Alaska's oil tax structure reform proposals in the existing system is a huge step forward, it should attract more investment, but it also has some place, industry representatives told the House Resources Committee (Tuesday).
Dan Seckers tax adviser for ExxonMobil, said SB21 Alaska more competitive - an adviser to the Legislature and Gov. Sean Parnell's government has been emphasizing the point - it should attract more investment. But he said he "loves" Alaska to become more attractive, which will be under the recommendations.
The Commission is of SB21, its purpose is in Alaska more competitive investment funds and increasing oil production. North Slope's major players - British Petroleum (BP PLC), ConocoPhillips and Exxon Mobil (Exxon Mobil) - testified Tuesday evening. The Committee plans to hear from Wednesday's smaller producers and explorers.
Committee co-chair Eric Feige said he hoped to promote a bill sometime next week. Then the bill to the Finance Committee of the House of Representatives. Legislature will adjourn on April 14.
Alaska relies heavily on oil revenues to run. Production has been declining since the late 1980s, but the price is high, to help cover up the impact of the decline in recent years.
Testimony beyond the the conversation whether SB21 would make Alaska more competitive, whether Alaska attractive enough to draw the country want to see what kind of investment.
BP Alaska's chief financial officer, Bilbao, Damian said the bill will allow Alaska "game", but with other industry representatives agreed to modify the bill would reduce the uncertainty of the company to make it better.
The existing Alaska oil tax structure in 2007, with 25% of the base rate and a progressive surcharge triggered when a company's production tax value reaches $ 30 a barrel. When it is through our thoughts, the state will help the tax credit on the front-end and back-end and share the profits of things, such as when the flow of oil, the price is high.
The company has said that the surcharge to eat too much - credited to help fatten the state treasury in recent years - into their profits when prices are high, deter new investment. Alaska Revenue Commissioner said he did not see evidence that tax incentives for oil companies, in order to - it may be next year more than 100 million US dollars - has led to increased production.
The SB21, narrowly passed the Senate last week, eliminating the objectives of the reform of the surcharge to focus on encouraging the production tax credit Suite. The latest version of the bill will increase the base income tax rate to 35%, providing a $ 5 credit for each taxable barrel of oil production and 20% of the tax break, known as a total revenue excluded, the new oil areas and new refined oil from traditional areas, long-term pillar of the Alaska oil industry.
Seckers and representatives of ConocoPhillips, said the bill is now in improving. But they, the SB21-year-old tax rate is too high, what oil qualify for exclude from gross income, the problem also made Bilbao, they want clearer. The Seckers also questioned whether the allowance of $ 5 a barrel, enough to balance the other provisions of the bill, such as the base tax rate.
ConocoPhillips Alaska, Bob Heinrich, vice president of finance, said the lower oil prices will be a tax increase proposal. Due to the the Alaska high cost environment, he said, the bill does not not go far enough to improve the overall competitiveness of Alaska.
 



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