Prudhoe trust collects $29.5M from BPXA
The BP Prudhoe Bay Royalty Trust has collected nearly $29.5 million from BP Exploration (Alaska) Inc. to settle claims stemming from the 2006 pipeline spills in the Prudhoe Bay oil field on Alaska’s North Slope.
The royalty trust, which is publicly traded on the New York Stock Exchange, reported it had received the funds from an escrow account on Dec. 24. The trust and BPXA had reached a settlement agreement on May 8, 2009.
The settlement resolves issues related to the temporary shutdown of Prudhoe following oil spills in March and August of 2006, possibly reducing royalty payments to the trust in 2006, 2007 and 2008, a trust press release said.
The settlement does not release BPXA from claims for reduced royalty payments in 2009 or any subsequent year, the trust said.
Created in 1989, the BP Prudhoe Bay Royalty Trust holds an overriding royalty interest that entitles the trust to a royalty on 16.4 percent of the first 90,000 barrels of the average daily net production of crude oil and condensate per quarter from BPXA’s working interest in the field.
The Bank of New York Mellon acts as trustee for the royalty trust.
Leaks caused shut-insThe corrosion-related leaks from major Prudhoe sales lines partially shut down the nation’s largest oil field and led to subsequent field disruption as BPXA tested and replaced pipes.
Ultimately, BPXA pled guilty to a federal pollution misdemeanor amid accusations from prosecutors, pipeline regulators and members of Congress that BP was negligent in its maintenance of the pipes.
The royalty trust wasn’t alone in pursuing financial claims against BPXA.
The State of Alaska is pressing a civil lawsuit in Alaska Superior Court seeking potentially $1 billion or more in lost revenue to the state treasury and the Alaska Permanent Fund as a result of the leaks and ensuing production shut-ins.
BPXA operates Prudhoe on behalf of itself and other owners ConocoPhillips, ExxonMobil and Chevron.