May 25, 2007 --- Vol. 13, No. 49May 2007

Exxon applies to AOGCC for Point Thomson sand unit

The Alaska Oil and Gas Conservation Commission has scheduled a July 10 hearing to consider a petition from Exxon Mobil Corp. for approval of a Point Thomson sand unit. The commission said Exxon is seeking to unitize all or a portion of the oil and gas leases which have been part of a unit agreement with the Alaska Department of Natural Resources dating from 1977. That unit agreement was terminated by DNR last year.

The commission said the petition was filed April 16 and noted that there are legal proceedings on both the unit termination and the termination of leases within the unit.

AOGCC said that given the ongoing judicial and administrative proceedings, its hearing will focus on whether the petition “should be stayed or held in abeyance pending resolution of these other proceedings.”

Oil and gas units in Alaska are typically formed under the authority DNR but AOGCC also has authority to approve units to prevent waste, ensure maximum recovery and protect the rights of all affected leaseholders.

Clarification on Point Thomson procedural motions and lawsuit

In the May 27 issue of Petroleum News that is being released online ( today at noon Alaska time, there is a story about yet another judicial ruling on the Point Thomson unit.

The article is about a May 22 decision by Alaska Superior Court Judge Sharon Gleason denying procedural motions from former Point Thomson leaseholders that would have effectively delayed the court’s hearing of the main Point Thomson lawsuit. (ExxonMobil, BP, Chevron and ConocoPhillips filed the lawsuit when the state terminated the eastern North Slope unit late last year.)

The May 22 decision, handed down by the same judge who will be hearing the Point Thomson lawsuit, rules on two of the pre-trial procedural motions the four companies have filed — earlier in May another judge ruled in favor of the state on another motion.

In the May 27 article, Petroleum News did not make it clear that there are no more pre-trial motions pending AND the deadline for pre-trial motions has passed. (That does not mean the former Thomson leaseholders won’t file another procedural motion. However, after the deadline the court can simply refuse to hear them or roll them into the main lawsuit, as she did in her May 22 decision.)

The judge is sticking to her original schedule for the Point Thomson lawsuit, which is June 22 for briefs from the former leaseholders, July 23 for the state’s brief, and Aug. 13 for a reply from the former leaseholders.

There is “likely to be oral argument in late August or September and a decision in the fall,” a state official told Petroleum News on May 24.

BP restarts Gathering Center 2 at Prudhoe Bay

BP has restarted Gathering Center 2 at Prudhoe Bay.

BP spokesman Daren Beaudo said the restart was “early this morning” and followed “a thorough start-up procedure and checklist.” BP expects to be back to full production rates by the end of the weekend.

The shutdown occurred May 21 after a water leak was discovered; some 100,000 barrels per day were affected.

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