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NEWS BULLETIN

December 31, 2010 --- Vol. 16, No. 123December 2010

BP ordered to shut down production from small Raven oil pool

Federal authorities have ordered BP to halt production from its small Raven oil pool on Alaska’s North Slope due to a continuing lease dispute with a Native family.

The Bureau of Indian Affairs, which oversees Native land holdings, told BP in a Dec. 29 letter that the company must cease production from Raven “as expeditiously as possible” or face cancellation of its BIA lease on the Oenga family allotment.

The 40-acre allotment is on Heald Point, a finger of land extending into the Beaufort Sea just east of Prudhoe Bay.

The BIA says it is implementing a Nov. 22 federal court ruling that continued production from what’s known as the Raven participating area violates the lease.

Oenga family members contend the oil company has underpaid them for using the Heald Point land to produce billions of dollars worth of oil. BP operates a drill site on the Oenga allotment.

BP previously was forced to halt some production from its Lisburne oil pool because of the legal dispute with the Oenga family.

The BIA letter says lawyers for BP asked to continue using the allotment for Raven production while it appeals the Nov. 22 court ruling. But the BIA and the Oenga family rejected that idea.

The family is pursuing “a global settlement and renegotiation of the lease,” the BIA letter indicates.

Family members and their lawyer contend BP and its partners wrongfully took advantage of the allotment, expanding operations to tap not only the Niakuk field but other oil pools such as Raven not covered under the 1989 lease. They argue the family has been shortchanged by tens of millions of dollars over the years.

Raven is a very small contributor to overall North Slope production. In November, the Raven oil pool produced 25,456 barrels of oil, state figures show.

BP spokesman Steve Rinehart told Petroleum News in a Dec. 31 e-mail that the company is reviewing the BIA directive and will shut in the Raven wells, two producers and one injector, within the “allowed timeframe.”

Rinehart said the decision allows continued maintenance and safety work. Production from Niakuk will continue, he said.

See more in Jan. 9 issue of Petroleum News, available to subscribers online at www.PetroleumNews.com by 11 a.m. Friday, Jan. 7

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