BP settles ARCO back state taxes for $36 million

Petroleum News Alaska Staff

Gov. Tony Knowles said Oct. 3 that the state and BP Exploration (Alaska) Inc. have resolved a tax case concerning outstanding corporate income tax liabilities of Atlantic Richfield Co.

ARCO was acquired by BP last year. As part of the merger, the company's Alaska assets were sold to Phillips Alaska but BP agreed to resolve ARCO’s outstanding income tax liabilities in Alaska.

The state said that the taxes relate to disputed amounts owed by ARCO under the Alaska Net Income Tax Act for tax years 1994 through 1998. Alaska tax statutes require the specific terms and conditions of the agreement to be kept confidential.

"I appreciate BP's willingness to come to the table to resolve this matter and I am pleased with the terms of this settlement," Knowles said.

BP agreed to make the payment of $36 million on Oct. 3. The funds will be deposited in the Constitutional Budget Reserve.