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DNR puts alignment agreement in public file State argues agreement effectively changes Prudhoe Bay unit operating agreement, says it is required by law to make document public; BP says action violates assurances given by state when document provided Kristen Nelson PNA Editor-in-Chief
Following more than a year of discussion and over the objections of the major Prudhoe Bay owners, Commissioner Pat Pourchot of the Department of Natural Resources has had a copy of the 2001 Prudhoe Bay unit alignment agreement placed in the Prudhoe Bay unit public files at the Division of Oil and Gas.
In a Sept. 27 letter to Neil McCleary of BP Exploration (Alaska) Inc., the Prudhoe Bay operator, Pourchot said that while the state received the agreement “from BP under the Reporting, Notice and Access to Records provisions of the Charter for Development of the Alaskan North Slope” and that agreement generally prohibited “‘any representative of the State’ from divulging to the public information obtained under that provision, the State may do so where ‘required by law.’“
And the state believes it is required under law to make the agreement public.
Pourchot said DNR had further discussions with the Department of Law and “the state continues to conclude, that, as I stated in my August 28, 2002 letter to you on this same subject, the Public Records Act clearly requires disclosure of the Agreement because it contains no information required to be kept confidential.”
The agreement, signed by ARCO Alaska Inc., BP and Exxon Mobil Corp. in April 2000 with an effective date of Jan. 1, 2000, ended the division of ownership by oil and gas at Prudhoe Bay and gave each of the major owners a portion of the entire unit.
BP continued to object Pourchot, in his Aug. 28 letter, had given the major Prudhoe Bay partners 30 days to make non-confidential terms of the alignment agreement public.
BP continued to object on behalf of the owners.
“To divulge the Alignment Agreement would violate the assurances given by the state of Alaska at the time the document was provided,” McCleary, BP’s greater Prudhoe Bay performance unit leader, told Pourchot in a Sept. 23 letter.
Pourchot said in his August letter that the Department of Law and DNR’s Division of Oil and Gas reviewed the agreement as part of their work on the Charter for Development of the Alaskan North Slope and “believe the agreement should be filed with the division as a de facto amendment” to the Prudhoe Bay unit operating agreement.
McCleary disagreed, telling Pourchot the agreement “is a confidential agreement among private parties.” The agreement was provided to the Department of Law “under assurances of confidentiality,” he said.
“While the Department of Law appears to have allowed the Department of Natural Resources to review the alignment agreement, we do not understand how the Department of Natural Resources would have a copy of the document to divulge to the public. Nor are we aware of the basis for any authority for DNR to make a legal determination on behalf of the state regarding its continued confidentiality when the document was provided to the Department of Law.”
Not a de facto amendment McCleary said the Prudhoe Bay owners also disagree with the assertion that the alignment agreement is a de facto amendment to the Prudhoe Bay unit operating agreement.
“The main objective of the alignment agreement was to provide for the alignment of working interest ownership within the Prudhoe Bay unit,” he said. The agreement also provided for the resignation of ARCO Alaska as one of the unit operators and the selection of BP as its successor.
The change of operator was implemented in accordance with the governing provisions of the Prudhoe Bay unit operating agreement and Prudhoe Bay unit agreement. The alignment of interests through cross-assignment of leasehold interests submitted to DNR for approval, McCleary said.
There has been no amendment to the Prudhoe Bay unit operating agreement, he said.
Issue of trust “If the DNR proceeds to make the Alignment Agreement public, it will seriously undermine trust by the owner companies in confidentiality commitments made by State officials,” McCleary said.
In his Sept. 27 response, Pourchot said the agreement “does not contain any of the sensitive geological, geophysical and engineering data, or cost and financial information that the State assiduously protects from public disclosure under the Public Records Act and Alaska Land Act.” Pourchot also said he regrets any misunderstanding about the state’s authority to protect the alignment agreement from public disclosure:
“My intent with regard in making the Agreement public is not to undermine the trust that BP has in the State’s ability and commitment to protect confidential information from public disclosure. Rather, my intent is to comply with the provisions of State law that require my department to allow the public inspection of non-confidential public records.”
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