US-based Polar Petroleum said that oil companies such as BP, ExxonMobil and ConocoPhillips are planning to invest an additional $1bn in the next five years on the North Slope of Alaska, being encouraged by Alaska's new industrial oil tax policy.

The new tax system has been prepared to abolish the structure of raised tax rates, which are contributing to higher oil prices.

The previous tax system of Alaska exceeded 50% tax rate, when oil prices were high, making Alaska less attractive to energy companies.

BP plans to increase capital spending at Prudhoe Bay in Alaska by about 30%, which includes addition of two new onshore rigs and bring the company’s total fleet in the area to 9 working rigs.

BP also secured support from the other Working Interest (WI) owners such as Exxon, ConocoPhillips and Chevron to evaluate about $3bn worth of new development projects in the Greater Prudhoe Bay area.

Exxon and ConocoPhillips hold 36% interest each in the field, while Chevron has 1% interest.

The new development opportunities being evaluated include expansion and debottlenecking of existing Prudhoe Bay facilities, constructing a new drilling pad and expansion of existing pads along with drilling of about 110 new wells.