Change in oil output taxes on table in gas pipeline talks: Alaska

Anchorage (Platts)--4Nov2005

A wholesale restructuring of Alaska state taxes on oil production has
been added to the mix in negotiations with North Slope producers over the
planned $20-bil natural gas export pipeline, state officials said.

     Previously, only a change in gas output taxes was on the table, but Jim
Clark, the state's chief negotiator, said producers have asked that oil taxes
be included as part of the talks. Clark told Platts on Thursday the state
would come out better financially under the deal being discussed.

     State officials have been silent about what is being negotiated with the
producers, but the firing last week of state Natural Resources Commissioner
Tom Irwin by Gov. Frank Murkowski brought to light some issues in the talks.
In a memo circulated prior to his firing, Irwin mentioned discussions of oil
taxes.

     The particular structure of Alaska's taxes has been an issue since the
start of negotiations because of their complexity and regressive nature, which
tend to impair the economics of large, economically marginal energy projects.
Clark said what is being discussed is changing the system so that taxes are
simpler and more progressive, which helps a large project and cuts in the
state in for more revenue in the long run.

					--Tim Bradner, newsdesk@platts.com

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