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Vol. 12, No. 38 Week of September 23, 2007
Providing coverage of Alaska and northern Canada's oil and gas industry

No Thomson drilling

State denies Exxon’s request to drill at Point Thomson; oral arguments Oct. 5

Kristen Nelson

Petroleum News

ExxonMobil will not be drilling at Point Thomson anytime soon.

The state has denied the company’s application for a 2008-09 drilling program at acreage which was part of the former unit.

ExxonMobil, operator of the eastern North Slope unit terminated by the State of Alaska in late 2006, had applied to drill on former Point Thomson leases; an Alaska Coastal Management Program review was under way.

The Alaska Department of Natural Resources terminated the unit last year; early this year it terminated the leases. ExxonMobil and the other Point Thomson interest owners have appealed the lease terminations to DNR Commissioner Tom Irwin.

DNR earlier denied an administrative appeal of the unit termination and the companies brought suit in Alaska Superior Court. Oral arguments are scheduled for Oct. 5.

Irwin is expected to rule on the appeal of the lease determinations after the court issues its decision.

Exxon applied to drill at Point Thomson in March.

One of the agencies involved in the permitting, DNR’s Division of Oil and Gas, denied ExxonMobil’s application, citing termination of the Point Thomson unit in November and lease termination decisions issued in February.

“Since you no longer hold state oil and gas leases for the properties on which you propose to conduct lease operations, the Lease Plan of Operations Permit is denied,” Acting Division Director Kevin Banks told ExxonMobil in an Aug. 29 letter.

ACMP review terminated

Ben Greene, ACMP oil, gas and energy projects manager in DNR’s Office of Project Management and Permitting, notified Exxon that the ACMP review had been terminated.

State regulations provide that “if a resource agency denies an authorization during a consistency review,” OPMP and review participants may agree to end the review, Greene told Exxon in an Aug. 31 letter. He said OPMP received “concurrence from all review participants” that the ACMP consistency review should be terminated.

The Exxon plan included seven wells. An Exxon spokeswoman told Petroleum News in August that the drilling was planned “to maintain Point Thomson leases.”

Another administrative issue remains outstanding.

Exxon applied to the Alaska Oil and Gas Conservation Commission to order compulsory unitization at Point Thomson. The commission held a hearing July 10 at which DNR argued the commission lacked the authority to order compulsory unitization. The commission had not issued a decision Sept. 20 as this issue of Petroleum News went to print.

The appellants in the court case — Exxon Mobil Corp., BP Exploration (Alaska) Inc., Chevron U.S.A. Inc. and ConocoPhillips Alaska Inc. — submitted reply briefs Aug. 30. They told the court that the DNR commissioner lacks statutory authority to terminate the Point Thomson unit administratively and needs to take the issue to court.



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