BP to review plans for Alaska after big tax increase

LONDON: BP said Thursday that it would review its 2008 business plans for Alaska after the state increased taxes for producers by $1.5 billion.

Governor Sarah Palin last week signed a bill to raise a state tax on oil companies’ profits, the second increase in two years. The bill, approved by local legislators last month, increased the levy to 25 percent from 22.5 percent.


“This massive tax increase will weaken investment in Alaska’s oil fields at the very time that more investment is needed,” Doug Suttles, the president of BP Exploration Alaska, said in e-mailed comments. “We will now review all our planned activities.”

BP, which is based in London, has been replacing corroded pipelines at the Prudhoe Bay oil field, the largest in the United States, after an oil leak in 2006. Exxon Mobil, BP and ConocoPhillips are the largest taxpayers, pumping the bulk of the more than 730,000 barrels of oil a day Alaska has produced from fields on the North Slope so far this month.

IHT