BP, state of Alaska settle back taxes for $416 million

Petroleum News Alaska Staff

Gov. Tony Knowles said April 10 that the state of Alaska and BP Exploration (Alaska) Inc. have resolved several outstanding tax issues for $416 million.

“I am very pleased with this settlement and appreciate BP’s willingness to come tot he table to reach a satisfactory agreement,” Knowles said. “I also appreciate the hard work of the employees with the Departments of Law and Revenue who spent many hours, days and weeks analyzing the issues and engaged in extensive and exhaustive discussions with BP before reaching this settlement.”

Alaska tax statutes require the specific terms and conditions of the agreement to be kept confidential.

Revenue Commissioner Wilson Condon said April 11 that the $416 million settlement was the last of the big settlements. There are, he said, no more tax and royalty disputes in excess of $50 million.

The taxes relate to disputed amounts owed by BP Exploration (Alaska) under the Alaska Net Income Tax Act for tax years 1991 through 1996. BP Exploration (Alaska) issued a payment of $416,250,684.93 April 10.

All of the payment will be deposited in the state’s Constitutional Budget Reserve fund.