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Kudos to Conoco; let trickle begin

Posted: July 24, 2014 - 10:06am

 

In a day and age of corporate men, I am Conocoman.

I confess, even with leftist leanings and environmental sensibilities, I own Conoco stock. A friend that works on the Slope says my car leaks more oil than Conoco’s Alaska operations. So I’m proud to be part of a company who takes corporate responsibility to heart and to their bottom line.

But let’s focus on that bottom line. ConocoPhillips profits under ACES in Alaska were:

2009:  $1.5 billion

2011:  $2.0 billion

2012:  $2.3 billion

2013:  $2.3 billion       

These are record profits, tying pre-recession levels of 2007-8.

Conoco and BP are averaging net profits of $26-28 a barrel for North Slope oil — twice the profit for production costs in Canada, three times as profitable as fields in the lower 48. Alaska oil is more profitable for Conoco than the lower 48 fields, Europe, Asia or Middle East fields.

Iraqi oil brings BP $2 a barrel profit (in line with BP’s worldwide portfolio). If the present oil tax is so damaging why are bids on drilling tracts up under ACES? Why have more wells been drilled and developed since ACES became the formula for oil tax than before? And why is BP drilling in Venezuela where the tax rate is 90 percent — highest in the world?

Reading the annual reports, Conoco (and BP) are maximizing their profit — what they are required to do. As a shareholder I applaud them taking the opportunity. They have an Exxon Valdez lawyer in the governor’s office, they have two employees in the Alaska Senate (that passed the oil tax giveaway by one vote). Production of the aging fields feeding the Alaska pipeline continues to decline at 6 percent a year, so blame it on ACES, call your political chips in and get taxes cut on Alaska operations (that are bringing in seven times the return BP is getting on its investments worldwide).

BP brags that the $2 billion dollars in tax breaks will create 200 new North Slope jobs — enough for the state to put 20,000 Alaskans to work at $100,000 a year. 

As a shareholder I applaud multinational corporations that flex their muscles when they have their hands wrapped around the windpipe of a state that gets 90 percent of its budget from oil taxes and have their men in control of the levers of the political machine.

As an Alaskan, who owns the oil that “sells” it cheaper than any other oil-rich location in the world, my corporate sensibilities are, if you want to give it away and then go begging for a job, you deserve to be screwed.

 As right as I was about Buccaneer going broke, I’m right about BP not, even a stockholder should say pay your fair share.

 

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