|
BP Alaska forced to shut-in Raven wells Small field on North Slope caught up in protracted land dispute with Native family; company says production impact is ‘minor’ Wesley Loy For Petroleum News
BP plans to shut-in wells tapping the small Raven oil pool on the North Slope due to a continuing lease dispute with an Alaska Native family.
The action comes after the federal Bureau of Indian Affairs, which oversees Native land holdings, told BP in a Dec. 29 letter it had to 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 said it was implementing a Nov. 22 ruling from the U.S. Court of Federal Claims in Washington, D.C. The court has been weighing the Oenga matter for several years.
How it started The dispute has its roots in a lease Andrew Oenga signed with BP in 1989 on his Heald Point allotment.
Oenga had secured the homestead allotment many years earlier as a good place to hunt seals for subsistence.
He would die the year following the lease signing, and interest in the allotment was divided among several heirs according to his last will and testament.
Heald Point had considerable strategic importance for BP, which saw the placement of a drill site on the allotment as the cheapest alternative for developing the offshore Niakuk oil field to the north.
That the lease gave BP the right to operate a production facility on the allotment is not in dispute. Rather, the issue is the scope of permissible activities under the lease.
The case pits the Oengas against the U.S. government, which is accused of violating its trust responsibility, with working interest owners BP, ConocoPhillips, ExxonMobil, Chevron and Forest Oil involved as defendant intervenors.
The court held a trial over the course of eight days in July 2010, resulting in a 168-page opinion from Judge Nancy Firestone. It is the court’s third opinion since 2008 on aspects of the complex case.
The judge agreed with the family that the scope of the lease was limited to Niakuk, and did not give BP the right to use the allotment to tap other accumulations such as Raven.
Firestone also ruled the family was entitled to greater rent for use of the property. She said she would make a final determination later on the exact amount of damages.
The family’s lawyer, Ray Givens, said the Oengas are owed “roughly $15 million for damages, rent and interest for all aspects of this case,” parts of which are pending in other forums such as the Interior Board of Indian Appeals.
The court ruling noted the family has received about $2.1 million in rental payments from BP over the past 22 years.
Raven impact Joe Delia, Andrew Oenga’s grandson, said in a statement: “For years we knew BP was taking advantage of us, and that the BIA was letting them get away with it.”
The family is pursuing “a global settlement and renegotiation of the lease,” the BIA letter said.
The BIA letter also said BP’s lawyers asked to continue production from Raven pending an appeal of the Firestone ruling. But the BIA and the Oenga family rejected that idea.
BP Alaska spokesman Steve Rinehart said in a Dec. 31 e-mail to Petroleum News: “We are reviewing the BIA directive to determine the course forward.”
For now, the company will shut-in the Raven wells — two producers and an injector, Rinehart said.
The BIA decision “allows continued maintenance and safety work,” he said.
Production impact will be “minor,” he added, with Niakuk production to continue.
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 previously was forced to halt some production from the Lisburne oil pool because of the Heald Point legal dispute.
| 