Exxon Mobil reconsiders Alaska projects
Dec. 27, 2007, 10:47PM
chron.com
Exxon Mobil Corp. said Thursday that it may reduce investment in Alaskan oil projects after the third-largest source of domestic crude raised taxes on oil industry profits.
Irving-based Exxon Mobil, BP, ConocoPhillips and others that pump oil in Alaska will pay about $1.5 billion more in taxes annually after Gov. Sarah Palin last week signed the increase into law. The measure raised the levy on oil profits to 25 percent from 22.5 percent.
Before the increase, oil companies had been expected to boost spending in Alaska and other parts of the U.S. by 6.5 percent in 2008 to almost $87 billion, said a team of Citi Investment Research analysts led by Geoff Kieburtz. Alaska accounts for 31 percent of Exxon Mobil's U.S. crude output.
"The tax increase that Gov. Palin has signed into law reduces the attractiveness of future oil developments in Alaska," Kimberly Brasington, a spokeswoman for Exxon Mobil, said Thursday in an e-mail. "We are re-evaluating investment plans."
Exxon Mobil's comments follow London-based BP's announcement earlier Thursday that it will review spending plans for the state in light of the tax increase. Doug Suttles, president of BP's Alaskan exploration business, called the boost "massive."
Also, Exxon Mobil, BP and others may have their leases for an Alaska oil and natural gas field revoked by the state because they took too long to develop it, a judge ruled, according to a government petroleum manager.
Alaska Superior Court Judge Sharon Gleason ruled Wednesday that the companies, which have held the leases since the 1970s for Point Thompson, failed to comply with a state agreement to bring the field into production, said Nan Thompson at the Alaska Department of Natural Resources. |
