March 29, 2007 --- Vol. 13, No. 30March 2007

Exxon gets more time to file appeal

Tom Irwin, commissioner of the Alaska Department of Natural Resources, has given Point Thomson unit operator Exxon Mobil Corp. an extra 30 days to get its appeal into him on the termination of the North Slope unit’s 32 leases. Exxon was supposed to have filed its arguments on why the leases should not be terminated by March 27.

Press reports that followed Irwin’s decision were unclear, suggesting the term of the leases had been extended, which was incorrect. The extension was for filing appeal paperwork, Irwin said in a press conference March 28.

“The companies asked for an extension — not of the leases, I want to be clear on that — it’s of the appeal time to get information in, and it’s most appropriate to grant that. We want them to get all the information to us, so that I can make an informed decision.”

The State of Alaska, Irwin said, “hasn’t changed its position at all” on Point Thomson. But “it’s my obligation to make sure I review all the data and that it’s fair.”

DNR terminated the eastern North Slope Point Thomson unit last year. Exxon and other lessees have appealed that decision to the courts.

Following DNR’s decision to terminate the eastern North Slope unit, Division of Oil and Gas Director Kevin Banks went ahead and terminated the 32 core leases that were part of the unit. (Leases can be held beyond their original term by inclusion in a unit, but once the unit is terminated, lease termination automatically follows.)

The division sent out notices to lessees in February, saying the 32 leases were terminated as of March 27, 90 days from the Dec. 27 decision on reconsideration by acting DNR Commissioner Marty Rutherford, Irwin’s predecessor under the current administration. Rutherford currently serves as a deputy commissioner under Irwin.

In regard to Banks’ termination of the 32 leases within the unit, Irwin said he has received more than 100 appeals of that decision “because there are multiple owners and when you are looking at leases starting in 1965, it’s a very complex issue.”

It’s “appropriate” that the “companies have appealed the director’s decision to the commissioner,” Irwin said. It’s “what one would expect. In such a major, complex issue such as this, it’s my responsibility to make sure there’s fair evaluation in the appeal.”

Editor’s note: see full story in April 1 issue of Petroleum News, available online Friday, March 30 at noon

Petroleum News - Phone: 1-907 522-9469 - Fax: 1-907 522-9583
[email protected] ---