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NEWS BULLETIN

January 02, 2001 --- Vol. 7, No. 1January 2001

BP pays state $34 million in oil royalties

BP has paid the state of Alaska an additional $34 million in royalties on North Slope oil and gas produced through 1999, Gov. Tony Knowles said Jan. 2.

The state said the payment concludes several audits of BP's royalty obligations and represents about 2.6 percent of the total royalties paid by BP from 1993 through 1999.

Payment was made Dec. 29. More than $10 million of the amount (almost 30 percent) will be deposited in the Permanent Fund. The balance will go to the state's General Fund.

BP also paid the state $1.2 million to resolve outstanding royalty issues between the state and ARCO for the period through Dec. 31, 1999, when BP assumed ARCOs royalty obligations as a result of the BP/ARCO merger.

Kevin Banks, petroleum market analyst with the Division of Oil and Gas, told PNA that the $1.2 million for ARCO was in addition to the $34 million, bringing the total the state received to $35.2 million.

Banks said that BP's royalty settlement allows them to deduct their actual shipping cost for crude oil, including marine transportation. That, he said, is what was audited. The state disagreed with BP on several items included in the transportation cost, Banks said, and after discussions about the items, BP agreed with the state's position.

DGGS schedules Jan. 18 meeting in Anchorage

The state Division of Geological & Geophysical Surveys will discuss its programs and invite comment at a meeting Jan. 18 from 1:15 to 3 p.m. in the Aleutian Room of the Anchorage Hilton.

The division said its objective is to provide an opportunity for interactive discussions between the division and industry, other agencies and the general public on the status of current and proposed geological studies of Alaska's energy resources oil, gas, coal and coalbed methane.

In addition to discussion, a questionnaire will be circulated for written input.

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