ConocoPhillips boosts Alaska output by 20% in 1Q

ConocoPhillips continued its run of strong returns to start 2019 with its third consecutive quarterly profit of $1.8 billion as its Alaska oil production increased nearly 20 percent. The Houston-based explorer and producer netted $384 million in the first quarter from its North Slope operations compared to $445 million in 2018, according to its earnings report released April 30. In turn, ConocoPhillips paid $249 million in taxes and royalties to the State of Alaska, according to spokeswoman Natalie Lowman. The $1.8 billion first quarter profit companywide was a drastic improvement over the $888 million ConocoPhillips earned in the first quarter of 2018. The recent profit translates to $1.60 per share and came on the back of $10 billion in revenue. ConocoPhillips generated $1.3 billion in free cash flow and with that repurchased roughly $800 million worth of stock shares and paid another $300 million in dividends, according to a company release. It ended the quarter holding $6.5 billion in cash. Venezuela was also ordered to pay ConocoPhillips $8.7 billion via a ruling issued during the quarter from the International Centre of Investment Disputes for its previous expropriation of the company’s assets in the country. CEO Ryan Lance said in a formal statement that the company’s efforts to better insulate itself from volatile oil and gas markets are paying off. ConocoPhillips leaders Alaska have said they set a “breakeven” goal of $40 per barrel for their operations in the state after the 2014-15 oil price decline, in large measure to compete with ever-cheaper to produce Lower 48 shale oil prospects. “We continue to execute and deliver on a plan that’s resilient to lower prices, while offering investors upside at higher prices. We approach the business with an aim to level-load our investment and distribution programs, rather than chase cycles up or down, because we believe that is the best way to create sustained value in the energy sector,” Lance said. “By focusing on free cash flow generation and distributing a significant portion of cash flows to shareholders, we offer the market a path to value creation in this cyclical business.” ConocoPhillips stock sold for $63.12 per share when markets closed April 30, up slightly from a pre-earnings report April 29 closing price of $62.65 per share. Specifically to Alaska, ConocoPhillips produced an average of 210,000 barrels of oil per day in the state, up significantly from an average of 174,000 barrels per day to start 2018, according to the report. The company operates the large Kuparuk River and Alpine oil fields on the North Slope and oil production at its Greater Moose’s Tooth-1 project — an Alpine satellite with peak production near 30,000 barrels per day — began last October. GMT-1 startup marked the first oil produced from federal leases within the massive National Petroleum Reserve-Alaska on the western Slope. ConocoPhillips Alaska oil and gas production accounted for 16 percent of the company’s worldwide production, while its earnings from the state accounted for 21 percent of its quarterly profit. Work is ongoing at its slightly larger GMT-2 project. The company is also in the midst of permitting its large Willow oil prospect, also in the NPR-A, which has been estimated as a roughly $5 billion undertaking to fully develop. ConocoPhillips spent $410 million on North Slope capital investments during the quarter — about 25 percent of its overall investment portfolio. Alaska investments have accounted for about 20 percent of the company’s capital budget in recent years. BP, which operates Prudhoe Bay, reported a $2.4 billion replacement cost quarterly profit April 30 and ExxonMobil also netted $2.4 billion to start 2019, according to an April 26 release. Elwood Brehmer can be reached at [email protected]

Multiple bills aim to expand telehealth services in Alaska

Medical providers may have more options for offering services digitally if the Legislature approves a set of bills targeted at expanding telehealth availability. Telehealth includes a variety of services delivered by the provider communicating digitally with a patient or transmitting data such as imaging scans. In a state like Alaska, where much of the population is spread thin and medical providers are concentrated in urban areas, telehealth has the potential to connect those who live in rural areas or without reliable or affordable transportation to regular medical care. When the Legislature reformed the Medicaid program in 2016, one provision required the state Medical Board to create regulations for physicians to diagnose, prescribe and administer prescriptions without conducting a physical examination on a patient. That allowed doctors to begin offering a broader array of services. In the intervening years, a number of telehealth services have popped up in the state and some insurers, including Premera Blue Cross Blue Shield, offer coverage for telehealth services for members in Alaska. A suite of bills in the Legislature would expand telehealth services further. House Bill 29, sponsored by Rep. Ivy Spohnholz, D-Anchorage, would allow providers to bill state-regulated insurers for health care services delivered by telehealth without an initial in-person appointment. HB 97 and its companion legislation Senate Bill 44 would allow physician assistants to deliver telehealth services under the same statutory regulation as physicians. None of the bills have received much opposition, and providers and insurers have come out in support. Telehealth is billed as a way to improve access to care and potentially decrease costs by delivering them more effectively and through preventative care visits. “We need to look at the overall cost of health,” said Division of Insurance Director Lori Wing-Heier in a House Labor and Commerce Committee hearing on April 24. “We need to look at ways to reduce the cost of health care while expanding access … This is an excellent way to do that.” Spohnholz told the House Labor and Commerce Committee that the bill allows for reimbursement to any provider who delivers services via telehealth, not just telehealth-specific companies. Teladoc, a New York-based telemedicine company, already offers services in Alaska and supports the bill. The company contracts with Premera and the AlaskaCare Employee Health Plan, which covers State of Alaska employees, among other health plans. Claudia Tucker, the vice president of government affairs for Teladoc, told the committee in an April 29 hearing that telemedicine services saved Alaskans $3.5 million in health care costs in 2018. One of the concerns committee members had is where the doctors who are answering the calls are located. Tucker said while the company has a preference in the state for doctors who live in Alaska, they aren’t always available. “About 30 percent of (Alaska-based) calls were answered by physicians who lived in Alaska,” she said. “All of them are answered by physicians licensed in Alaska.” Robin Minard, the chief communications officer for the Mat-Su Health Foundation, said two of the major barriers to care identified in the Mat-Su Regional Medical Center’s Community Health Needs Assessment are lack of access to care and transportation. Expanded telehealth options would help address both, she said. The Alaska Commission on Aging also noted this in a letter of support. Medicare does not currently allow for telehealth visits to be reimbursed, but an expanded program from the Centers for Medicare and Medicaid Services called Medicare Advantage would allow telehealth services delivered in a recipient’s home to be reimbursable, commission chair Gordon Glaser and executive director Denise Daniello wrote in the letter. “Medicare Advantage is not yet available in Alaska, however, there has been growing interest in exploring managed care plans as a means to control costs in our State,” they wrote. “The Commission on Aging will be following these developments.” HB 97, sponsored by Rep. Jonathan Kreiss-Tomkins, D-Sitka, and SB 44, sponsored by Senate President Cathy Giessel, R-Anchorage, both seek to include physician assistants in the regulations on telehealth delivery. The intent of the original revision to Medicaid was to include them, but the state Medical Board wanted specific mention of physician assistants, according to a letter to Giessel from board President Catherine Hyndman. Most of Interior Alaska is considered a medically underserved area with a health professional shortage, according to the Health Resources and Services Administration. Physician assistants are allowed to prescribe schedule 2 to 5 substances and be supervised by a doctor in order to practice medicine. The House Labor and Commerce Committee passed HB 29 out of committee but was waiting for amendments on HB 97, which were due May 2. The Senate Finance Committee passed SB 44 out of committee on April 15. ^ Elizabeth Earl can be reached at [email protected]

UAF Blue Economy Center designed to develop marine resources

The University of Alaska Fairbanks recently established the Alaska Blue Economy Center to help advance new research, education and economic opportunities for Alaska. “I am thrilled to have this new center approved by UAF Chancellor White. This represents an opportunity to help spur innovation and technology development in Alaska’s burgeoning blue economy,” said UAF College of Fisheries and Ocean Sciences Dean Bradley Moran. “The launch of ABEC comes at a critical time as the state seeks to diversify and grow its economy and workforce.” The term “blue economy” refers to the use of ocean resources for economic growth, including traditional sectors such as fisheries, coastal tourism and oil and gas exploration, as well as the rapidly growing areas of ocean technology development, renewable energy and marine biotechnology. With more than half of the nation’s coastline and roughly one-third of the country’s Exclusive Economic Zone, Alaska is well-positioned to be a leader in the blue economy. A central goal of ABEC is to help grow and diversify Alaska’s marine workforce. For example, the center will facilitate collaboration and innovation to address ocean economic challenges and opportunities. ABEC combines expertise in research, instruction and public engagement related to Alaska’s aquatic resources and ecosystems. “Alaska has the opportunity to add tremendous value to our fisheries resources, bringing needed dollars and jobs into Alaska,” said UAF Chancellor Dan White. In addition to supporting Alaska’s existing sectors, the center seeks to find sustainable options for growth that preserve and protect Alaska’s thriving marine resources. Researchers at the UAF College of Fisheries and Ocean Sciences, or CFOS, are already actively engaged in projects and activities that benefit Alaska’s fishery and aquaculture industries around the state. One current project investigates the reproductive rates of seaweed in Southcentral Alaska to help determine whether changes in regulations could make it easier to sustainably harvest seaweed near Homer. Another looks at the causes and consequences of whale predation on hatchery-released salmon in Chatham Strait near Sitka. Researchers at the Kodiak Seafood and Marine Science Center are developing a technique and recipe to process fish skins from seafood processors into dog treats, a unique and innovative way to eliminate seafood waste. These projects highlight the role of research in developing sustainable ocean industries to benefit the state of Alaska. UAF also supports Alaska’s blue economy in ways outside of its traditional research programs. One such avenue is through training the next generation of blue economy leaders. In 2018, UAF established the nation’s only online Blue MBA degree to provide leaders with the tools to work at the intersection of business and aquatic resources. The program, designed for students with a background in science, technology, engineering and mathematics, will give students the knowledge and skills needed to develop business models to ensure the sustainable use of marine and freshwater resources. ABEC will serve as the umbrella organization for these research and teaching activities, relying on strong collaborations with research and agency partners at UAF and around the state. “We look forward to partnering with CFOS to ensure that our blue economies and industries have the necessary ocean observations, data and information products they need to make wise decisions about the sustainable use of our ocean and coastal resources,” said Molly McCammon, director of the Alaska Ocean Observing System. CFOS has also partnered with the Bering Sea Fisheries Association and the Alaska Ocean Cluster to implement a new Blue Pipeline Incubator, a think tank geared at promoting ocean-related businesses that support the resiliency of coastal economies around the state. Based at the CFOS Seward Marine Center, the new program will seek out innovative leaders and businesses aiming to increase revenues, expand their workforce and mentor new programs around the state. In 2017, the CFOS Kodiak Seafood and Marine Science Center received a half-million-dollar federal grant to partner with Blue Evolution — a private company that cultivates and markets seaweed products — to improve methods of growing, harvesting and transporting farmed sugar kelp, a common edible seaweed. Seaweed farming is a multibillion-dollar industry worldwide that presents a new economic opportunity for coastal Alaska. ABEC aims to be on the frontlines in providing research and workforce opportunities to catalyze Alaska’s participation in this burgeoning industry. ABEC will help unify organizations that already advocate for sustainable use of marine resources, such as Alaska Sea Grant and the UAF Alaska Center for Energy and Power. “The very essence of the blue economy is to promote sustainable use of ocean resources for economic growth, jobs and ecosystem health, and this is a mirror of Sea Grant’s mission,” said Alaska Sea Grant Director Heather Brandon. “Essentially all the work of Alaska Sea Grant supports and grows the blue economy. The new center will amplify Alaska Sea Grant’s impact, and vice versa.” Gwen Holdmann, director of ACEP, said, “Access to affordable and reliable energy sources to support the blue economy, and tapping into the vast potential Alaska has in tidal and current energy as one possible growth area, is something the Alaska Center for Energy and Power is very interested in supporting.” These projects and programs represent UAF’s commitment to grow Alaska’s blue economy, spur innovation and sustain the marine and inland aquatic resources that Alaskans depend on. With the new Alaska Blue Economy Center, we will be better equipped to capitalize on Alaska’s coastal energy and environmental resources.

Pages

Subscribe to Alaska Journal RSS