BP to pay state $25.3 million to settle tax dispute

Posted: Friday, July 07, 2000

ANCHORAGE (AP) -- BP Amoco PLC will pay the state about $25.3 million to settle oil-tax issues arising in a recent audit, the state Department of Revenue said Thursday.

The settlement covers back tax claims and interest on BP's North Slope oil production in the years 1996 and 1997 from the Prudhoe Bay, Kuparuk, Endicott and Milne Point oil fields.

By state law, the details of the dispute and the agreement were not disclosed.

The state audits oil producers two years at a time. Dan Dickinson, who heads Revenue's tax division, said the audit for 1998 and 1999 is just getting under way.

Some of the issues in the developing audit will be similar to those raised in the one just settled.

''Hopefully we resolve them once and they carry over (to subsequent years),'' he said.

Dickinson said negotiations with BP carried on for several months before intensifying to daily discussions last month.

Carla Beam, a BP spokeswoman in Anchorage, praised the outcome.

''This is a good, fair agreement,'' she said, adding that the audit and settlement process is ''part of the normal course of business.''

Dickinson said BP will electronically transfer the money to the state by the end of the week.

All of the payment goes into the Constitutional Budget Reserve, the account the Legislature uses to fill the gap between state spending and general revenue. The reserve currently contains $2.6 billion.

Earlier this year BP paid $416 million to settle a corporate income tax dispute with the state for 1991 through 1996.

The 1996-97 audit for Atlantic Richfield Co.'s North Slope production is still in progress, Dickinson said.

Because Arco no longer exists, he and Beam said, liability for Arco back taxes and interest falls to BP, which bought the company earlier this year. BP sold Arco's Alaska assets to Phillips Petroleum Co.



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