Good Afternoon. I want to thank the Resource Development Council for the invitation to be here today and talk about the changes and transition occurring at ASRC. It is fitting to be in front of the resource development community today to talk about my time with ASRC because my history with ASRC is tightly linked to the resource development industry on the North Slope. And it is important to me that I have the opportunity to thank the industry for working with ASRC for all of these years; without the petroleum exploration and development activities in our backyard ASRC would not be the corporation it is today with the successes we have be able to achieve. So thanks again to the RDC for providing to me the opportunity to say quyanakpuk!
The theme of this year’s conference is “Transition” and we see transition all around us; transition at ASRC, we have a new Governor and are now going through transition in the State government and following the elections we have seen radical changes in the Federal governments as well with the Democrats taking over both houses. We are even in transition here at RDC. Welcome to Jason Brune the new executive director - I wish him well knowing he will do well following on the heels of out-going executive director Tadd Owens who is moving on to new endeavors at Pioneer. Congratulations to both of you.
These are times when all of us need to be involved in the processes of change and transition. Change is around us everyday; and we have to accept what the Inupiat people have known for millennium; and that is change can be positive.
I am here to talk about the transition ASRC is currently under and to introduce my very capable successor, Bobbi Quintavell. But before we talk about ASRC’s future, I would like to spend a little time on ASRC’s past.
It is part of the Inupiat culture to adapt and change and transition to new situations. It is through this adaptability, rooted within the Inupiat culture, that has allowed ASRC to become as successful as it is today. We have embraced opportunity and have not been afraid to stand up to the big issues. The Inupiat Eskimos of Alaska's North Slope have lived for thousands of years in the unforgiving world of the Arctic. The Inupiat people enjoy a self-sustaining, highly developed culture. All members of our community survive through sharing and the wise use of our natural resources.
In accordance with the ways our Elders taught us, and as we teach our children in turn, the Inupiat harvest bowhead whales from the icy Arctic Ocean; hunt caribou from the broad coastal plain; catch fish in the streams; and gather berries in the brief Arctic summer. Our culture calls on us to be thankful for these gifts of the land, and to share them for the benefit of all.
The discovery of oil at Prudhoe Bay in 1968 brought radical and irrevocable changes to the Inupiat way of life on the North Slope. The nation wanted and needed this new source of oil. But the Inupiat people had a valid legal claim to ownership of all North Slope lands through historic use, occupancy and aboriginal title. Once again, our lands provided the basis for the people of the North Slope to prosper despite being buffeted by the winds of change.
Through hard work, a willingness to learn, and the guidance of our Elders, Arctic Slope Regional Corporation has grown into an important Alaska business enterprise. Our successful operations permit ASRC to return benefits to shareholders in the form of steady jobs, vocational training, dividends, scholarships and other services.
It is difficult to overestimate the importance of the land to the Inupiat people; our land provides the subsistence food many shareholders depend on to feed themselves and their families. Our land provides the critical connection with our ancient culture and traditions that is necessary for our spiritual well-being. And, in the form of jobs and tax revenues from the petroleum industry it supports, our land provides the opportunity for economic security, self-determination, and freedom.
Over three decades of exploration, development and production, the oil industry operating in and around the North Slope, even while representing the forces of change, has brought benefits to our nation and our people.
Many of you sitting in the room today represent companies that have been critical to ASRC’s success and have been with us from the very beginning. After the passage of the Alaska Native Claims Settlement Act, ASRC needed to identify high resource potential lands on the North Slope under the land claims. We were entitled to 5,000,000 acres of land however we couldn’t make any of our selections in or around the Prudhoe Bay discovery, nor could we select inside the NPR-A or ANWR. Instead we were forced to select lands outside our traditional use area and as a result we were focused on selecting the best land for resource potential.
We felt that through resource development we could be successful in building an economy on the North Slope that would allow our people to ride the winds of change out of its poverty state into one were they could enjoy the benefits and qualities of life that most people take for granted. So our problem was how to select lands with the best and highest potential for oil and gas reserves. We started talking to the oil industry who, at the time, were in a leasing frenzy after the Prudhoe Bay discovery.
After a lot of discussion and negotiation we entered into three agreements, one with Chevron, one with Unocal and one with Texaco to explore the lands of the North Slope and recommend areas for ASRC to make its land selections. I find it amusing that those three companies are one single company today through mergers and acquisitions – apparently the winds of change blow on them, too. I wonder who has the longer staying power, an oil company or ASRC.
Chevron ended up being our long-term partner with a relationship that began with ANCSA and still in-place today. They ended up drilling seven exploration wells on our lands six of which were dry holes and the 7th is the mysterious KIC #1 well outside Kaktovik in ANWR. These were big projects by today’s standards and while Chevron never had a development on ASRC lands it was through the bonuses and rentals and other considerations we received that provided ASRC with the capital to invest and make initial acquisitions. Through these early exploration programs on our lands we were able to bootstrap ourselves into the construction and oil-field services industries.
I look around the room and I see company names that have been long-term partners and clients of ASRC’s through the ups and downs of oil exploration and development on the North Slope. ConocoPhillips is here, formerly but briefly known as Phillips and before that Arco Alaska Inc. It was Arco and their partner Anadarko that made the first oil discovery on ASRC lands in 1994 through the Bergschrund Well. It was this well that discovered the Alpine Oil Field. We love Alpine at ASRC; it helped us realize the reality of ANSCA. The land claims was designed to allow the Native corporations to realize some of the wealth through development of their lands and for the first time we were able to see the benefits of land ownership.
On our lands today we have agreements with ConcoPhillips, Anadarko, Chevron and the partners of these companies: BP, Pioneer, PetroCanada and British Gas. This is the first time that ASRC has had such a diverse group of industry partners involved with us and we are very excited at the possibilities these companies bring to the mix. We are seeing renewed interest and excitement in areas of our lands that we thought were played out 10 years ago. The technical diversity the partnerships bring to the table is truly astounding. Our subsidiaries are working with companies that aren’t exploring ASRC lands but are looking at State and Federal lands. I think through the combined force of our land and exploration agreements and our oil-field services agreements through ASRC Energy Services we are currently involved with every oil and gas company exploring for or developing reserves on the North Slope.
And of course we have now entered into a multi-year agreement with BHP Billiton to evaluate our coal resources in the Western Arctic. I am very excited about this; BHP Billiton is the largest diversified mining company in the world. They have a market cap of over $120 billion which provides them with the wherewithal to make something happen with our coal. One of the appealing qualities that BHP Billiton brought to our agreement was their corporate commitment towards community sustainability to our villages. We are very excited about BHP Billiton’s approach to the communities which is very much more focused on community development than we have ever experienced in the past and we are hopeful that they will be successful in achieving meaningful opportunities in our villages adjacent to the coal fields.
I hope that in the near future that ASRC is a diversified energy producer as well with oil and gas from exploration with our partners on the North Slope and in the Nenana Basin to coal production from our lands in the western Arctic.
ASRC is beginning to invest in exploration opportunities on the North Slope and in Nenana Basin. Through our Strategic Alliance with BP we have already drilled two wells and we hope that we can negotiate additional agreements with BP in the near future. We are also participating with Anadarko and British Gas on the Jacobs Ladder exploration program. These are exciting times for ASRC; ASRC is currently in a very strong financial position and I am happy to be able to leave the company in such good standing.
But before I leave you here today and leave ASRC at the end of the year I have one remaining challenge to both you out there in the industry and to Bobbi my successor; and that is to work with me and ASRC into the future toward stronger community sustainability. Even as we change and transition, we must nurture and grow the roots that have made us strong. I feel that we are just scratching the surface. I realize that industry has put a lot of money into jobs and training for our shareholders but we have not fully explored the potential for business development in our villages to ensure they are self-sufficient once you are gone. I want to challenge you to work with ASRC toward greater positive socio-economic impacts to our communities through creation of more small businesses in our villages. We want to fan the flame of entrepreneurial businesses that take advantage of capital, advice, and infrastructure provided by ASRC businesses. We want to make greater opportunities for good jobs that can co-exist with subsistence ways of life. We will strive to steadily increase numbers of people who take advantage of educational, training, job assistance, and health resources in order to take responsibility for their socio-economic well-being. Please work with us to create joint ventures with other regional and village corporations that create positive, mutual outcomes by providing you with the capabilities you require. And lastly, ASRC is focused on increased private sector and foundation investment in the well-being of our local communities.
While I am stepping down and retiring as President and CEO of Arctic Slope Regional Corporation, which to me is the greatest corporation in all of Alaska, I want you to know that I will continue to serve out my term on the Board of Directors and so will remain involved with the corporation through the near-term. And who knows what the future may bring? But one thing is certain and that is that I will be spend significant quality time with my wife Lucille who has allowed me all these years away from my family, and with my family doing those things on the land that I love so well and learned from my elders. I will be out there on the land with you, watching and observing so look for me. Thank you again for all your support over the years.
And now I would like to introduce Ms. Roberta Quintavell, my successor as President and CEO of ASRC. Bobbi has served in various capacities with the Arctic Slope Regional Corporation (ASRC) over the last 17 years. She has served on the Board since 2000, where she has been Chair of the Investment committee and Chair and Co-Chair of the Audit Committee. Currently, Quintavell serves as the President/CEO of the ASRC Construction Holding Company. She earned a BBA in Business Management with a minor in Political Science from the University of Alaska Anchorage; and a PMD from the Harvard Graduate School of Business.
ASRC went through an extensive Management succession plan where we identified four potential candidates as my successor. Through many interviews and exercises performed over the last two years, Bobbi has time and again risen to the top with her commitment and dedication to the company. Bobbi’s experience in operations also assisted in helping her stand out to the ASRC Board of Directors with whom the final decision resided. In July, Bobbi received the majority of the Board votes as President-Elect to ASRC. Please help me in recognizing Bobbi Quintavell.
