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Follow on Google News | Alaska Upstream Fiscal and Regulatory ReportThis report provides information relating to the terms which govern investment into Alaska’s upstream oil and gas sector
By: GlobalData According to the company’s latest report*, Alaska has made several changes to the fiscal terms governing its upstream oil and gas operations in the past decade, mostly through amendments to the production tax and the introduction of a vast range of tax credits, resulting in a relatively unstable regime over this period. Alaska’s new production tax, as laid out in Senate Bill 21 (SB 21), seeks to reduce the tax burden on larger oil and gas operations in the hope that this will promote exploration and development activity in the region, thereby boosting its economic growth and employment. However, opposition to the tax change comes from those who believe it will significantly affect state finances, by reducing the tax take, and low-margin oil and gas producers in the state for whom the tax burden will increase. Evan Turner, GlobalData’s Lead Analyst covering Upstream Oil & Gas, says: “With almost nine months to go until the referendum is held, there is a high degree of uncertainty around the likely outcome of the vote. Currently, polls suggest that the vote will be close, with no clear majority yet formed on either side of the argument. For Sample Pages, please click or add the below link to your browser: http://store.globaldata.com/ “However, given that it is the larger producers who are likely to gain from the tax change, it is expected that the ‘no’ campaign may benefit from considerable financial support, so that it can promote a message of economic and employment gains. For instance, BP Alaska has announced that due to the tax changes, it plans to add $1 billion of investment for the next five years.” Global Data expects this referendum to be the key determinant of the medium-term outlook for Alaska’s upstream oil and gas fiscal regime. Turner says: “If SB 21 is repealed, the tax will revert back to Alaska’s Clear and Equitable Share (ACES) system, with rates varying from 25-75%. If not, the new flat rate of 35% will mean an improvement in the investment climate for large oil and gas operations and the possible deterioration for smaller operators. “Incentivizing larger operators in the state to increase investment and the drilling of wells should result in increased production to mitigate North Slope declines,” concludes the analyst. This report provides information relating to the terms which govern investment into Alaska’s upstream oil and gas sector. It sets out in detail the fiscal regime and license terms under which firms must operate in the industry, clearly defining factors affecting profitability and quantifying the state’s take from hydrocarbon production. This report was built using data and information sourced from proprietary databases, primary and secondary research, and in-house analysis conducted by GlobalData’s team of industry experts. ABOUT GLOBALDATA Global Data is the premier source of actionable insight into the energy and healthcare industries. With the combined expertise of more than 1,000 researchers, market analysts and consultants, we provide high-quality, accurate and transparent industry insight that helps our clients to achieve growth and increase business value. For further details, please click or add the below link to your browser: http://store.globaldata.com/ Visit our report store: http://www.globaldata.com/ For more details contact:pressreleases@ North America: +1 646 395 5477 Europe: +44 207 753 4299 +44 1204 543 533 Asia Pacific: +91 40 6616 678 End
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