ConocoPhillips Supportive of Alaskan Pipeline Contract

The State of Alaska released the draft Alaska Gas Pipeline Project fiscal contract between the State and the North Slope producers. ConocoPhillips is supportive of starting the public review process. The company looks forward to providing input to the Alaska State Legislature regarding the need for a fiscal contract supportive of project development and a tax system that balances the needs of the State while encouraging investment.

The fiscal agreement will provide the essential elements for clarity and fiscal certainty necessary to advance the Alaska Gas Pipeline project. The terms of the agreement include state fiscal certainty, as well as the six principles mandated by the State of Alaska for the project. The fiscal contract outlines activities and plans between ConocoPhillips, the other major producers and the State of Alaska for equity ownership, state revenue, Alaska hire, access to gas for in-state use, access for explorers, and future expansion.

"This is an important step toward increased energy security for America. ConocoPhillips, the other project sponsors and the State of Alaska are working as partners on the largest pipeline project in North America," said Jim Mulva, ConocoPhillips chairman and chief executive officer. "The pipeline will provide a long-term source of clean, secure energy to American consumers. We look forward to working with all Alaskans to further develop Alaska's substantial gas resources."

Upon completion, it is anticipated that this project will produce approximately four billion cubic feet of gas per day from Prudhoe Bay, Point Thomson and other western North Slope fields. In addition to supplying a stable, reliable source of clean-burning fuel for America, Alaska North Slope gas development will provide jobs, economic and industrial benefits, and government revenues.

The U.S. federal government, Canadian government, the State of Alaska, and local communities all stand to realize significant long-term benefits including increased investment, job creation and tax revenues as a result of the Alaska Gas Pipeline project.

Following the required public review process, the fiscal contract must be reviewed by the State legislature. Upon legislative authorization of the contract and clarity regarding the stability of Alaska's future production tax system, the producers will begin project planning, which is the next phase in the project's development.