Bush signs tax bill into law; major oil companies targeted

Bush signs tax bill into law; major oil companies targeted

Washington (Platts)--17May2006

President George W. Bush Wednesday signed into law legislation that
slashes US taxpayers' obligations by $70 billion, but that ups the taxes of
some of the largest oil companies.

The measure, which passed both the House and Senate earlier this month,
rolls back a tax break included in last year's energy bill that allowed oil
companies to amortize their geological and geophysical spending over two
years. Under the new law, the amortization period is pushed back to five years
for major oil companies, a move the Joint Committee on Taxation estimates will
add $160 million in revenues to the US Treasury from 2006 to 2010.

The change will affect only the largest US oil companies -- those with an
average worldwide production of crude of at least 500,000 b/d for the taxable
year, gross receipts in excess of $1 billion in the last taxable year, and an
ownership interest in a refinery of 15% or more.

--Cathy Landry, cathy_landry@platts.com

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