Exxon seeks truce in fight for Point Thomson's future -
NORTH SLOPE: State wants to cancel drilling leases, but oil companies want to settle.
adn.com
By WESLEY LOY
(03/26/08 00:04:34)
JUNEAU -- Under pressure from the state to either develop or lose a rich North Slope natural gas field, oil companies led by Exxon Mobil are looking to settle the legal battle for control of the long-dormant deposit.
The companies have filed a five-page proposal in state Superior Court in Anchorage laying out a series of steps in a $1.3 billion plan to tap the Point Thomson field, which hasn't produced any oil and gas despite being discovered more than 30 years ago.
If they break their word and don't complete the steps, which run to 2013, the companies consent to a judge breaking up the Point Thomson unit -- the critical state designation binding together the field's leases.
That would greatly aid the state's effort to evict Exxon and other leaseholders.
To back up their settlement offer, top brass with Exxon, Chevron and BP have sent letters to state Natural Resources Commissioner Tom Irwin.
The development plan "has the full support of Exxon Mobil," wrote Morris Foster, president of Exxon Mobil Production Co.
"Chevron's commitment is unequivocal," added Scott Davis, a vice president with Chevron, the third-largest leaseholder in the field after Exxon and BP.
The settlement offer heightens the high-stakes drama between the oil companies and the state, which could accept the development plan or keep working in court for the right to reclaim the field outright.
State officials Tuesday declined to comment.
MURKOWSKI'S OPENING MOVE
Located next to the Arctic National Wildlife Refuge about 60 miles east of Prudhoe Bay, Point Thomson is believed to hold about a quarter of the North Slope's 35 trillion cubic feet of natural gas plus an estimated 300 million barrels of oil.
Critics including the state's lawyers have accused Exxon of "warehousing" Point Thomson's taxable treasures while concentrating on its other prospects around the world.
Exxon has cited the field's extreme subsurface pressure and the lack of a multibillion-dollar natural gas pipeline as reasons why it has gone untapped.
In 2006, then-Gov. Frank Murkowski made the opening play in what has become a tense legal chess match, moving to reclaim the more than 100,000 acres of leased state land at Point Thomson with an eye toward offering it to companies more eager to produce.
Gov. Sarah Palin, who succeeded Murkowski, has taken over the match he started.
Exxon and the other oil companies sued the state in an effort to preserve Point Thomson as a cohesive unit and hang onto the leases, which would expire if the unit is dissolved.
EXXON'S PLEDGE
Exxon made another big move last month, unveiling its $1.3 billion plan to drill five wells starting next winter and produce 10,000 barrels a day of liquid natural gas, known as condensate, by 2014.
It's the 23rd development plan Exxon has offered for Point Thomson over the years.
Exxon executives insist this one is different, saying state officials can trust the leaseholders to carry it out fully.
The proposed settlement they filed in court last week has blanks for oil company and state lawyers to sign, resolving the court case.
So, will the state take the deal?
Richard Todd, the assistant attorney general handling the state's Point Thomson defense, wouldn't comment Tuesday.
Neither would Nan Thompson, a Division of Oil and Gas official who helped preside over a recent court-ordered state hearing on Point Thomson's fate.
Thompson also wouldn't say when Irwin will issue his decision from the hearing, in which oil companies urged him to accept the latest development plan to resolve the dispute. |
