Where is BP Going to Spend $1 Billion on Drilling?

BP PLC (NYSE:BP) has announced that it will spend $1 billion on Alaskan drilling over the next 5 years.

The oil company said it will use the money to upgrade existing facilities, increase drilling, and add two new drilling rigs in the Alaskan North Slope fields. The rigs are expected to be finished around 2015 and will increase BP’s Alaskan fleet to nine rigs. Alaska’s recent cut in oil taxes, including a 20 percent reduction in taxes on new oil produced, played a part in BP’s decision. BP has said that the new rigs will bring a combined 200 new jobs to the North Slope.

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BP, ConocoPhillips (NYSE:COP), and Exxon Mobil Corp. (NYSE:XOM) are the three major North Slope oil players. ConocoPhillips announced similar plans for expansion after Alaska’s governor Sean Parnell signed the tax changes into law last month. Exxon Mobile hasn’t announced its intentions yet, but there have been talks about an additional $3 billion in projects on the western end of Prudhoe Bay. Those plans include drilling up to 110 new wells. For any projects at Prudhoe to be completed, all three companies need to buy in.