The additional information that the state needs to make sound decisions about oil industry economics in Alaska falls into three main categories, according to attorneys Robin Brena and Craig Richards, who gave a list to the Senate Resources Committee this week.


Until the state acquires the data companies use for internal decisions, the plans they present to regulators, and the analysis they offer to potential purchasers to place a value on North Slope assets, the state will continue to play a guessing game, which increases the chances of guessing wrong.



Brena and Richards, who worked on the recent pipeline valuation case, said it would make no sense for the state to create incentives for companies to do things they are already planning to do. Likewise, it does make sense for the state to offer incentives for investments that would not take place without offering incentives.

Without being able to get a look at such items as field development and budget plans, the state has no way of knowing which is which. The logical question that arises out of this for state leaders is why don't they already know what the development plans are for the North Slope?

If increasing production is a sensible goal, and it is, then the state needs to end the information blackout.

It may be that a lot of the details the lawyers describe should not be made available to the general public, but should be reviewed in confidence by state officials who need a higher level of knowledge to make sound decisions. 

There are many precedents in court cases and administrative proceedings. 
With the degree of complexity in the  oil tax laws, consider this a way to move past advertising mantras and closer to the truth.



Here is the list from Brena and Richards:



Information Used for Internal Decisions: The complete version of the last three field development plans, for each field, provided to the working interest owners. The resource support package for each field.


All authorization for expenditures, “AFE”, or proposed AFEs that are for amounts over $25 million and that were drafted in the last three years.
All annual and quarterly strategic and budget reporting documents (e.g., strategic planning unit and group financial outlooks), for the last two years, for each producer’s Alaska operations.


All financial analysis and internal planning documents relating to heavy or viscous oil drafted in the last two years, including each producer’s long term budget plan and production forecast for heavy oil and viscous oil development.


A list of all projects made uneconomic by ACES, including the financial analysis supporting that conclusion.


Information Developed for Regulatory Purposes: Everything provided to the BP Prudhoe Bay Royalty Trust or its auditors for yearend 2010 and 2011.  The last two yearend review packages for each field.


Information Provided to Potential Purchasers: In 2010, after the Gulf well blowout, BP considered selling its Alaska assets. BP set up electronic data rooms containing the documents about its Alaska operations that were necessary for potential purchasers to conduct their due diligence reviews. It would require little effort for BP to allow the Legislature access to those data rooms.