November 27, 2006 --- Vol. 12, No. 82November 2006

State puts Point Thomson unit in default

Commissioner of Natural Resources Mike Menge said today that he has put the Point Thomson unit into default. The unit owners have 30 days to appeal the decision to state Superior Court.

The state has been trying to get Point Thomson, a high-pressure condensate field adjacent to the Arctic National Wildlife Refuge on the eastern side of the North Slope, developed for some 30 years.

Menge said the 106,200 acres in the unit will revert to the state: the 40,000 acres of expansion and the other 60,000-plus acres.

Gov. Frank Murkowski said he stands behind the decision and that he had spoken with the president of ExxonMobil Production Co. and briefed Gov.-elect Sarah Palin. Murkowski said the new administration will have the opportunity to tie in requirements for field development as part of the terms of any new leases, requirements for development of oil and gas liquids, as well as natural gas at the field.

The leases could be offered as early as October, but a judge could also order that the state not offer the acreage until litigation ends. Richard Todd of the Department of Law said litigation could take as long as three years. He also noted that many decisions under appeal have been settled.

Ownership in the unit includes: ExxonMobil 52 percent; BP 29 percent; Chevron 14 percent; ConocoPhillips 3 percent; and the remaining 1 percent spread among 18 other leaseholders.

Production starts at Nanuq, second Alpine satellite

ConocoPhillips and Anadarko Petroleum Corp. (78 percent, 22 percent owners, respectively) said today that production has begun from their second Alpine satellite oil field, Nanuq, three miles south of the Alpine field on Alaska’s North Slope. Production is expected to peak at some 15,000 barrels per day in 2008.

Nanuq was discovered in 2000, ConocoPhillips said in a statement, and was developed exclusively with horizontal well technology, as was the Alpine field. Both gas and water injection enhanced oil recovery will be used at Nanuq, with 19 wells planned.

Production from the first Alpine satellite, Fiord, began in August, with production from that field, some five miles north of Alpine, expected to peak at 22,500 bpd in 2008.

ConocoPhillips said construction of Nanuq and Fiord involved more than 1,400 people over the last two winter seasons. To minimize environmental impact, 50 miles of temporary ice roads constructed during the winter were used to move construction equipment, facilities, drilling rigs and drilling supplies to the satellites and to Alpine.

Production from both Nanuq and Fiord will be processed through existing Alpine facilities. Together, the two fields represent approximately $675 million in capital reinvestment.

Note: See full stories in the Dec. 3 issue of Petroleum News which will be released online ( this coming Friday.

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