Current through August 30, 2024
(a) For a lessee's oil, the prevailing value
is the arithmetic average acquisition cost CIF (at the refinery inlet in the
same market in which the lessee's Alaska oil is refined) based on the sales
price of like oil sold in up to three third-party, arm's-length transactions
selected by the department, if disclosure of the sales price information is
permitted by the parties to those transactions at the time of an audit of the
lessee. In this subsection, "like oil" means an oil of substantially similar
quality produced in the same general area of the state and subject to the same
federal price controls, if any, as the oil for which the prevailing value is to
be determined.
(b) If the
information under (a) of this section may not be disclosed or is unavailable,
then the prevailing value for purposes of this chapter equals the arithmetic
average acquisition cost CIF, (at the refinery inlet in the same market in
which the lessee's Alaska oil is refined) of up to six oils selected by the
department, including
(1) up to three domestic
oils of substantially similar quality which are sold in significant quantities
in the same market or near the same market; and
(2) up to three imported oils of
substantially similar quality which are sold in significant quantities in the
same market or near the same market.
(c) The respective acquisition cost CIF at
the refinery inlet in a market for each of the oils used in this section equals
the sum of
(1) the respective official
government sales price or posted price of the oil (with adjustments for
differentials and surcharges) appearing in the latest Platt's Oilgram Price
Report published on or before the last day of the month of sale; and
(2) the respective tanker transportation cost
of the oil from its port of origin to ship's rail in the same market as that in
which the lessee's Alaska oil is refined; this cost is calculated by
(A) multiplying the London Tanker Broker's
average freight rate assessment ("AFRA") applicable to that voyage during that
month for AFRA LR 2 (Long range 2) oil tankers, by the most recently published
worldscale rate for that voyage; or
(B) applying another applicable freight rate
if foreign flag vessels are prohibited from transporting that oil;
and
(3) any canal tolls
and expenses not included in the applicable freight rate for that voyage;
and
(4) pipeline or other carrying
charges.
(d) Prevailing
value for gas is
(1) the volume-weighted
average of the prices received by the lessee in arm's-length sales transactions
which have been entered into or whose pricing provisions have been amended
during the calendar year or the two preceding years for significant quantities
at the sales delivery points within the same market for that production for
Alaska gas of like kind, character and quality produced during the month of
sale; or
(2) if the lessee makes no
arm's-length sales of significant quantities at the sales delivery points
within the same market for Alaska gas of like kind, character and quality
produced during the month, the volume-weighted average of the prices being
given and received under the terms of arm's-length sales contracts (whether
between third parties or not) which have been entered into or whose pricing
provisions have been amended during the calendar year or the two preceding
years for significant quantities of gas from the same field as the lessee's gas
(or if there are no such contracts for that field, the counterparts of those
contracts in the nearest field), with appropriate adjustments for differences
(if any) in kind, character, and quality between gas sold under the reference
sales contracts and the lessee's gas.
(e) For purposes of this section, "same
market" means
(1) with respect to a lessee's
oil refined in Alaska, the Alaska market;
(2) with respect to a lessee's oil landed on
the U.S. West Coast (including Hawaii), the West Coast market or, if
appropriate, the submarkets on the West Coast (i.e., Puget Sound, San Francisco
Bay, the Long Beach and Los Angeles area, and Hawaii);
(3) with respect to a lessee's oil landed on
the U.S. Gulf Coast, the Gulf Coast market;
(4) with respect to a lessee's oil landed on
the U.S. East Coast, the East Coast market;
(5) with respect to a lessee's oil landed in
Puerto Rico or the U.S. Virgin Islands, the Puerto Rico and Virgin Islands
market;
(6) with respect to a
lessee's gas marketed in Alaska, the Alaskan market or portion of it served by
gas from the same field or area as the lessee's gas;
(7) with respect to a lessee's gas marketed
in the continental United States, the continental United States
market;
(8) with respect to a
lessee's gas marketed in a foreign country, the market in that foreign
country.
Authority:AS
38.05.020
AS
38.05.180
