A research statement on the Pikka oil field, Alaska's SB21 production tax structure, and the foreign ownership of Alaska's North Slope resources. Published May 17, 2026.

What We Know — And What the Data Confirms

Over the past several weeks, we have been examining the financial structure of the Pikka oil field on Alaska's North Slope — who owns it, what was invested, what Alaska receives, and what the companies take home. What follows is a statement of what the confirmed data shows, and an honest disclosure of where further research is still needed before we publish specific figures.

Every claim in this statement is sourced to primary documents: Santos Ltd. financial filings, Alaska Department of Revenue analyses, state statutes, and confirmed public records.

The Core Facts

The Pikka oil field is owned entirely by two foreign companies. Santos Ltd., headquartered in Adelaide, Australia, operates the field with a 51% working interest. Repsol S.A., headquartered in Madrid, Spain, holds the remaining 49%. No Alaska company, no US major, and no American independent holds any ownership stake in what is described as the largest onshore conventional oil discovery in the United States in thirty years.

The confirmed investment to bring Pikka to first oil is at least $3.65 billion. This includes $400 million paid by Oil Search (now Santos) in February 2018 to acquire initial stakes from Armstrong Energy and GMT Exploration, $450 million paid in June 2019 to exercise an option for the remaining Armstrong and GMT interests, and approximately $2.8 billion in Phase 1 construction capital — the original $2.6 billion FID commitment revised upward by approximately $200 million Santos-share due to tariff-driven cost increases on steel and production modules, labor inflation, and logistics costs along the Mackenzie River transit.

At the state of Alaska's own long-term oil price forecast of $65 per barrel, Santos and Repsol recover that entire investment in approximately three years. At the elevated prices driven by the current Middle East conflict — ANS averaged $111 per barrel in April 2026 — payback compresses to under two years. After payback, the companies collect essentially pure profit for the remaining 27 years of the field's projected 30-year life.

Alaska receives zero production tax from Pikka until fiscal year 2034 — eight years after first oil. This is confirmed directly by the Alaska Department of Revenue's own fiscal analysis of the project. It is not a projection by critics. It is the state's own number. The mechanism is Alaska's SB21 oil tax structure, which allows Santos to stack three separate tax elimination tools simultaneously: a Gross Value Reduction that excludes 20-30% of gross wellhead revenue from the tax calculation, a $5 per-barrel credit that can reduce tax liability below even the 4% minimum tax floor — to zero — during the first seven years of GVR-eligible production, and carried-forward annual loss credits equal to 35% of all pre-production development costs that continue drawing down any production tax liability until approximately FY2039-2040.

There is no make-up provision. The production taxes Alaska does not collect during the first eight years of Pikka's production — its peak production years, when the field will be generating its highest volumes at the highest price environment — are gone permanently. The state's own Department of Revenue projects that by the time full production taxes begin in FY2034, roughly 75% of projected Pikka volumes will already have been produced.

If Santos proceeds with Pikka Phase 2 — which it is already planning — SB21 allows the tax credits generated by Phase 2 to be applied against Phase 1 production. Under that scenario, the DOR's own analysis suggests full production taxes may not be realized until well beyond FY2040, and may never be fully realized during the life of the field.

What Alaska does receive is royalties. The state's royalty rate is 12.5% of wellhead value — the gross price minus approximately $10.50 per barrel in Trans-Alaska Pipeline System transportation costs. At $65 per barrel, that produces approximately $201 million per year in total royalty revenue from Pikka. The DOR's own analysis projects approximately $200 million per year in state revenues from Pikka in its first year, growing to approximately $300 million by 2034, almost entirely from royalties rather than production taxes. Over the full 30-year life of Phase 1, the state projects approximately $4.6 billion in total net cash flow.

Meanwhile Santos and Repsol retain the overwhelming majority of gross revenue. At $65 per barrel over 30 years at 80,000 barrels per day, gross revenue from Pikka approaches $57 billion. Alaska's confirmed $4.6 billion lifetime take represents approximately eight cents on every dollar of gross revenue generated from the state's own constitutionally owned resources.

The same construction costs that generate Alaska's carried-forward loss credits also qualify for US federal tax deductions. Under Section 263 of the Internal Revenue Code, intangible drilling costs — labor, fuel, site preparation, chemicals, and other non-salvageable items that typically represent 65-80% of total drilling costs — are deductible against US federal taxable income. For integrated oil companies, 70% is deductible in the year incurred and 30% is amortized over 60 months. Both Santos and Repsol, as foreign corporations conducting a US trade or business, file Form 1120-F and pay US federal corporate tax at the 21% rate on effectively connected income — and claim these deductions against that income. The state of Alaska allows the same costs as the basis for credits that eliminate production tax. The federal government allows those same costs as deductions that reduce federal tax. The same dollar works twice — at both levels — simultaneously.

Alaska is running a $1.8 billion annual budget deficit while its largest new oil field generates zero production tax for eight years, its oil tax credits are being consumed by foreign companies at both the state and federal level, and its legislature debates whether to surrender over $1 billion in annual property tax revenue to attract a gasline builder that hasn't yet committed to the project.

Under Article 8, Section 2 of the Alaska Constitution, the standard for management of the state's natural resources is whether Alaskans are receiving the "maximum benefit" from their development. The confirmed data raises a legitimate and serious question about whether that standard is being met.

What We Are Still Researching

We are committed to accuracy. The following figures appeared in our earlier analysis but require additional primary source verification before we will publish them as established facts. We are actively pursuing that research.

Repsol's pre-2018 exploration investment. Repsol has been active in Alaska since 2011 and led 16 exploration and appraisal wells before the 2022 Final Investment Decision. We have estimated this expenditure at $300-400 million based on industry cost benchmarks, but have not located a primary Repsol financial disclosure confirming the specific figure. Until we do, total confirmed investment remains $3.65 billion, not the $4.1 billion figure cited in earlier drafts.

The precise federal IDC tax savings. We calculated an estimated $267-330 million in federal tax savings from IDC deductions applied to Phase 1 construction costs. This calculation is methodologically sound — applying confirmed IDC percentages and the 21% federal rate to confirmed construction costs — but it is an estimate based on typical industry ratios, not a figure disclosed in Santos or Repsol financial filings. We are seeking confirmation of the actual IDC percentage claimed.

Santos' Australian tax treatment of US profits. The US-Australia tax treaty eliminates branch profits tax on Santos' repatriation of US earnings, and Australia's foreign tax credit system would generally allow Santos to credit US taxes paid against Australian tax obligations. The practical effect is that Santos likely pays tax on Pikka profits once, at the US 21% rate, with minimal additional Australian tax. However, we have not reviewed Santos' Australian tax filings or obtained a definitive legal opinion on their specific structure. We will not characterize the Australian tax outcome as confirmed until we have done so.

Repsol's specific withholding rate on repatriated profits. The US-Spain tax treaty limits withholding on dividends to 5% for qualifying corporate shareholders. Repsol's 49% ownership interest in Pikka would normally qualify, but the specific structure of their US holding entity and whether it meets treaty qualification tests requires confirmation we do not yet have.

The total production tax foregone. We estimated Alaska is foregoing between $600 million and $1 billion in production tax from Pikka over the zero-tax period. This range is calculated from the confirmed 4% minimum tax floor applied to confirmed production and price assumptions. It is a reasonable estimate — and the DOR's own statewide data showing a 75% plunge in production tax revenues from $974 million to $218 million between FY2024 and FY2032 supports its general magnitude. But a Pikka-specific figure requires the DOR's full fiscal model, which we are requesting.

Our Commitment

The core narrative — that two foreign companies are recovering a $3.65 billion confirmed investment in approximately three years, collecting essentially pure profit for 27 more years, paying zero Alaska production tax for the first eight, while the state runs a $1.8 billion deficit — is fully supported by primary source documentation and we stand behind it entirely.

The additional figures under further research would, if confirmed, strengthen that narrative further. But we will not publish them as established facts until they are. We expect to have answers on each of the open items within the coming weeks and will update this analysis accordingly.

If you have access to primary source documents that confirm or contradict any of the figures under research, we welcome that information.

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Primary sources: Santos Ltd. FID announcement August 2022; Santos Q4 2025 Report; Santos Q1 2026 Report; Alaska Department of Revenue Fiscal Analysis of Pikka Phase 1; Alaska Department of Revenue Spring 2026 Revenue Forecast; Alaska Landmine / Brad Keithley analysis of DOR production tax data; Alaska Beacon reporting on ANS prices May 2026; Oil Search Alaska acquisition filings February 2018 and June 2019; Repsol Pikka FID statement August 2022; Alaska Policy Forum oil tax history; IRS Form 1120-F foreign corporation filing requirements; Section 263 Internal Revenue Code; US-Australia Tax Treaty protocol; Article 8 Section 2 Alaska Constitution.