Legislature(2003 - 2004)
2004-02-27 Senate Journal
Full Journal pdf2004-02-27 Senate Journal Page 2306 SB 348 The following letter dated February 26 was read, stating: Dear President Therriault: In accordance with AS 38.06.050(a) and AS 38.06.070, I am transmitting a copy of the Alaska Royalty Oil and Gas Development Advisory Board's resolution unanimously approving a royalty oil contract between the state and Flint Hills Resources Alaska, LLC, for the sale of Alaska North Slope royalty oil. Legislative approval for the contract is required by AS 38.06.055. Also enclosed for reference is the Best Interest Finding of the Commissioner of the Department of Natural Resources (DNR) dated February 12, 2004, and the signed contract. DNR worked hard to secure favorable terms to the state and complete negotiations of the contract. That hard work will now pay dividends to all Alaskans. Under the contract, the state will supply 24,000 to 77,000 barrels of North Slope royalty oil to Flint Hills Resources Alaska, LLC. The department forecasts that state royalty revenues under the contract will be approximately $0.30 per barrel higher than if the royalty were taken in value from the North Slope producers. This will result in increased revenues from $2.6 million to $8.4 million per year. 2004-02-27 Senate Journal Page 2307 The contract uses Alaska North Slope spot prices to determine the royalty in-kind price. This along with a fixed transportation price eliminates the need for retroactive adjustments - which removes the risk of the state losing value in royalty re-openers. I urge your prompt consideration and approval of the contract. Sincerely yours, /s/ Frank H. Murkowski Governor