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Exxon Mobil makes pitch to keep Alaska leases
Mon Nov 20, 2006 6:58pm ET20
By Yereth Rosen
ANCHORAGE, Alaska, Nov 20 (Reuters) - Exxon Mobil (XOM.N: Quote, Profile, Research) and other oil companies urged Alaska officials on Monday to not revoke their leases at the Point Thomson oil and gas field on the state's North Slope region despite not proceeding with any commercial development over the last three decades.
Exxon Mobil, majority owner and operator of the field, made the pitch at a hearing held by the Alaska Department of Natural Resources, part of a formal process to prevent what could be the revocation of the field leases.
A year ago, the department found Exxon Mobil and its partners to be in default of state lease terms for failing to abide by a 2001 agreement to drill development wells according to specific deadlines.
That ruling triggered a legal process to revoke the leases for the field, which lies just west of the Arctic National Wildlife Refuge and holds 8 trillion cubic feet of gas and approximately 250 million to 300 million barrels of liquids, including natural gas condensates and oil.
Richard Owen, Alaska production manager for Exxon Mobil, said Monday the company has offered alternatives to the 2001 development plan. The latest plan calls for a new well to be drilled in 2008 or 2009, the first at the field since 1983.
"The owners have complied with the unit agreement, the leases and Alaska law," said Owen, noting that Exxon Mobil and its minority partners, BP Plc (BP.L: Quote, Profile, Research), Chevron (CVX.N: Quote, Profile, Research) and ConocoPhillips (COP.N: Quote, Profile, Research), are evaluating all possible options.
The company has also offered to pay a $20 million fine, according to terms of the 2001 agreement, and give up about 20,000 acres of leases mostly around the edges of the 116,000-acre unit.
Critics said Exxon Mobil's new plan continues its pattern of stalled development and warehousing of Point Thomson's resources. Continued...
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