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Report; Shell hoped to avoid taxes on rig

Jan. 5, 2013 at 6:02 PM

JUNEAU, Alaska, Jan. 5 (UPI) -- Officials with Royal Dutch Shell admit the company was trying to avoid $7 million in Alaska taxes by moving an oil rig to Seattle for maintenance.

The rig ran aground off the coast of Alaska. That leaves the company, which has headquarters in the Netherlands and Britain, liable for the tax as well as millions more to repair the rig and to reimburse the U.S. and Alaska governments for the cost of responding to the accident.

The company would not have had to pay equipment tax if the rig, the Kulluk, had been out of Alaska at the end of the year, The Independent, a London newspaper, said. But the grounding during a bad storm left it still in Alaskan waters on Dec. 31.

"It's fair to say that the current tax structure related to vessels of the type influenced the timing of our departure. It would have cost Shell multiple millions to keep the rigs here," a Shell spokesman said.

Another spokesman said that a "two-week window of favorable weather" in the forecast had more to do with the decision to move the rig than tax considerations.

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