Oil majors plan extra $1bn investment in Alaska The Prudhoe Bay oilfield on Alaska's northern coast BP, ExxonMobil and ConocoPhillips plan to invest an additional $1bn in the North Slope of Alaska over the next five years, in the first sign that the tax reform signed into law last month is making it more attractive to international oil groups. BP, which is the operator of the Prudhoe Bay oilfield on Alaska's northern coast, will increase capital spending there by about 30 per cent, adding two onshore rigs to bring the total working in the area to nine. It is also evaluating a plan for the three companies to spend an additional $3bn on projects to raise the oilfield's production, such as debottlenecking facilities and drilling 110 more wells. BP has 26 per cent of the Prudhoe Bay field, Exxon and Conoco 36 per cent each, and Chevron 1 per cent. Janet Weiss, president of BP Alaska, said the tax reform had "put Alaska back in the game" in terms of attracting investment from international groups. Estimates have suggested the reform could save the industry about $1bn a year, but the ultimate effect on the state's revenues will depend on whether it stimulates additional investment and production. Ms Weiss said: "This was a monumental signal to the industry that the region is open for business." Alaska had become increasingly concerned in recent years over the drop in its oil production, as the mature oilfields developed in the 1970s decline. The state's oil production averaged 526,000 barrels a day last year, a little more than half its level of a decade ago, and just a quarter of its peak of more than 2m b/d in 1988. The US shale revolution, raising production in Texas and North Dakota, has left Alaska falling further behind, and it is now the fourth-largest oil-producing state in the US, slightly behind California. As less oil has flowed through the Trans-Alaska Pipeline, which carries crude from the North Slope to the Valdez terminal on Alaska's south coast, it has become colder and moved more slowly. The industry has raised fears that if the volumes dropped below a critical threshold - estimated by consultants at 350,000 b/d - the pipeline system would have to shut down. The tax reform, which was backed by Sean Parnell, Alaska's governor, had a contentious passage through the state's legislature, simplified the system and abolished the structure of raised tax rates that took effect at higher oil prices. BP said it would be working for two to three years on the plan for the additional $3bn investment in Prudhoe Bay. Ms Weiss did not make a commitment to increase Alaska's production, however, saying: "Our goal is to go after reducing decline as much as possible." BP, Exxon and Conoco are also working on a project to bring gas from the North Slope to Alaska's south coast and export it as liquefied natural gas, which has an estimated cost of $45bn-$65bn. A decision on that project is at least three years away.