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May 09, 2011 --- Vol. 17, No. 41May 2011

Point Thomson case springs back to life as state files hefty legal brief

Court proceedings have resumed in the struggle for control of Alaska’s undeveloped Point Thomson oil and gas field.

But this doesn’t mean months of negotiations between the state and ExxonMobil to try to reach an out-of-court settlement have failed, said a spokeswoman for the Alaska Department of Natural Resources.

The court case, which concerns DNR’s effort to dissolve the Point Thomson unit, currently rests before the Alaska Supreme Court.

Although the high court took the state’s appeal nearly a year ago, the case didn’t advance as DNR and ExxonMobil requested multiple delays in the proceedings to concentrate on settlement talks. In periodic court filings, the two sides said progress was being made toward resolving the complex issues involved.

Recently, however, the court signaled resistance to granting any further timeouts, and on May 5 the state filed its opening brief.

The 102-page document lays out the state’s appeal of a Jan. 11, 2010, lower court decision that reversed former DNR Commissioner Tom Irwin’s termination of the Point Thomson unit.

Point Thomson is a rich oil and gas field along the Beaufort Sea coastline just west of the Arctic National Wildlife Refuge. Aside from operator ExxonMobil, major stakeholders include BP, Chevron and ConocoPhillips.

The DNR in recent years moved to break up the unit and invalidate leases at Point Thomson on grounds that ExxonMobil and its partners have failed to develop the field for more than 30 years.

The oil companies went to court to try to preserve the unit.

DNR spokeswoman Elizabeth Bluemink told Petroleum News that “settlement negotiations are ongoing,” despite the resumption of proceedings in the court case.

Now that the state has filed its opening brief, lawyers for ExxonMobil will have a chance to reply.

See more in May 15 issue, available online at 11 a.m., Friday, May 13 at www.PetroleumNews.com

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