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Gold/Mining/Energy : Alaska Natural Gas Pipeline

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From: Snowshoe	1/27/2009 10:48:41 PM
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MAJOR NEWS ALERT!!! State allows Exxon to drill Point Thomson adn.com Anchorage Daily News Published: January 27th, 2009 04:15 PM Last Modified: January 27th, 2009 04:35 PM The state has reversed itself and is allowing Exxon Mobil Corp. to drill wells this winter at the Point Thomson oil and gas field. The decision today by Tom Irwin, state natural resources commissioner, allows development of a new North Slope oil and gas field, one that some say is needed to justify construction of a multibillion-dollar natural gas pipeline. It also partly ends an escalating stand-off between the state and Exxon over whether the oil company has done enough to develop Point Thomson in the more than 30 years it has leased the state land. Irwin has been considering an appeal of a decision by Irwin's staff to deny Exxon permission to go forward with development of the oil and gas field. The staff said Exxon and its partners have failed for decades to develop Point Thomson and that it's time to take away to the leases and give them to a company that will drill wells and start production. Exxon now says it has development plan that will get Point Thomson going. And Irwin said he was persuaded by Exxon's unconditional commitment to drill two wells on two leases, completing the wells by 2010, and starting production from the wells by 2014. The resources commissioner said today he will let Exxon go ahead and build an ice road to Point Thomson so that the oil company can move a rig and other gear there and start drilling wells this winter. Irwin added that he has yet to decide the status of other 29 leases in the Point Thomson field because the proceedings on Exxon's appeal aren't completed yet. In hearings before Irwin this month, lawyers for Exxon and its partners in Point Thomson said they have a powerful rig the size of the Statue of Liberty ready to sink holes right away if only the state will grant the necessary permits. The partners include BP, Chevron and Conoco Phillips. Point Thomson lies on the Arctic coast east of the North Slope oil fields. It has a large deposit of oil but the field is especially coveted for its 7 trillion cubic feet of natural gas reserves -- the second largest reserves on the North Slope behind Prudhoe Bay's. State officials have accused the oil companies of failing to produce any oil or gas on leases dating back as far as 1965, and natural resources staff have taken steps to reclaim the state-owned land and lease it to new players. That's triggered a huge fight -- in court and within several state agencies -- for control of an asset worth tens of billions of dollars. Exxon's attorneys contend the lease cancellation was improper. They argue that seven old wells the oil companies drilled at Point Thomson, and which the state certified as "capable of producing oil or gas in paying quantities," serve to nail down their claim to the field. They also contend they're legally entitled to keep the leases so long as they're drilling or making preparations to drill.

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