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BP pays $379m to settle Alaska tax liabilities

22 July 2008

BP has agreed to pay Alaska $379m to settle a dispute over its corporate income tax liabilities for 2000-02.
Sarah Palin said BP, had agreed on December 31 2007 to pay the money. "I am very pleased with this settlement and appreciate BP's willingness to work with the state of Alaska and come to a fair resolution."
BP confirmed the details of the settlement and was glad the matter was resolved.

The payment, on behalf of the BP Exploration (Alaska) subsidiary, is another hit to BP, who despite having already paid $20m in fines, is still being investigated following the oil spill in Prudhoe Bay in 2006.
Just before Christmas, Ms Palin signed into law a proposed tax increase on the oil industry, boosting the rate from 22.5% to 25% of the net value of oil.

The increase, which is expected to raise the industry's tax bill by $1.5bn in 2008, led BP to say it was reviewing its investment plans in Alaska.

Doug Suttles, president of BP Exploration (Alaska), said the tax hike disappointed him. "This will impact our business plans in 2008."

On December 26, an Alaska superior court judge ruled that BP, ExxonMobil and other oil companies could have their leases for Point Thomson, a gas and condensate field, revoked by the state because they had taken too long to develop it.

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