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Thursday, 28 August, 2008, 19:40 GMT | more prices >>

Alaska tears up Point Thomson leases



By Upstream staff 

ExxonMobil is reviewing its legal options in the wake of Alaska’s decision to strip it of leases at the Point Thomson oil and gas field in North Slope.

The state revoked the leases, saying ExxonMobil failed to come up with a viable plan for developing the field’s vast reserves.

BP, Chevron and ConocoPhillips also saw their licences for the area revoked.

The Point Thomson leases could be offered as early as the next state lease sale in October, but that could be delayed if ExxonMobil appeals.

Last year, Alaska officials ruled that Exxon Mobil was in default for delaying development by submitting a plan without any sure date for production to begin.

The state threatened to revoke the leases but stayed that decision while negotiating a contract with ExxonMobil and two other oil companies for a $25 billion natural gas pipeline that would take gas from the North Slope to Mid-western markets.

The negotiated contract fell through amid worries that Alaska would be giving away too much to the producers. That left ExxonMobil with an October deadline to update its development plan.

In a revised plan rejected by the state yesterday, ExxonMobil proposed paying Alaska $20 million and giving up 20,000 acres to settle its unmet obligations to developing the gas field. The plan included a promise to drill one well in 2009 to better map the extent of the field.

Over the last 30 years, ExxonMobil has filed 22 development plans for the 106,200 acre unit. No commercial oil or gas operations have begun in that time.

An ExxonMobil spokeswoman told the Associated Press that the company was disappointed, adding that “any litigation by the state to take back the Point Thomson leases is likely to be protracted”.

ExxonMobil has 30 days to appeal. State officials predict that litigation could take as long as three years.

Outgoing Governor Frank Murkowski said that ExxonMobil, despite being granted numerous extensions, had failed to make good on its obligations to develop the field.

Point Thomson is estimated to hold about 9 trillion cubic feet of gas reserves, more than a quarter of the known gas in all North Slope fields.

The new Alaska government, under Governor-elect Sarah Palin, will decide the next step in the case. Palin takes office on 4 December.

Tuesday, 28 November, 2006, 08:40 GMT  | last updated: Wednesday, 28 March, 2007, 10:50 GMT

Alaska woe: the state government has revoked licences for Point Thomson, which is near the North Slope (above), held by ExxonMobil, BP, Chevron and ConocoPhillips
 

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