BP, state reach $34 million royalty settlement
BP has paid the state of Alaska an additional $34 million in royalties on North Slope oil and gas produced through 1999, Gov. Tony Knowles announced Jan. 2.
The payment concludes several audits of BP’s royalty obligations and represents 2.6 percent of the total royalties paid by BP from 1993 through 1999.
The payment was made on Dec. 29, 2000. More than $10 million of this amount, or almost 30 percent, will be deposited in the Alaska Permanent Fund, and the balance will go to the state’s general fund.
BP also paid the state $1.2 million to resolve outstanding royalty issues between the state and ARCO Alaska Inc. for the period through Dec. 31, 1999, when BP assumed Atlantic Richfield Co.’s royalty obligations as a result of the BP-ARCO merger.
The payment reflects the latest in a series of tax and royalty settlements that Alaska has negotiated to settle disputes over the past 23 years with BP and other oil lease holders in the state’s North Slope fields.
The resolutions have come more quickly in recent years, which means back interest on the payments have tended to shrink.