Announcement from Janet L Weiss, President, BP Alaska Exploration, Inc.  

Janet L. Weiss. Northern Gas Pipelines file photo by Dave Harbour.

Last week, BP issued its 2016 Annual Report and the required 20-F form submitted to the US Securities and Exchange Commission. Unfortunately, the 20-F form only tells part of our BP Alaska business story which has caused some confusion and a number of questions that I want to help address.  

Let me be very clear, the BP Alaska Region did lose money (negative cash flow) in 2016 to the tune of about $1 million a day (a loss of $358 million for the year). And, the entire Region had a net income loss of $184 million. How can this be when the BP Annual Report 20-F says that BPXA made $85 million net income and paid $464 million in taxes and royalties to the State of Alaska?

There are several important facts to note: 

  • The BP Alaska Region is made up of a number of separate businesses. For accounting purposes each of these businesses reports separately into the BP Group. As many business owners know, we must take into account every aspect of our business.  
  • BPXA (the entity reported in the 20-F form) only represents one piece of our Alaska business. It does not take into account the cost of operating both our pipeline business (TAPS) and our marine shipping business. The BPXA business is specifically broken out as a requirement of the Prudhoe Bay Royalty Trust which is traded on the New York Stock Exchange.
  • The 20-F is an income statement and does not reflect cash flow. It is based on what our finance folks call “accrual accounting” which does not include ~$600 million of capital we invested in our Alaska business in 2016.

Looking at only one piece of our business is like a restaurant only considering the cost of the food it buys and not taking into account the equipment needed in the kitchen, transportation costs to get the food to your restaurant or the marketing needed to attract patrons.

It’s important to note that even in this low price environment, BP invested $1.8 billion in  Alaska ($1.2 billion operating expense, and $600 million capital) in 2016. As a community leader, I wanted to provide you with the complete story directly from me.



PLF Has Robust Successes On Behalf Of Natural Resource Community: Engages New Experienced Trustees

Northrim: Resilient in recession, state must ‘get our act together’
For a state officially in recession, the traditional economic indicators of Alaska’s economy are showing a remarkable resiliency…

New stipulations, shorter time period, for Pebble’s state land use permit
After months of delay, the Pebble Limited Partnership was granted its land use permit by the state’s Department of Natural Resources Tuesday.

Tom Case. Northern Gas Pipelines file photo by Dave Harbour

UAA Chancellor Tom Case announces retirement
The University of Alaska Anchorage chancellor has announced his retirement.

Governor says Alaska LNG is on world leaders’ radars as he pursues partners
Gov. Bill Walker continues to court world leaders to win their support for Alaska’s giant gas-export project…

Oil companies owe $194M in 2010 tax and interest, state says
Oil and gas companies in Alaska owe the state $194 million in unpaid taxes and interest from 2010…

Former U.S. Senator & Governor Frank Murkowski Details New State Endeavor
Your Alaska Link had the opportunity to sit down with Alaska’s former U.S. Senator and Governor Frank Murkowski…