oil-tax formula at low oil prices. In late 2013, North Slope crude sat at nearly $115 a barrel. Today, it’s sitting at less than $50 with no end in sight to the low prices. New work is helping to stabilize the rate of North Slope oil production and put new oil into the pipeline, but a steep turnaround to the decline could be years away. It doesn’t have to be this way, as incredible opportunities still exist for Arctic onshore development. For example, I’m pleased to see work at the long-anticipated Alpine satellite CD-5 finally begin – hopefully enabling future development in the National Petroleum Reserve-Alaska, or NPR-A. This is a project that many, including our partner, ConocoPhillips, were uncertain about; they wondered if it would ever get off the ground because of continual governmental red tape, costly delays and permitting hassles. This site is the first oil development within the boundaries of the NPR-A and could produce more than 15-thousand barrels per day alone. We also invested in our future by finding alignment with Royal Dutch Shell and its offshore exploration and development program. ASRC, together with six North Slope village corporations, formed Arctic Iñupiat Offshore, known as AIO, for investment in Shell’s leases in the OCS. We formed AIO in 2014 with a healthy sense of optimism and closely monitored Shell’s progress back to the water. However, that optimism turned to disappointment in late September after Shell’s announcement regarding its exploration well in the Chukchi. While Shell did discover indications of oil and gas within the Burger prospect, the company found the reserves were not economically viable to warrant further exploration. While we do not expect any material financial charges as a result of Shell’s announcement, in its decision, Shell also highlighted the challenging and unpredictable federal regulatory environment surrounding Alaska’s offshore. Unfortunately, the regulatory environment has proven to be a burden for any development, whether onshore or offshore and I believe with this type of uncertainty we will continue to see good opportunities slip away. Make no mistake - this is no victory for environmental groups now celebrating the decision; it should be seen as a major blow for Alaska, and leaves into question the viability of our state’s economy. We are still assessing the impact this announcement will have on ASRC. One thing is for certain – our Iñupiat culture is one built on a bedrock of perseverance and resilience. We will continue to keep our gaze on the long-term horizon while embracing opportunities to strengthen the bond throughout our communities and our culture. Taikuu,
 Rex A. Rock Sr. President, CEO
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ASRC honored to lead Top 49ers list for 21st consecutive year ASRC is pleased to once again be recognized by the Alaska State Chamber of Commerce, Alaska Business Monthly magazine and local business leaders as the top Alaska-owned and operated corporation. This is the 21st consecutive year that ASRC has ranked #1 on the “Top 49ers” list, based on the prior year’s gross revenues. The list was released during a luncheon at the Dena’ina Civic and Convention Center in downtown Anchorage at the end of September. The list can be seen in its entirety in the October 2015 edition of Alaska Business Monthly magazine.
“2014 was another year of growth and expansion for ASRC,” said Rex A. Rock Sr., ASRC president and CEO. “With the national economy continuing to pose challenges in many areas of our lines of business, diversification has been one of the keys to our success. To the other distinguished Alaska-based businesses on this list, my congratulations for a successful year.” In 2014, ASRC’s revenues topped $2.6 billion. ASRC has six major business segments, to include petroleum refining and marketing, energy support services, construction, government services, industrial services and resource development.
ASRC announces new acquisition Arctic Pipe Inspection is now a member of the ASRC family of companies. In late July, ASRC announced the acquisitions of Arctic Pipe Inspection, Inc. of Houston and Arctic Pipe Inspection, Inc. (collectively, “API”). Headquartered in Houston, Texas, API was founded more than 40 years ago by Royce Roberts to provide non-destructive testing of oil country tubular goods. API currently operates facilities in Houston, Texas and Deadhorse, Alaska providing electromagnetic, ultrasonic, weldline and mill inspection services to oil and gas producers and service providers. “This acquisition demonstrates ASRC’s continued commitment to the oil and gas industry,” said Rex A. Rock Sr., president and CEO of ASRC. “Over the last 40 years API has earned a reputation as a customer focused, value-added service provider. ASRC is committed to maintaining and building on API’s reputation for superior customer service, while also facilitating opportunities for growth.” “Today is an exciting day for API and its employees,” said Royce Roberts, API founder and retiring president. “I believe the combination of ASRC’s financial support and relationships within the oil and gas industry will provide opportunities for growth and expansion of API’s services.” Concurrent with the retirement of Royce Roberts, Jim Hildebrandt, API’s long-time vice president of operations, assumed the role of API president and general manager.
THIRD QUARTER, 2015
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VOLUME 35
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ISSUE 3
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