Certainty Portion of Gas Pipeline Contract
May 25, 2006
"This puts into contract form the agreement we reached with the producers' CEOs last February," Murkowski said. "At that time we announced the completion of the gas pipeline portion of the draft contract, as well as their agreement to pay a new net profits severance tax rate of 20 percent to replace the ELF. Completion of the oil fiscal certainty portion of the contract formalizes that agreement."
"I am pleased with the completion of these negotiations, and very optimistic about the gas pipeline contract going forward," Murkowski said. "This gas pipeline does many wonderful things for Alaska it allows us to monetize our tremendous gas resource on the North Slope. It will bring thousands of jobs and economic opportunities to Alaskans. As it delivers gas to the Midwest, it will deliver more than $100 billion to Alaska over its first 35 years. It will add 20 years to the life of the oil pipeline. The gas pipeline truly is our second 'Prudhoe Bay.'
"This oil fiscal certainty piece adds another 100 pages to the contract, making the draft contract, the draft fiscal interest finding, and addenda well over 1,000 pages. We have plugged in our 20 percent number for the tax rate, which we know the industry has accepted."
"ExxonMobil is pleased that we have reached agreement with the administration on a contract that includes oil fiscal provisions," said Richard Owen, vice president of ExxonMobil Alaska Production Inc. "This fiscal contract provides the predictable and durable terms that are necessary to advance the gas pipeline project to the next phase."
"We're pleased to be taking the next step in providing Alaskans the chance to say 'Yes' to a gas pipeline project," said Steve Marshall, president, BP Exploration (Alaska Inc.). "The time is right to advance this project and we're ready to get started as soon as a contract is approved."
"Now that the complete gas contract is public, Alaskans have the opportunity to voice their support for the fiscal contract and the Alaska gas pipeline through the public process," said Jim Bowles, president of ConocoPhillips Alaska. "This is an important step toward approval of the contract by the Alaska Legislature. This project will provide jobs and state revenues for Alaska and a long-term source of clean energy to American consumers. ConocoPhillips is eager to move forward with the gas pipeline project development [after the Legislature approves the contract]."
Murkowski urged the House to support the completed contract reached today, by maintaining the 20/20 approach for the PPT when it returns to Juneau after the Memorial Day recess. The governor said the greatest risk to Alaska is not going forward with the gas pipeline deal.
He also noted that the head of BP, Lord John Browne, had affirmed in a Monday article in the Wall Street Journal that the producers will significantly increase investment in Alaska if the gas pipeline contract is approved. Lord Browne was quoted as saying BP would increase its investment in Alaska from a current level of $600 million a year to $1.5 billion over a ten-year period if the gas pipeline is approved.
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