While coverage of the Valdez case is getting all of the media attention, ExxonMobil Corp. has been pretty active on another front in Alaska. The oil giant wants Alaska to pay $800 million in damages, claiming the state breached an agreement when it revoked gas and oil leases on a North Slope oil field. The Irving, Texas-based company also filed a separate request for reconsideration of a gas field development proposal that was rejected by the state Resources Commissioner in April. Both filings were submitted to the Alaska Department of Natural Resources by ExxonMobil on behalf of itself and its lease partners over the revocation of Point Thomson oil and gas leases. Development of the field is considered vital to a successful natural gas pipeline project under consideration by the state. Point Thomson holds nearly one-fourth of Alaska’s 35 trillion cubic feet of natural gas reserves.
The players in this latest big-oil attack with their respective interests in the field are ExxonMobil (36%); BP PLC (32%); Chevron Corp. (25%); and ConocoPhillips (5%). A few minority owners hold the rest of the interests. Exxon initially said its claim for damages was submitted as a “precautionary matter.” About four hours later, however, the department received the request to reconsider its decision to reject the plan. I’m not sure you could call this a threat, but it sure smells like one to me. Having dealt with ExxonMobil, I can tell you that sort of thing fits their methods of operation.
ExxonMobil, BP PLC and Chevron purchased leases 31 years ago allowing them to drill at Point Thomson. Interestingly, they haven’t produced any oil or gas from the tracts. The lack of activity prompted the state to try to reclaim the leases in late 2006 and give other companies the opportunity to move forward with development at Point Thomson. But a Superior Court judge in December ordered state officials to weigh other options before stripping the leases. Two months later, Exxon submitted its 23rd development plan. The proposal involved a $1.2 billion gas recycling and condensate production project to be developed over six years. The company claimed it had already secured a drilling rig and planned to begin development this year. The Department of Natural Resources ruled the plan’s technical aspects represented a reasonable first step toward development, but lacked a commitment from the companies to ramp up production. It will be most interesting to see how this battle between Alaska and the oil giants pans out.
Source: Associated Press
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