Text of speech, as provided.

Well, good morning. And Governor, you so eloquently and in a substantive way stated the situation, and I think I just wanted to say you really, really did that well and I want to say thank you very much for the personal comments about our company and myself personally.

It’s always good to be here in Alaska. As I said, Governor, I always appreciate your commitment to this great state, and you have fought tirelessly for the interest of Alaskans as you did so with honesty, fairness, and vision, that we are stronger, as you said, when we all step back and have a common goal and we work together.

Most of all, I appreciate your friendship over the years, and thank you also to Mark and to Jim and the entire Make Alaska Competitive Coalition for helping to facilitate this conversation and to the Resource Development Council for making this venue available here this morning.

There are also a number of Alaska’s political leaders, leaders from the Native community, and other industry supporters that have spoken out on the need for change, and I appreciate your interest and your personal leadership on this important matter.

It’s always good to be in Anchorage. It’s good to be anywhere in Alaska with the spring just around the corner, I might add. We’ve got to keep going around a couple corners, I think. I understand, you know, it can snow at any month of the year. In fact, it’s always good for myself and for ConocoPhillips to be in Alaska, and as the Governor said, we’ve got a long history here through our heritage companies, one that goes back all the way to the 1950s.

In the words of Bill Bishop -- he was a geologist for ARCO back then, “I dug the heel of my boot into the dirt and said drill here, knowing we didn’t have much going for us except gut instinct and any luck we earned along the way.”

So Bill, he was ARCO’s first Alaska employee, but then six months later, that well had reached target depth and found nothing. By the way, this is not unusual in our case, more often than not.

So another fellow named Ray Arnett ordered the rig crew to drill just a few feet more and the rest, they say, is history.

Recently, some have questioned the oil industry’s commitment to Alaska, and in response, I was asked to share my perspective on improving the oil industry outlook for Alaska. So I’m here today, and I have three key messages that I would like to make.

First, new investments are the key to a sustainable future for Alaska. Past investments, as good as they are for decades, can only fuel the state economy for just so long.

Second, the time is now. I think we’re at a crossroads, truly at a crossroads. The time is now for the industry and Alaska to align on a common goal of increasing oil production and that requires us to step back and look at what the future holds, come together as we have, as the Governor said, and trust, talk through the important issues and make the important decisions. That’s what we have done in the past. We know we can do it. We’ve got to do it in the future.

Third, Conoco Phillips remains committed to advancing major projects and activities here, if Alaska’s business environment is improved. We have the resources. The opportunities are there, but we do need to have the incentives to go forward, like we have in the past, as true partners.

Understanding Alaska history is important if we are to repeat the successes of the past. That history would be far different today without the oil industry. Beginning with the Swanson River discovery in 1956, the history has a legacy of more than 50 years in Alaska. We’ve enjoyed what has been developed. Obviously, we go through times of challenges, whether it’s oil prices, but we also go through the challenges of differences of view. But in true partnership, we step back and we figure out how we can handle and resolve these for the long-term.

Throughout this time, we have been a key player through our predecessors, like Phillips Petroleum, Conoco, and ARCO Alaska, and then as ConocoPhillips. The pages of Alaska’s history book are filled with contributions that have shaped the state that we all know today. How different that might be without the building of the Trans-Alaska Pipeline, for example, and passage of the Alaska Native Claims Settlement Fund [Act] and creation of the Alaska Permanent Fund.

In 1952, Phillips was the first company to receive permission to drill in Alaska. Others soon followed. Among us, we drilled 165 dry holes, but we stuck with it. And finally in 1956, the test well was drilled at Swanson River by ARCO. Alaska’s first Governor, Bill Egan, credited that discovery with providing economic justification for statehood.

Now let’s move forward 11 years later when a Last Chance well found oil on the North Slope, following roughly a dozen dry holes in March 1968. ARCO and Humble Oil announced discovery of Prudhoe Bay, the largest oil field in North America. In 1969, the Trans-Alaska Pipeline system, or TAPS, was formed to transport this oil to the market. By the late 1970s, oil was on its way, becoming the backbone of Alaska’s economy.

Next came Kuparuk. And then in 1996, the discovery of Alpine, partially on Native lands, was North America’s largest find, at that time, in more than a decade.

Alpine Development ushered in a new relationship with ConocoPhillips and a Native community through royalty payments and revenue sharing mechanisms of the Alaska Native Claims Settlement Act.

Now we are a company. We’ve gone through a few names changes along the way in creating ConocoPhillips, but Alaskans and ConocoPhillips share a more than 50-year relationship with benefits for all. And I really believe this, we get this right and we sort these opportunities out properly and we can be here together working and creating real value for the next 50 years. Make no mistake; Alaska is very, very important for ConocoPhillips.

Alaska has helped ConocoPhillips become a stronger corporation, and oil revenues have helped Alaskans achieve a high quality of living, and this is a relationship that’s built on mutual respect and shared prosperity. Together, we’ve worked; we’ve explored this great land. By the way, there’s a lot more exploration than can be done. We’ve discovered, developed, and operated several of the Nation’s biggest oilfields, constructed its most important oil pipeline, and set new standards for environmental care, and this was achieved, obviously, by working together in mutual trust for the good of all.

During periods of low oil prices -- the Governor talked about this -- the industry succeeded in developing better ways and adapting to doing business. When resources began to deplete, new discoveries were made, better ways to use of technology were implemented to extend the lives of existing fields.

Now these accomplishments came in a remote land with a forbidding operating climate and unprecedented challenges. We’ve led the way. So looking ahead, we see that many of the old challenges remain, and at a time when a pioneering spirit and cooperation are more important than they have been for decades, new challenges have arisen.

Our country has withstood a very, very deep recession and is struggling to rebuild its economy. Alaska hasn’t seen quite the same impacts as the rest of the nation or the rest of the world. This was largely thanks to strong oil prices, which matched the underlying challenges that are now starting to surface. We know there are huge resources remaining on Alaska’s North Slope, as well as offshore, but they cost a lot more to develop and they carry a great deal more risk, technical risk than the oilfields that have been discovered in the past.

Even with industry investments over the past several years of $4 billion annually, we have been unable to stop the State’s production decline. More and more of these investments that we are making are consumed, and rightfully so, in maintaining and upgrading the older pipelines and facilities and not on developing new oil. Why do we do this?

With the use of technology, we’re finding we can extend the lives of these fields and create and exploit even more than what we ever thought, but we do have to spend a great deal of money, capital money and maintenance, to make sure we do this in the right way.

Meanwhile, Alaska plays an ever-diminishing role in meeting our Nation’s energy needs. Develop our indigenous resources. Do this in a way that promotes investment. Put Americans back to work, and we have energy security when we develop our own resources. TAPS faces new challenges with less oil flowing through the pipeline. And by the way, when the oil pipeline -- the oil going through the line, that doesn’t mean it goes from 650,000 to zero. When it starts getting down to 300,000 and 400,000, there are serious technical issues of its ability to continue to flow. So it’s all the way to zero. We’re reaching that in the next several years.

In January, the shutdown illustrated the real risks that Alaskans face with this decreasing flow. Alyeska has clearly communicated the associated operating challenges and its exposure to significant investment requirements as volumes decline.

So what I’m saying about the TAPS pipeline is, if it doesn’t flow -- and we’re talking just several years from now -- it’s not just what takes place to get it going again. It takes a lot of money and the real technical challenge to see that, if you don’t keep the flow going continuously, what happens and nothing is flowing and there is no revenue.

The current decline rate of 6% per year is already creating the challenges for TAPS. As the oil flow decreases and temperatures drop, the challenges of keeping the oil moving are real significant challenges and they’re technical challenges.

Alaska’s oil production today is based on past investments. I’ll say it again. Oil production and revenue today are based on past investments decades in the past, but we cannot keep living off the past if we want a viable oil and gas industry. Many of these investments were made years ago, as I said, when the State had a more balanced fiscal policy. Even with the significant lower oil prices of the mid-to-late 1990s, the industry, as the Governor said, was able to invest in new developments, such as the Alpine Field, which helped slow down the production decline for several years.

Oil industry projects need long lead times, particularly in Alaska where the harsh arctic conditions impact the pace of project activity, so it takes long-term vision to address the challenges around maintaining production.

The time to address a sustainable business climate is now. I truly believe the State, our company, our industry is at a crossroads, and it’s so important so that production and revenue can be generated for the future. What we do today impacts the next one, two, and three decades. This requires leadership. You know, anything with a challenge requires leadership. Leadership in our family. Leadership in our churches. Leadership in our state. Leadership in our industry. And it’s required at every level. It requires the industry and the State. We’ve shown we can do it in the past. We unite with a common vision, one based on the tough reality that short-term gains, creating winners and losers, do not make a sustainable future.

The overall business environment for the oil industry here has deteriorated over the last several years. We face increased litigation, numerous roadblocks with federal permits, tax structure with the highest progressivity surcharge of any OECD country. As a result, Alaska is not attracting as much investment as it should during periods of strong oil prices and that’s unfortunate. In fact, it’s just downright sad. Since there is so much more that we and our company could do in this great state, if the business environment was a little bit better or a little bit more balanced.

So that’s why I say, our industry, our state is at crossroads. The easy oil is running out. No other state’s production has declined more than Alaska’s, and we, as a company, participate throughout the Lower 48 as well as in Canada. So we see it and we experience it, and this decline, no other states more than the last eight years than Alaska by comparison. Lower 48 oil production has grown in response to higher oil prices. I know it’s a new province, new technology, while Alaska’s production declines, and drilling activity has tripled in the Lower 48 while Alaska’s rig activity has remained, at best, flat, but as the Governor said, has declined to one exploration well this season.

This is something is very important, that you may not think of: the service industry, the service companies are taking their expertise and moving to other states to improve the business outlook, and go where the opportunities are. This is important. This is alarming. Why? The industry needs these companies here in Alaska and the thousands of hard-working, experienced Alaskans that they employ in order for us to succeed today, as well as what we need from the service industry to invest for the future, if they help us find, develop, produce oil, and we do it safely, efficiently, and in an environmentally responsible manner, the importance of the service industry.

We at ConocoPhillips, share in the Governor’s vision of growing oil production in Alaska as he outlined just last week. He set an objective of producing one million barrels of oil per day in ten years. Why not? You know, it may not be one million, but if it’s 900,000, it’s 800,000, or whatever, every organization, every family, every individual, we should have aspirations and big goals. So when the Governor says one million barrels a day, it’s not pie-in-the-sky. The resources are there. We have the technology. So why not?

We support such a goal to help unite the industry and the State on a common platform. It’s a challenge, but I personally believe that goals need to be challenging, as I said, to help drive excellent performance. We get the most out of our company. We get the most out of the State. We get the most out of ourselves individually when we raise our expectations and we challenge ourselves to do something that, at times, may seem a bit unthinkable. And the other thing is we’ve got to think more than just about ourselves. We’ve to be thinking about the next generations.

Meaningful improvements in the business environment are needed this year. We need to do it this year because it impacts investment next year and next year and next year for the oil industry to begin helping, as we have as partners in the past, to see that Alaska, once again, realizes its full potential. The potential is there, and it’s more than we even see today when we put ourselves to work as partners.

Changes to the production tax structure are needed. These include dialing back the effects of an increasingly progressive surcharge tax -- it needs to be fair and balanced though. We understand that -- and improving tax credits to spur new well activity because the new well activity is absolutely essential to find the new fields.

Our past investments cannot sustain Alaska’s economy in the future. The past investments that we’ve made in our fields will not sustain the future for us for 10, 20, 30 years in the future. Creating a business environment that encourages private sector investment has worked here well in the past. We know that. We know how to do this, but it takes both sides stepping back and saying look; we have a tremendous opportunity. What do you need? What do we need? Now let’s take a balanced approach and let’s think through what needs to be done, agree, and then move forward. It certainly can work again, but it takes commitments to improve the future and cannot be accomplished by thinking only of the present.

ConocoPhillips. We believe in commitment. We believe in setting high expectations and goals. We believe in Alaska and its potential. Alaska is so fundamentally important to our company and its growths and what Conoco Phillips will be in the future.

Through our rich history together -- and I say our rich history together; I am talking ARCO, Conoco, Phillips, and now ConocoPhillips. We’ve demonstrated this commitment to our partners, and these include, as our partners, the State, Native corporations, co-ventures, local communities, and the industry support services. We need them all, and they are all our partners.

We have stood with many Alaskan companies to build an industry that provides thousands of jobs to Alaskans. So by working together, we can achieve our goals, but only -- we know this -- if we act together as a team.

Today, I’m here to reinforce our commitment, Conoco Phillips’ commitment to Alaska. If the business environment has changed for the better, we’re willing to join Alaska as we have in the past and moving forward the goal of not just stopping decline but actually increasing oil production and helping the Governor and the State achieve its goal of one million barrels a day.

Let me explain the short-term commitments that we are prepared -- and I say the short-term. We’re always thinking about the long-term as well, but let’s just talk about the short-term.

We, at ConocoPhillips, commit to do more to help bring Alaska’s challenged oil to the market in the short and medium term. We will increase our drilling activity on the North Slope, driving for new, innovative ways to increase production from existing fields in the short to medium term. We will proactively pursue more North Slope projects, to move the needle on production, while employing Alaskans and creating new opportunities for local business.

One example in a project, like this, is the gas partial processing plant, I-PAD, at Prudhoe Bay, a project that we know. It’s identified. It’s incremental production. It’s probably in the neighborhood of $1.5 to $2.0 billion of investment. We will work with our partners, BP and ExxonMobil, to advance projects like GPP –I-PAD at Prudhoe Bay. The project, itself, is about 50 wells, additional facilities, deep bottle neck gas processing, and as I said, increase production at Prudhoe Bay project, as much as $2.0 billion in investment.

We, as a company, will aggressively pursue more satellite developments than have already been announced or approved with our co-venturers at both Kuparuk and Alpine, projects like those associated with the heavy oil of West Sak, at Kuparuk, and additional Alpine satellites that we know exist. They’re more challenging. They’re smaller, but over and beyond the CD-5 project that’s out in the Alpine area. They’re commercially challenged, but with some help, new paradigms, as proposed by the Governor, we really think these additional satellites should be commercially developed and that adds incremental production.

In the short-term, it is the existing fields where the investments will return the most immediate results. This is where we can begin to slow the production decline and reverse the trend most quickly.

These commitments outlined today come with the understanding that we are in this together. Whether we like it or not, we’re in this together. We’ve had a great 50 years. We go through our challenges, and we’re at a crossroads right now. So let’s sit down and really sort this through and get this together. What the Governor had proposed is really what is required. Alaska’s fiscal structure needs improvements to ensure and -- get these improvements to achieve a common vision and ultimately move towards increased production.

We share the Governor’s vision of increasing oil production in Alaska and thus creating a solid foundation for the State, our industry, and Alaskans for another 50 years.

ConocoPhillips stands ready to invest our resources. When we talk about our resources, it’s our technology, it’s our people, and our financial resources to help make a brighter future for Alaska as well as for our company and our employees and all Alaskans.

Together, we can strengthen Alaska’s oil industry future, preserving jobs, business opportunities for decades to come. Again, the keys are: encouraging new investment through a more balanced fiscal structure, uniting around the common goal of increasing production, as outlined by the Governor. And the time is now to act to build a win/win partnership for the future.

Over the years, I’ve had a number of people come up and say to me that ConocoPhillips, our heritage companies, we are Alaska’s oil and gas company. I’m pleased to hear that. I’m actually very proud to hear that. We want to be known and continue to be Alaska’s oil and gas company. We’re willing to commit billions of dollars of investment, commit our technology and our people. So just let’s step back. Let’s develop the incentives. Let’s work together because we want to do this again for the next 50 years.

So we’re committed, certainly, to doing our part. Thank you very much for inviting up here this spring/winter. And again thank you very much, and we appreciate the support you can give to our industry and to the State on this very important subject. Thank you.