The Department of Natural Resources has responded to a June 1 request that BP Exploration (Alaska) be approved to replace Phillips Alaska Inc. as operator of the Prudhoe Bay unit eastern operating area by requiring annual operating plans for the initial oil rim and gas cap participating areas at Prudhoe, something the Prudhoe Bay oil and gas lease owners have refused to give the state in the past.

The decision, signed June 27 by Ken Boyd, director of the DNR Division of Oil and Gas, also requires submittal of annual reservoir development objectives and field development plans compiled by the Prudhoe Bay owners as part of the Prudhoe Bay unit operating agreement -- and plans approved by the Prudhoe Bay producers from 1995 through 1999.

The state also wants an application by Oct. 1 for modification of the Prudhoe Bay unit agreement to provide for a single unit operator. Boyd noted in the decision that the operators have informed the state that applications for cross-assignment of leases -- necessary to align lease interests -- will not be filed until the deadline established by the regulations, July 11.

The first annual plan of development for the Prudhoe Bay unit oil rim and gas cap participating areas -- collectively the Permo-Triassic reservoir -- is due Sept. 15. Furthermore, Boyd said in the decision, after Jan. 1, 2001, "the Prudhoe Bay Unit operator shall not develop or produce from the Permo-Triassic Reservoir except in accordance with a current plan of development approved by the Commissioner."