NEWS BULLETIN

May 28, 2010 --- Vol. 16, No. 47May 2010

Alaska Supreme Court steps into Point Thomson fight

The Alaska Supreme Court today granted the state’s request for a review of an unfavorable lower court decision in the battle for control of the Point Thomson oil and gas field on Alaska’s North Slope.

The state Department of Natural Resources had petitioned the high court on Feb. 5 to review the Jan. 11 ruling from state Superior Court Judge Sharon Gleason.

The petition was somewhat unusual, because the Superior Court case is not yet over.

Today the Supreme Court entered a brief order saying simply that the state’s petition for review is granted.

The state has been locked in a court battle with ExxonMobil and other major Point Thomson leaseholders over an undeveloped field worth tens of billions of dollars. The state is frustrated the oil companies for decades have failed to develop the field on state acreage some 60 miles east of Prudhoe Bay.

In a ruling that came as a heavy blow to state officials, Gleason overturned DNR Commissioner Tom Irwin’s termination of the Point Thomson unit and held that the companies were wrongly denied an administrative hearing under a key section of the unit agreement.

Attorneys for DNR, in seeking a review, told the Supreme Court they believed Gleason erred when she reversed Irwin’s termination. They also said her ruling would needlessly force a very long, technical and expensive hearing under the unit agreement.

ExxonMobil urged the Supreme Court not to get involved in the middle of the case.

The company operates Point Thomson and, with Irwin’s permission, is now working to complete two wells for a promised gas condensate project. Other working interest owners include BP, Chevron and ConocoPhillips.

Alaska Oil and Gas Director Kevin Banks told Petroleum News he was pleased with the Supreme Court action.

“This changes the momentum,” he said, but noted no one in DNR is ready to proclaim victory in the case.

Editor’s note: See story in the June 6 issue, available online to subscribers at noon Alaska time on Friday, June 4.


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