Opinion: The ‘Corrupt Bastard’s Club’ is alive and well

Opinion: The ‘Corrupt Bastard’s Club’ is alive and well

Their loyalties are to the oil companies, not you.

  • By RAY METCALFE
  • Monday, April 1, 2019 1:14pm
  • Opinion

Today BP is in a joint venture with a Chinese company. Together, they are producing 3 million barrels per day from Iraq’s Rumaila field. The two companies share a payment of $4.2 million per day for their services.

Today BP, ConocoPhillips and Exxon are providing the same service for Alaska with one big difference: in Alaska they are being paid over $12 million per day to produce a little under one-sixth that amount. Alaska pays its producers 17 times as much per barrel as the competitive bid process has clearly gotten our big three producers in other parts of the world.

Take a look at a copy of BP’s contract with Iraq: citizens4ethics.com/site/bp-iraq-contract/. Ed King, Alaska’s oil economist who is advising the Legislature, remarked that I could not use the BP Iraq contract as an example, because according to him, BP “simply walked into a producing field and took over under a technical services contract.”

[Opinion: Changing Alaska’s oil tax policy again would stall economic momentum]

Not true, Ed.

BP explored for, found and developed Iraq’s Rumaila field. Between discovery in 1953 and 1961, BP took profits from the field as they owned it. In 1961, Iraq reasserted ownership and began taking the lion’s share of the profits, and in 1975, Iraq gave BP and its production services the boot.

In 2009, BP regained access in a competitive bid cost-plus contract, agreeing to increase Rumaila’s production from 900,000 barrels per day (BPD) to 3 million BPD. It took about eight years to get to 3 million BPD. BP assumed full “at cost” responsibility for continuing the production of the 900,000 BPD, agreeing to be paid $2 per barrel on the increased production only. It took eight years to add 2.1 million BPD, which now pays BP and its Chinese partner $4.2 million per day.

[30th anniversary: Exxon Valdez oil spill inflicted lasting wounds]

By BP’s own admission, there is no difference between its technical service contract with Iraq and supplying engineers and its hiring of subs on Alaska’s North Slope. However, there is one really big difference. In Alaska, according to ConocoPhillips’ 2018 second quarter report, they are taking home over $25 per barrel in Alaska, and in Iraq, BP is taking home $1.40 per barrel. Exxon and ConocoPhillips have similar contracts to produce other Iraq fields.

Your legislators who want to wreck our schools, close our ferry system and take your dividend are fully aware of this. The “Corrupt Bastard’s Club” is alive and well. They control the state Senate and the Governor’s office. Every year they are giving another $3 billion that rightfully belongs in Alaska’s public treasury to their friends in the oil companies that pay for their campaigns.

Their loyalties are to the oil companies, not you. It doesn’t do a bit of good to find more Alaska oil if Alaska doesn’t get paid for it. Go to the hearings and call them on it.


• Ray Metcalfe lives in Anchorage. My Turns and Letters to the Editor represent the view of the author, not the view of the Juneau Empire.


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