Pourchot puts RIK on hold; delay likely to affect Foothills exploration

Kristen Nelson, editor-in-chief

Department of Natural Resources Commissioner Pat Pourchot said April 4 that the department will not be submitting the royalty-in-kind contracts to the Legislature this session for approval. (see page 1 story.)

“I think there’s just too little time left in this legislative session,” he said.

Pourchot also said he has received written commitments from two of the three North Slope gas producers, “for a 180-day notice prior to the commencement of any future open season over the next couple of years.”

And, he said, the state also wants to look at the royalty gas issue “in light of emerging federal legislation, which does provide for some access and expansion language.”

With six months notice, he said, the state can “go forward with these contracts “or another royalty contract” or could participate itself in an open season.

But the delay is likely to affect Foothills exploration plans.

Mark Hanley, Anadarko Production Corp.’s Alaska public affairs manager, told PNA the delay in approval of the royalty gas contracts will “quite likely” delay Anadarko’s investment in Foothills exploration.

“It’s unlikely that we’re going to invest a lot of money in an exploration well until we have some assurance of RIK gas and access language in federal law that provides fair access at a reasonable price.”

Hanley said the company had hoped that seismic shot this winter and last would be the basis for a Foothills exploration well in 2003.

But without “some assurance of federal law and the RIK contracts, we’re unlikely to make significant additional investments in the Foothills,” he said.