- 31 - Alternatively, in the year the oil field equipment and facilities were constructed and installed, Exxon claims that estimated Prudhoe Bay DRR costs should be accruable under section 162 as ordinary and necessary business expense deductions. Exxon’s Estimates of Future PBU DRR Costs Exxon’s experts have made elaborate and detailed projections with regard to future DRR activity that may be undertaken in the Prudhoe Bay field and to estimated DRR costs that may be incurred with respect thereto. In doing so, they claim that all facilities in Prudhoe Bay other than the Seawater Treatment Plant will be dismantled beginning in the year 2031 and that it will take 6 years to dismantle and remove the facilities and equipment from the North Slope of Alaska. Exxon estimates that a total of $928 million in DRR costs relating to the Prudhoe Bay oil-producing facilities will be incurred by the PBU partnership, and Exxon calculates that its share thereof will be approximately $204 million.Page: Previous 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Next
Last modified: May 25, 2011