(A) IN
GENERAL.—The term ‘‘layer ad-
justment amount’’ means, with respect to any 
historic LIFO layer, the product of— 
(i) $18.75, and 
(ii) the number of barrels of crude oil 
(or in the case of natural gas or other pe-
troleum products, the number of barrel-of- 
oil equivalents) represented by the layer. 
(B) BARREL-OF-OIL
EQUIVALENT.—The 
term ‘‘barrel-of-oil equivalent’’ has the meaning 
given such term by section 29(d)(5) (as in ef-
fect before its redesignation by the Energy Tax 
Incentives Act of 2005). 
(3) APPLICATION OF REQUIREMENT.— 
(A) NO CHANGE IN METHOD OF ACCOUNT-
ING.—Any adjustment required by this section 
shall not be treated as a change in method of 
accounting. 
(B) 
UNDERPAYMENTS
OF
ESTIMATED 
TAX.—No addition to the tax shall be made 
under section 6655 of the Internal Revenue 
Code of 1986 (relating to failure by corporation 
to pay estimated tax) with respect to any un-
derpayment of an installment required to be 
paid with respect to the taxable year described 
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in subsection (a) to the extent such under-
payment was created or increased by this sec-
tion. 
(4) APPLICABLE INTEGRATED OIL COMPANY.— 
For purposes of this subsection, the term ‘‘applica-
ble integrated oil company’’ means an integrated oil 
company (as defined in section 291(b)(4) of the In-
ternal Revenue Code of 1986) which has an average 
daily worldwide production of crude oil of at least 
500,000 barrels for the taxable year and which had 
gross receipts in excess of $1,000,000,000 for its 
last taxable year ending during calendar year 2005. 
For purposes of this subsection all persons treated 
as a single employer under subsections (a) and (b) 
of section 52 of the Internal Revenue Code of 1986 
shall be treated as 1 person and, in the case of a 
short 
taxable 
year, 
the 
rule 
under 
section 
448(c)(3)(B) shall apply. 
(b) ELIMINATION OF AMORTIZATION OF GEOLOGICAL 
AND GEOPHYSICAL EXPENDITURES FOR MAJOR INTE-
GRATED OIL COMPANIES.— 
(1) IN GENERAL.—Section 167(h) of the Inter-
nal Revenue Code of 1986 is amended by adding at 
the end the following new paragraph: 
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‘‘(5) NONAPPLICATION TO MAJOR INTEGRATED 
OIL
COMPANIES.—This subsection shall not apply 
with respect to any expenses paid or incurred for 
any taxable year by any integrated oil company (as 
defined in section 291(b)(4)) which has an average 
daily worldwide production of crude oil of at least 
500,000 barrels for such taxable year.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this section shall take effect as if included in the 
amendment made by section 1329(a) of the Energy 
Policy Act of 2005. 
(c) MODIFICATIONS
OF
FOREIGN
TAX
CREDIT 
RULES APPLICABLE TO LARGE INTEGRATED OIL COMPA-
NIES WHICH ARE DUAL CAPACITY TAXPAYERS.— 
(1) IN GENERAL.—Section 901 of the Internal 
Revenue Code of 1986 (relating to credit for taxes 
of foreign countries and of possessions of the United 
States) is amended by redesignating subsection (m) 
as subsection (n), and by inserting after subsection 
(l) the following new subsection: 
‘‘(m) SPECIAL RULES RELATING TO LARGE INTE-
GRATED OIL COMPANIES WHICH ARE DUAL CAPACITY 
TAXPAYERS.— 
‘‘(1) GENERAL
RULE.—Notwithstanding any 
other provision of this chapter, any amount paid or 
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