State, Exxon working on settlement over Point Thomson
alaskajournal.com
By Tim Bradner
Alaska Journal of Commerce
Publication Date: 10/16/08
Settlement negotiations are underway to resolve a contentious lawsuit between the state of Alaska and leaseholders at the Point Thomson gas field on Alaska’s North Slope. Documents on the status of settlement talks were filed with an Alaska Superior Court judge late Wednesday.
Two meetings have been held and a third is underway today, state attorneys said in the statement filed for the Department of Natural Resources.
Superior Court Judge Sharon Gleason ordered the state and ExxonMobil Corp., operator of the Point Thomson unit, to submit a status report on negotiations by Oct. 15.
The state is attempting to cancel leases held by ExxonMobil and other companies, including BP, Chevron and ConocoPhillips, in a dispute over past work obligations. The companies sued to stop the lease cancellation action. The case is in Gleason’s court.
Point Thomson, 60 miles east of the Prudhoe Bay field, holds an estimated 8 trillion cubic feet of gas, 200 million barrels of condensates and undetermined quantities of crude oil. The gas reserves in the field are a key part of the 35 trillion cubic feet of North Slope gas reserves needed for a proposed $30 billion-plus Alaska gas pipeline, the companies have said.
The state contends ExxonMobil and its partners reneged on drilling obligations in the field made in 2001. The companies have responded with a proposed $1.3 billion gas cycling and condensate production plan as a remedy to the dispute, but the state rejected the plan earlier this year as insufficient.
ExxonMobil has actually started work on the project so that drilling can begin this winter, gambling that a settlement with the state can be achieved.
In its Oct. 15 filing to Gleason, ExxonMobil asked the court to appoint mediators and to supervise the settlement negotiations but the state, in its filing, objected to the proposal.
“It is premature for the court to appoint a mediator because the parties are engaged in ongoing discussions. The parties’ efforts are better focused on the current process. Devoting time to selecting a mediator would divert resources from the discussions already underway,” state attorneys said in the filing.
Nan Thompson, a state DNR official who is managing Point Thomson issues, said the state has issued permits to ExxonMobil to do surface preparation at the Point Thomson field, but that permits for subsurface drilling would require resolution of the outstanding issues.
To begin drilling in January, the companies must build a 60-mile ice road from Prudhoe Bay to Point Thomson in November and December so that a drill rig can be moved to the field. |
