Arctic Slope reports $208 million in profits

Posted: Thursday, June 19, 2008

ANCHORAGE - Arctic Slope Regional Corp. generated $1.77 billion in revenue last year and a profit of $208 million, according to its annual report.

Arctic Slope's biggest source of revenue was its subsidiary Petro Star Inc.

The refiner and distributor of light fuels generated about $655 million in revenue.

Arctic Slope's biggest profit-maker was the Alpine oil field, run by Conoco Phillips on land owned by Arctic Slope, a village corporation and the state.

Revenue from Alpine and other Native-owned resources provided $56.8 million in pretax profits for Arctic Slope, not including profit-sharing payments that Arctic Slope made to other Native corporations.

Federal law requires regional Native corporations to share 70 percent of their profits from certain resource development among all Native companies.

Largely due to Alpine and rising oil prices, Arctic Slope's pretax profit from natural resources increased by 4.5 percent last year.

That was a smaller gain than in 2006, when the company's natural resource earnings shot up 146 percent. Arctic Slope that year received additional one-time payments, according to the annual report.

Some Arctic Slope subsidiaries, including an oil field services company, ASRC Energy Services, had declining revenue in 2007. Expired contracts were part of the reason.

High oil prices in some respects harm Arctic Slope, said Tara Sweeney, vice president of external affairs. High prices boost Arctic Slope's Alpine royalties but hurt its refinery business and other operations.

"The price of oil can also be a negative factor, or additional burden, on our operations with our contracts, refinery margins and the overall cost of doing business, especially in Alaska," she said. "Every project bid is affected by the rising cost of oil, so we have to take a disciplined approach to managing the benefits with the burdens."

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