By SUZANNE DOWNING
Even as oil executives at President Trump’s White House meeting on Friday pointed to new Alaska production as a turning point for the state, the global reality of roughly $40-a-barrel oil casts a shadow over that optimism.
On Jan. 9, President Donald Trump convened a high-profile session at the White House with top oil industry executives to discuss global energy investments, including potential expansion into Venezuela’s oil sector. Before the closed-door talks, each executive around the table was given an opportunity to introduce themselves and offer brief remarks.
Three of those executives made specific reference to the state of Alaska’s role in the nation’s energy landscape, highlighting ongoing investments and the broader implications for Alaska’s struggling budget and economy.
Repsol CEO Josu Jon Imaz referenced his company’s long-term involvement in the American energy sector, including a major project on the North Slope of Alaska, the Pikka project that is a partnership with Santos. He said Repsol has invested over $21 billion in US oil and gas over the past 15 years, including in Pennsylvania, the Gulf of Mexico, Texas and Alaska. He noted Repsol’s work on Pikka on the North Slope, stating that it was poised to deliver first oil this quarter and “reverse the declining history of that great state of Alaska.”
Repsol’s remarks align with industry forecasts that Alaska’s crude production, which has suffered decades of decline, is expected to grow in 2026 as new developments come online. According to the US Energy Information Administration, production from projects such as Pikka and Nuna will raise output after years of erosion, marking the state’s first annual increase since 2017.
Repsol’s Pikka project, which has advanced toward first oil in 2026 with an $2.6 billion investment and projected peak output of about 80,000 barrels per day, represents one of the largest recent oil developments in Alaska.
Bill Armstrong, speaking for Armstrong Oil and Gas, also made note of his company’s history in Alaska. Armstrong said his company made what he described as the “largest discovery in Alaska” and the “biggest discovery in 50 years in our country,” positioning Alaska as a significant source in US energy production.
Those remarks reflect the industry’s ongoing interest in the Nanushuk formation on the North Slope, where Pikka and other discoveries have bolstered optimism about Alaska’s hydrocarbon resources.
Hilcorp Energy’s founder and chairman Jeff Hildebrand, who also spoke at the White House event, also spoke at the event, expressing optimism. Hilcorp operates the multiple North Slope assets and is one of the larger private energy producers in the state.
Alaska’s economy and state budget remain deeply tied to oil revenue, and these industry developments come at a challenging fiscal moment. Recent state revenue forecasts project only modest growth in oil tax and royalty receipts despite increased production, largely because projected oil prices remain relatively low compared with historic highs.
In fiscal estimates released in late 2025, oil revenue was forecast to increase from about $1.43 billion to $1.44 billion, even with new production entering the market. That modest uptick falls far short of covering projected budget deficits that exceed $1.8 billion, according to the state Department of Natural Resources. At this point, most of Alaska’s state budget comes from the Alaska Permanent Fund itself.
Alaska’s reliance on petroleum revenues for core government services, including funding education, infrastructure and Permanent Fund Dividend payouts, makes oil price and production trends central to the state’s fiscal health. Lower oil prices, or example, around $40 per barrel, would sharply impact the state budget reducing revenue available for both government operations and Alaska Permanent Fund dividend.
Efforts to bring new production online, such as at Pikka and Nuna, carry implications for jobs in the state. Industry data suggest that multi-billion-dollar projects like Pikka could support thousands of construction jobs during the build-out phase and hundreds of sustained operational positions once production begins.
7 thoughts on “White House oil execs point to Alaska’s comeback — but $40 oil could post challenge to state budget”
Well, AK907 could ride out these swings in Crude Oil commodity price swings a lot better if the State Guv’ment was a lot more efficient and frugal, trimming the vast amount of useless and wasteful fat (and welfare) from the annual budgets, all of those items that don’t pay any dividends and/or provide meaningful ROI! Certainly, with the advent – progress in AI and Robotics (especially the Tesla Optimus Robots), we should see opportunities to cut very expensive and inefficient State employees, just like within the private service. Why should it be any different in the public sector?!?!
The oil industry executives only see Alaska in a rosy picture because they don’t have to live on Alaska putting up with Alaska government leaders narcissism and dysfunction
Alaska is a long shot away from being prosperous to which it depends on Alaskans how much more smarter and independent we can be away from government
Prosperity is more than just seafood, oil and gas you can’t live on it for generations before it runs dry
Tina, always the downer. Tedious and predictable. I like comments from the Right wrong side of things (even Steve-O) but you are all over the place and always depressing..
You misspelled especially.
Legislators heading back to Juneau fear nothing about the probable drop in oil sales. They simply prefer to spend the PFD to support the fat hog they raised until that runs out and then roll out the new taxes on everything as they learned from their Democrat fruits and nuts from Cali. The glimmer of hope on the horizon is gas at the pump should be lower as you commute to your second job to be able to “live your dream”.
Zzz
When oil prices drops it benefits the average Alaskan, when it rises it costs the average Alaskan. Low oil prices hurt the state government because they are still budgeting as if oil prices were astronomically high, even though history tells us that high oil prices are the exception and not the norm. When oil was above $100 a barrel for a few short months the legislature more than tripled spending and refused to cut when prices dropped, fortunately for them there was another brief period of time where oil went above $100 a barrel and so spending levels remained artificially high, just as they currently are. Oil is currently in the high $50 range with forecasts calling for it to remain in this neighborhood for the remainder of the year. If our government can’t budget based upon the historical average cost of oil there is a problem, and as we all know there is a problem. In the 2000’s oil averaged in the $30-$70 range, in the 2010’s oil averaged in the $70-$80 range, and the 2020’s so far oil averaged in the $50-$80 range.