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Prudhoe ownership aligned; BP named operator ExxonMobil, Phillips gain oil production; BP, Exxon to work on aligning their interests at Point Thomson Kristen Nelson PNA News Editor
Prudhoe Bay, which has had two overlapping sets of owners and two geographically separate operators since production began, will become one unit with one operator with closure of the combination of BP Amoco and ARCO and the sale of ARCO Alaska Inc. to Phillips Petroleum Co. And, on the east side of the North Slope, BP and ExxonMobil said they will be working to align their interests.
The April 13 alignment and operator announcement by ARCO, BP Amoco, Exxon Mobil Corp. and Phillips said the companies “have reached an agreement to resolve outstanding issues relating to the ownership and operation” of both Prudhoe Bay and Point Thomson.
“The agreement,” the companies said, “will optimize operations, reduce costs and facilitate new oil and gas development in the state for the benefit of the unit owners, the state of Alaska, and its residents.”
New alignments At Prudhoe Bay, disparate oil rim and gas cap ownership will be replaced by combined equities: 36.8 percent for ExxonMobil; 36.5 percent for Phillips; 26.7 percent for BP.
BP, current operator on the western side of Prudhoe Bay, will become the single operator.
ExxonMobil and BP Exploration (Alaska) Inc. said they have also agreed to work towards alignment of their interests in the Point Thomson field area with respective interests of 45 percent for BP Exploration and 55 percent for ExxonMobil. Combined the two hold 66.45 percent of the leases in Point Thomson according to a state listing compiled in October. ExxonMobil is the largest Point Thomson owner (44.95 percent Exxon and 14.35 percent Mobil). BP Exploration had a 7.15 percent interest in the unit. Other owners include: Chevron 19.22 percent; Phillips 11.84 percent; other smaller owners, a combined 2.49 percent share.
On the west side of the slope, Phillips becomes a major new operator at the Kuparuk and Alpine fields, following FTC review and closing of the ARCO Alaska acquisition.
The companies said the agreement also resolves the issues that resulted in recent legal action by ExxonMobil relating to North Slope preferential rights and field operatorship.
Key advantages noted According to the companies, the agreement provides key advantages for all parties involved. Three major working-interest owners will be retained at Prudhoe Bay (ExxonMobil, BP and Phillips). There will be a single operator at Prudhoe Bay, a move which the companies expect will provide cost and ultimate recovery advantages.
The agreement will also provide for a more even distribution of liquids production at Prudhoe Bay. The companies said that the agreement signed April 13 was between the major-interest owners and still must be agreed to by minor-interest owners, so “final equity percentages have not been determined.”
The companies said they expected that as a result of the alignment, ExxonMobil’s and Phillips’ liquids production would each increase by approximately 30,000 barrels a day, and BP would acquire additional interest in Prudhoe Bay gas and at the Point Thomson unit.
The companies said that the Prudhoe Bay alignment “would remove the need for lengthy and complex agreements between parties with different interests. The elimination of that step may contribute to improved timelines for new economic developments within the PBU.”
In addition to helping to ensure efficient and long-term production of the fields, the companies said they also believe the alignment will facilitate future Alaska development, including gas commercialization.
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