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Friday, 05 December, 2008, 17:10 GMT | more >>

Alaska threatens to pull leases



By Upstream staff 

Alaska's oil and gas chief has threatened to revoke leases held by a number of producers, including ExxonMobil, after they refused to drill in fields near the Arctic National Wildlife Refuge (ANWR).

Division of Oil and Gas director Mark Myers said ExxonMobil, the operator and largest leaseholder of the 106,200-acre Point Thomson unit, has made a " mockery" of its obligation to bring oil and gas from the region to market.

Fellow producers BP, Chevron and ConocoPhillips, have said that developing Point Thomson would not prove commercially viable.

The Point Thomson unit, located 30 miles (48 kilometres) east of Prudhoe Bay on ANWR's western border, holds an estimated 8 trillion cubic feet of natural gas and hundreds of millions of barrels of oil and condensed natural gas, an AP report said.

Unlike ANWR, which has been off-limits to exploration, but may be opened by Congress this autumn, the Point Thomson play has been leased in its entirety since 1977.

"We believe it's time for the field to come into that development stage, " Myers said. "It hasn't made that jump in the last 28 years."

In a decision last Friday, Myers blamed ExxonMobil, claiming that the company had no intention of bringing Point Thomson into commercial production within a reasonable time frame.

If a new development plan for Point Thomson is not submitted by the end of the year, officials say they could shut the unit down and revoke all 45 leases.

Myers says Point Thomson's individual leases call for production by 2009.

Meanwhile, ExxonMobil says developing Point Thomson is not feasible without changes in the state's tax and royalty laws. The supermajor added that a new gas pipeline from the North Slope would also need to be built.

ExxonMobil had put forward a plan suggesting annexing Point Thomson's development into the gas pipeline fiscal contract currently being negotiated with the state, and delaying drilling deadlines set in 2001 by another two years.

However, the state rejected the plan, calling it "inappropriate".

Hundreds of millions of barrels of oil and condensed natural gas could be fed from Point Thomson through the existing oil pipeline system, Myers wrote in the rejection.

An ExxonMobil spokeswoman said the producers are disappointed with the state's denial and that they disagree with the decision.

The producers say they plan to appeal.


Wednesday, 05 October, 2005, 20:00 GMT  | last updated: Thursday, 06 October, 2005, 08:44 GMT

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