State prioritizes in-state refining with Marathon and PetroStar RIK contracts

The Alaska House Resources Committee convened on April 16, 2025, to discuss the state's process for selling royalty-in-kind (RIK) oil. The meeting focused on the competitive bidding process and the current status of contracts with in-state refiners.

The discussion began with an overview of the statutory process that determines the market's capacity for RIK oil sales. The Department of Natural Resources (DNR) explained that they conduct a solicitation of interest to gauge potential buyers. In this instance, Marathon was the only company to express a firm commitment to purchase additional RIK oil. Historically, other parties have shown interest, but only Marathon and PetroStar have moved forward with actual bids or proposals in recent years.

The DNR emphasized its priority to support in-state refining and usage of RIK oil, as mandated by state statute. This means that before considering sales to out-of-state buyers, the department must ensure that local needs for refining and industrial use are met. The committee noted that there have been no firm commitments for out-of-state purchases for several years, indicating a shift in market dynamics.

The meeting concluded with a summary of the current contracts and the importance of prioritizing in-state refiners. The committee acknowledged the limited time for questions and discussions, highlighting the need for further engagement on this topic in future meetings. Overall, the session underscored the state's commitment to supporting local refineries while navigating the complexities of oil sales.