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Chevron shocked by Pt. Thomson decision
Kristen Nelson Petroleum News
Petroleum News failed to obtain comments from Chevron, one of the major Point Thomson unit owners, to include with its coverage of the state’s decision terminating the unit which appeared in the April 27 issue.
“We are shocked and very disappointed by this decision; we believe our proposal addressed all of the state’s conditions and provided a compelling opportunity to develop the Point Thomson resources,” Scott Davis, vice president of Chevron’s Midcontinent/Alaska business unit, said in a statement April 22, the day the Alaska Department of Natural Resources issued its decision rejecting the 23rd plan of development proposed by the owners and terminating the unit.
The issue was before DNR on remand from Alaska Superior Court Judge Sharon Gleason who found the state within its rights to reject the 22nd proposed POD, but wanted DNR to hear the companies on remedies other than termination. The companies can appeal for reconsideration on DNR’s decision; DNR’s final decision is due to the court June 15.
“Unfortunately, with this decision, the state has taken a giant step backward in bringing North Slope gas to market,” Davis said.
Davis: POD met DNR’s objectives Davis said DNR, both in a briefing to the court and in communications with lessees prior to the hearing on remedies in early March, said it would require adequate delineation of all known resources, commencement of production as soon as possible and adequate assurances of performances. He said the new POD met those objectives.
Davis also said all parties, including the state, have acknowledged the field will be technically complex to develop — and economically challenged.
“DNR’s decision effectively assures continued litigation, instead of drilling, development and production,” he said. “Given the additional litigation which inevitably will follow, it is likely to be several years before the matter is resolved.”
On the issue of the credibility of the lessees, Davis took issue with DNR Commissioner Tom Irwin’s claims in the April 22 decision that he didn’t have confidence that the lessees would perform.
Davis said, “Since 2005, the lessees have been forbidden from performing any work at Point Thomson by DNR’s refusal to approve a POD and DNR’s subsequent preference for litigation.”
He also said Chevron believes Point Thomson gas is critical for an Alaska gas pipeline, and that DNR’s decision may delay the gas pipeline project.
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