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Governor: Rig on way to Point Thomson ExxonMobil required to drill below conductor casing this winter to retain two leases provisionally returned by DNR’s Tom Irwin Kristen Nelson Petroleum News
Exxon is getting close to doing something it hasn’t done in Alaska in more than 15 years — drill a well. The company, which last drilled at Thetis Island in the early 1990s, will be drilling at Point Thomson this winter.
It has taken longer than the state wanted: The Department of Natural Resources has been after the company to drill more wells at Point Thomson and develop the field since the company last drilled there in the 1980s.
ExxonMobil, the operator at Point Thomson, has made and changed development plans for the field since it was unitized in the late 1970s and in 2005 under the Murkowski administration DNR’s Division of Oil and Gas declared the unit in default for lack of an acceptable plan of development.
In 2006, in the waning days of that administration, DNR terminated the unit, a decision upheld by the Palin administration, which took office in late 2006.
In response to the unit termination and subsequent revocation of Point Thomson leases — issues variously under appeal to the commissioner and Alaska Superior Court — Exxon proposed a new development plan. DNR Commissioner Tom Irwin ultimately returned two leases, subject to conditions which included completing two wells by the end of 2010.
Rig rolling When Gov. Sarah Palin said April 10 that there is “equipment rolling down the ice road today and the big rig following that equipment” on the way to Point Thomson, it meant the company was on its way to meeting that drilling commitment.
The “big rig” is Nabors 27E, modified for drilling into the high-pressure Thomson reservoir.
ExxonMobil struck a deal to share an ice road as far as Badami with Savant, which is drilling there this winter. Savant has described some 20 days of weather-driven delays on the ice road, in addition to rerouting to avoid polar bear dens (see story on page 9 of this issue).
The conditional interim decision Irwin issued in late January required ExxonMobil to “initiate drilling this winter season, including drilling a well out of the conductors with a rig capable of drilling through the Thomson Sands” as one of the conditions for the return of two of the leases at Point Thomson. While there are limits to the winter drilling season, the Division of Oil and Gas told Petroleum News that as long as ExxonMobil gets the rig to a pad prepared to support it before it loses the ice road due to melting, it can drill above the hydrocarbon-bearing zone beyond April 15.
A win for the state In her comments April 10 on the rig moving out along the ice road, Palin said it is “a win for Alaska; it’s a win for the position that we took and essentially as it’s been characterized as a hard line, with Exxon.”
Palin said the state required Exxon to abide by provisions in the leases it has held for decades.
“We expect you to follow through on development and if you don’t follow through we’re yanking your leases,” she said. “And we took a lot of heat for taking that hard line but it has paid off because we see the ice road full of equipment today.”
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