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Providing coverage of Alaska and northern Canada's oil and gas industry
May 2006

Vol. 11, No. 22 Week of May 28, 2006

Oil certainty in gas contract completed

Alaska Gov. Frank Murkowski said May 24 that state and industry negotiators have reached agreement on the oil fiscal certainty portion of the gas pipeline contract — the final piece.

“This puts into contract form the agreement we reached with the producers’ CEOs last February,” the governor said in a statement. “At that time we announced the completion of the gas pipeline portion of the draft contract, as well as their agreement to pay a new net profits severance tax rate of 20 percent to replace the ELF. Completion of the oil fiscal certainty portion of the contract formalizes that agreement.”

Murkowski said he was pleased that the negotiations are complete, and is “very optimistic about the gas pipeline contract going forward.” The oil fiscal certainty adds another 100 pages to the contract, he said, adding that, “We have plugged in our 20 percent number for the tax rate, which we know the industry has accepted.”

Richard Owen, vice president of ExxonMobil Alaska Production, said ExxonMobil is pleased agreement has been reached on oil fiscal terms. “This fiscal contract provides the predictable and durable terms that are necessary to advance the gas pipeline project to the next phase.”

“We’re pleased to be taking the next step in providing Alaskans the chance to say ‘yes’ to a gas pipeline project,” said BP Exploration (Alaska) President Steve Marshall. He said the time is right for the project “and we’re ready to get started as soon as a contract is approved.”

Jim Bowles, president of ConocoPhillips Alaska, said, “Now that the complete gas contract is public, Alaskans have the opportunity to voice their support for the fiscal contract and the Alaska gas pipeline through the public process,” and said “ConocoPhillips is eager to move forward” with the project.

—Petroleum News






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