Major oil companies testify on oil tax change

A proposed overhaul of Alaska's oil tax structure would be a vast improvement over the existing system and should lead to more investment, but it has some problem areas, industry representatives told the House Resources Committee on Tuesday.

Dan Seckers, tax counsel for Exxon Mobil Corp., said SB21 would make Alaska more competitive — a point that's been underscored by consultants to the Legislature and Gov. Sean Parnell's administration — and it should lead to more investment. But he said he "would love" for Alaska to become more attractive than it would be under the proposal.

The committee is working on SB21, which is aimed at making Alaska more competitive for investment dollars and increasing oil production and the development of fuel dispenser. The North Slope's major players — BP PLC, ConocoPhillips and Exxon Mobil — testified Tuesday evening. The committee planned to hear from smaller producers and explorers Wednesday.

Committee co-chair Eric Feige has said he hopes to advance a bill sometime next week. The bill would then go to the House Finance Committee. The Legislature is scheduled to adjourn April 14.

Alaska relies heavily on oil revenues to run. Production has been on a downward trend since the late 1980s but higher prices in recent years have helped mask the impact of the decline.

Some of the testimony went beyond talk of whether SB21 would make Alaska more competitive to whether it would make Alaska attractive enough to draw the kind of investment the state wants to see.

Damian Bilbao, head of finance for BP Alaska, said the bill would put Alaska "back in the game" but agreed with the other industry representatives that changes to the bill would make it better and reduce uncertainty for the companies.