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Vol. 13, No. 26 Week of June 29, 2008
Providing coverage of Alaska and northern Canada's oil and gas industry

DNR might allow Exxon to drill at Point Thomson this winter

On June 18 ExxonMobil held a meeting with officials from the Alaska Department of Natural Resources as a precursor to applying for permits for the company’s proposed drilling program at Point Thomson on the eastern North Slope.

The Point Thomson unit is in litigation following termination by DNR. Exxon said the purpose of the meeting was to explain the drilling program and get feedback from the regulators on finalizing permit applications.

Nan Thompson, petroleum manager for DNR’s Division of Oil and Gas, told Petroleum News June 19 that DNR would evaluate the permit applications and might issue some permits, depending on what activities were being permitted, what leases were involved and the status of ongoing litigation.

At the start of the meeting DNR read a statement setting out its position with regard to the meeting, Thompson said.

“The purpose of this pre-application meeting is to listen to the applicant’s presentation, learn why the permits are needed and understand which leases would be impacted by issuance of permits,” DNR told attendees. “The fact that DNR is holding this meeting should not be construed as meaning that DNR agrees with Exxon’s legal position with respect to the validity of the leases.”

Investment could be lost if state wins lawsuit

Thompson said DNR also made it clear that the state would not be responsible for any expenditure that Exxon and its partners incur as a result of any permitted drilling activities.

“If DNR issues any of the requested permits, the applicant should understand that the legal status of the leases continues to be litigated,” the statement said. “Any expenditures made by the applicant or others with respect to obtaining permits and/or conducting permitted operations will not be recoverable from DNR, nor may the consideration and/or issuance of permits be considered a waiver of DNR’s rights in any manner.”

The program that Exxon wants to permit involves drilling a total of up to nine wells, with potentially six wells on the Point Thomson unit No. 3 pad, two wells from an ice pad on the west side of the field and one well from the North Staines River No. 1 pad on the east side of the field. A disposal well in the PTU No. 3 pad may also be required at some time in the future, Exxon said.

First well this coming winter

Exxon said that it plans to drill the first well in the Point Thomson unit No. 3 pad in the 2008/-9 winter exploration season. The subsequent drilling sequence and locations would depend on drilling results, permitting and logistical considerations.

DNR permitting requirements include a land use permit, lease operations permit and an Alaska Coastal Management Program review. Permits are also required from the Alaska Department of Environmental Conservation, the Alaska Oil and Gas Conservation Commission, the U.S. Environmental Protection Agency, the U.S. Fish and Wildlife Service and the North Slope Borough.

Exxon said that it expects to submit most permit applications on or before July 1. The company is likely to submit its oil discharge prevention and contingency plan and the application for an air quality limit for the Point Thomson camp in mid July.

—Alan Bailey



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