Department Releases Spring 2011 Revenue Forecast
Juneau – Department of Revenue Commissioner Bryan Butcher released the Spring 2011 Revenue Forecast, which provides an update to the Fall 2010 Revenue Sources Book released in December. The department projects the state will collect approximately $7.3 billion in Unrestricted Revenue in FY 2011 and $7.3 billion in FY 2012, this compares to the Fall 2010 Forecast of $5.4 billion and $5.7 billion, respectively.
The department now forecasts Alaska North Slope oil prices to be $91.13 and $94.70 in FY 2011 and 2012 respectively, compared to $77.96 and $82.67 from the Fall 2010 Forecast. Revenue from oil and gas production is expected to provide over 89% of the state’s unrestricted revenue through FY 2020.
Oil production on the North Slope in FY 2011 is forecast to be approximately 605,000 barrels of oil per day, a 6.0% decline from FY 2010, and in FY 2012, we forecast a 0.8% increase, to approximately 610,000 barrels per day. Production began in February of 2011 from the Nikaitchuq field, the Badami field has been re-started and development is continuing in the Oooguruk field.
In order to calculate revenue under production tax laws, our forecast must include assumptions regarding oil prices and investment levels. Our forecast assumes that demand for petroleum products continues to rise as the global economic recovery continues. We also expect that as turmoil in the Middle East and North Africa persists, there will be concerns about supply disruptions and therefore higher and more volatile prices in the short term.
We forecast spending on the North Slope to continue at slightly higher than current levels, but less than previously forecast in the fall. Total expenditures are seen increasing in FY 2011, with forecasted lease expenditures of $5.0 billion and $5.3 billion in FY 2011 and 2012, respectively. This represents a slight decrease in expected spending compared to the Fall 2010 Forecast amounts of $5.1B and $5.5B, respectively.
Unrestricted non-oil revenues are forecasted to total $479 million in FY 2011 and $482 million in FY 2012. These estimates are up from $416 million collected in FY 2010.
To download a copy of the Spring 2011 forecast, visit the Tax Division’s website at www.tax.alaska.gov.