NEWS BULLETIN

February 15, 2002 --- Vol. 8, No. 21February 2002

Exxon, BP say press report misleading; nothing new regarding gas pipeline

A British newspaper received a call from BP yesterday “to make it clear” that a North Slope gas pipeline project “is not on the shelf,” BP Exploration (Alaska) Inc. spokesman Ronnie Chappell told PNA today.

The call followed an article in the newspaper about a presentation BP’s top executives made to analysts Feb. 14. The article’s headline said BP was ready to shelve the North Slope gas commercialization project.

“It seemed to me that the headline really didn’t reflect what John Browne said. Nowhere did he say BP was shutting down the project,” ExxonMobil spokesman Bob Davis told PNA. “He said the project was uneconomic but that’s been said before.

“In my view, the headline was more sensational than the body of the article,” Davis said, pointing out the fact that headlines are generally written by someone other than the author.

John Browne, BP Plc’s CEO, did tell analysts that the $15 billion to $17 billion project was not yet economic; something the big three North Slope gas owners have been saying for more than a year.

Dick Olver, head of upstream operations for BP Plc, told analysts that BP did not see a gas pipeline transporting North Slope gas to Lower 48 markets until 2008, but “perfectly likely in 2009 and it could be 2010.”

Proponents of the pipeline have targeted 2007 as the mostly likely start-up date for gas to flow, but Chappell said, “The stars would have had to line up and everything be perfect to achieve 2007.

“They were talking 2007 a year ago. This is a year later and we still don’t have an economic project. …

“I guess I don’t understand what the hubbub is about. We have been telling people that the project is not competitive. We have also been telling them we don’t think the project is competitive — yet. … “We’re pushing to develop a competitive project. We’re not there yet,” Chappell said.

“We have two criteria for this project to move forward: It has to be economic and everybody has to support it,” he said, saying the next step was getting enabling legislation passed in Washington, D.C.


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