tax increase under certain scenarios
    • Improves on ACES, but still more onerous than in the past
      • Federal government benefits
      • Uncertainty remains
        • Repeal is real possibility
        • Will SB 21 achieve its goal?
      • Appendix – economic assumptions

In this report there are 5 tables or charts, including:

  • Why the change?
  • Senate Bill 21 reduces tax burden
    • Summary of SB 21's changes
    • Value of hypothetical 50-million-barrel satellite field under various tax treatments and price scenarios
    • SB 21's impact on valuation of each North Slope field
    • Timeline of Alaskan oil tax legislation and impact on governments' share
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