ConocoPhillips, Alaska's largest oil and gas producer, will indefinitely stop drilling on the North Slope if Ballot Measure 1—namely the North Slope oil production tax increase initiative—passes next week, the company said.
Passage of Ballot Measure 1 would mean that drilling in Alaska’s big three North Slope fields (Alpine Prudhoe, and Kuparuk)—the targets of the tax increase—would not resume in 2021 and possibly beyond, Chief Operating Officer Matthew Fox said during the company's third quarter earnings conference call.
The three fields generated 218,000 boe/d in 2019, or about 25% of Conoco's worldwide crude production.
“That's going to be two problems, two adverse effects. It's going to reduce the competitiveness of investment in Alaska, and it's going to increase uncertainty and instability,” Fox said.
“We've got years of development opportunities left in Alaska, but a shift of capital from Alaska to elsewhere is going to be rational if taxes increase. I mean, this is a production tax and what your tax more, you get less of. So that should be expected if those advocating for this and voting for the proposal should understand that,” he added.
Ballot Measure 1 would change the oil and gas production tax for areas of the North Slope where a company produced more than 40,000 b/d of oil in the prior year and more than 400 million bbl total.