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Chevron, Marathon continue Spurr fight Judge rules case over who must pay to retire old Cook Inlet platform should proceed in state court, not federal; trial set for 2011 Wesley Loy For Petroleum News
A legal fight over who will pay to decommission the Spurr platform in Alaska’s Cook Inlet has been booted out of federal court in Anchorage. But that doesn’t mean the conflict is over.
Chevron, through its subsidiary Unocal, is suing Marathon and the State of Alaska, seeking a judgment that it “has no current liability for costs to decommission and abandon the Spurr facilities.”
Chevron initially filed its suit in state Superior Court, and Marathon attempted to transfer it to the federal court.
But U.S. District Court Judge Ralph Beistline has rejected that attempt and in a judgment entered Jan. 7 he ordered the case back to the Superior Court.
Origins of conflict The Spurr platform is old and hasn’t produced oil since 1992. Superior Oil and Texaco installed it around 1968.
Marathon has been Spurr operator since 1988, and in recent years has taken steps toward abandoning the platform and its shut-in wells.
Questions about who will cover the decommissioning costs arose last year during the Delaware bankruptcy case of Pacific Energy Resources Ltd., which held a 50 percent stake in the platform with Marathon holding the other 50 percent.
In court filings, Pacific Energy said total decommissioning costs were projected to run between $21 million and $35 million.
In connection with the bankruptcy proceeding, Marathon filed an action in June 2009 arguing that past owners in Spurr, including Chevron, “may have proportionate responsibility to the State of Alaska” for decommissioning the platform.
Since then, lawyers for the companies have wrangled about which court has jurisdiction over the matter — the bankruptcy court, the Alaska courts, or the U.S. District Court.
Now it appears settled that the conflict will play out in the Alaska courts.
Chevron and Marathon are two of the biggest oil industry players operating in the Cook Inlet basin.
Since Judge Beistline’s judgment, Marathon has answered Chevron’s lawsuit and filed a counterclaim.
On Jan. 29, Superior Court Judge Sharon Gleason set a non-jury trial date of Jan. 24, 2011, in Anchorage.
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