Competitive Framework for Alaska: 2012

Terms for Ultra Heavy Oil Proposed Terms It is very important for Alaska to upgrade ultra heavy oil. This would create additional value added in the State and would make the operations of the oil line much easier. It can therefore be suggested that producers are given the option to have a "feed price" into the upgrader for ultra-heavy oil which would be equal to 65% of the value of the synthetic oil that would be produced. The feed price would be the basis for royalties and PPT. It would allow companies to only pay corporate income tax on the upgrader, since this is in fact a mid-stream type operation. This same concept is applied in Alberta for oil sands or refineries in Alaska. 92

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