State sends Tesoro unexpected, and very old, bill - February 28, 2000

Providing coverage of Alaska and northern Canada's oil and gas industryFebruary 2000

Vol. 5, No. 2

Week of February 28, 2000

State sends Tesoro unexpected, and very old, bill

Petroleum News Alaska Staff

The state Division of Oil and Gas has sent Tesoro Petroleum Co. a bill for $23.7 million, $14.2 million of which was interest, saying the company underpaid for state royalty oil purchased back in 1984 and 1985 and pertains to Cook Inlet oil received by the state in lieu of cash royalties.

Kenneth Boyd, director of the oil and gas division, said Feb. 17 that the underpayment was recently revealed by a state audit. Tesoro was asked to pay the balance by early February or make arrangements for payments over time. Boyd said so far Tesoro has done neither.

Steve Ricks, president of Tesoro Alaska Petroleum Corp., said news of the alleged underpayments caught the company by surprise. He also challenged how the state has tabulated the bill.

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