EXXON AND ALASKA SETTLE OIL ROYALTY DISPUTE

Exxon Corporation agreed Tuesday to pay Alaska $128 million to settle an oil royalty dispute that has dragged on for 14 years.

The settlement was announced as a jury was being selected in a Juneau Superior Court to hear the case.

It brings to an end one of the most complex oil and gas disputes in the state's history, and one that has been around roughly as long as the trans-Alaska pipeline has been shipping oil.

Under the terms of North Slope oil development contracts, one of every eight barrels of crude oil belongs to Alaska, as its royalty share. But for years the state has charged that the oil companies were undervaluing the royalty, and imposing excessive charges for transporting the oil from Prudhoe Bay to refineries in the lower 48 states. The effect, according to the state, was to cheat Alaska of its fair share of the oil wealth.

Over the years, the other companies settled their share of the case out of court. Exxon was the final holdout, coming to terms only when Judge Walter Carpeneti refused yet another request to delay the trial.