North of 60.(From the Publisher)

Alaska is a very good place to do business and our North Slope oil patch partners know that all too well.

In the latest round of disparaging remarks spewing forth from Rex Tillerson, the two-year-long president of ExxonMobil, he wrongfully calls Alaska's fiscal veracity into question.

Where Exxon is concerned, it may be observed that often the best defense is a good offense. As Shakespeare wrote in Hamlet, "Me thinks the lady doth too loud protest."

Tillerson wails about Exxon's risk in investing in a (now) $25 billion dollar gasline project, when in fact, if all three North Slope majors go in on the line, the exposure may be only one-third that amount or nearly Exxon's Alaska net profits for one calendar quarter!

Over the course of the next year or so, the majors' combined investment in Alaska to replace neglected infrastructure and undertake limited exploration is estimated to be about $2.6 billion. The majors' net profits were north of $60 billion last year. Not bad odds, by most standards, even including return on investment, which any business has the right, even the obligation, to fairly maximize. The operative word here is "fairly."

That's all Alaska wants, just to be treated fairly in its dealings with the petroleum industry; and the industry has the right to get the same back from Alaska.

In recent months, the industry has had to lick its wounds following poor treatment when it got literally kicked out of Russia's SAC 2, and when Venezuela nationalizes the industry on May 1 and President Hugo Chavez takes over projects run by Alaska's three North Slope partners and Chevron. That kind of nationalism is taking place, or has already taken place in many of the oil provinces across the world. That will not happen in Alaska, and that is one reason why the majors need to treat Alaska fairly. Much of the rest of the oil world is likely to come under the same, inhospitable influences exhibited in so many other places.

Including Alaska, the United States has more than 2 percent of the world's known reserves. By contrast, Iraq has five times more oil than the U.S. Add in Norway, the U.K., Denmark and Australia, and the figure jumps to 4 percent. Then come Canada, China, Mexico, Brazil and Russia and about 16 percent of the world's reserves may be available for western majors to bargain for exploration and development.

Closed to outsider development and operation are the resources and reserves of Saudi Arabia, Iran, Kuwait, the United Arab Emirates, Qatar, Yemen, Libya, Nigeria, Algeria, Kazakhstan, Azerbaijan, Malaysia, Indonesia and Brunei, which together hold upward of 75 percent of the total oil reserves, give or take. Western oil companies need not apply.

Alaska is open for business. Let's make a deal.

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