Royalty

Almost all Alaska oil and gas production occurs on state lands leased for exploration and development. As the landowner, the state earns revenue from leasing as: (1) upfront bonuses, (2) annual rent charges and (3) a retained royalty interest in oil and gas production. State oil and gas leases provide that the state may take its oil royalty in barrels (in-kind) or as a percentage of the production value (in-value). In FY 2007, the state took approximately 60,000 barrels per day of North Slope production in-kind. Royalty of Oil and Gas