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Conoco dropping Point Thomson acreage
ConocoPhillips Alaska is dropping its working interest ownership in the Point Thomson unit, the company said, confirming news first reported in the Alaska Dispatch.
The company’s interest, about 5 percent, is being relinquished to the other unit owners per the unit operating agreement, ConocoPhillips Alaska spokeswoman Natalie Lowman told Petroleum News in a May 4 email.
“In the current oil price environment, we are scrutinizing all our investments and PTU does not compete in our portfolio with other projects,” she said. The company will be focusing “on assets where we have more significant working interest,” Lowman said.
At the Point Thomson initial participating area ConocoPhillips’ ownership was 5 percent in 11 tracts and 3.5 percent in a 12th tract.
ExxonMobil, the Point Thomson operator, has the largest working interest ownership, 62.7 percent (prior to ConocoPhillips’ exit) in 11 tracts and 46.3 percent in a 12th; BP, also prior to ConocoPhillips’ exit, had a 32.3 percent interest in 11 tracts and a 22.7 percent interest in a 12th.
No PTE Pipeline interest ConocoPhillips was not a partner in the PTE Pipeline, built to move Point Thomson condensate production to a connecting point with an existing line at Badami. PTE is owned by ExxonMobil Pipeline Co., 68 percent, and BP Transportation (Alaska) Inc., 32 percent. The line, built to carry 70,000 barrels per day, has the potential to serve other fields which might be developed on the eastern side of the North Slope.
ConocoPhillips joined the state of Alaska in protesting an initial tariff of $20.39 per barrel proposed by PTE Pipeline. The parties reached a settlement in September, providing for an initial rate through March 2017 of $17.56 per barrel and a rate of $12.09 per barrel beginning April 2017 and ending when PTE places a new rate in effect, but no later than July 1, 2019.
In initial protests the state called the proposed $20.39 rate “unjust, unreasonable and unlawful” and when it intervened ConocoPhillips noted that as a part owner at Point Thomson it would be a shipper and had a direct financial interest in the outcome of the tariff proceeding.
In approving the settlement in October, the Regulatory Commission of Alaska noted that the state, as a royalty interest owner and ConocoPhillips as a working interest owner, had interests “diverse from those of PTEP LLC.”
When ConocoPhillips filed to intervene in November 2015 it said it would be a future shipper and “therefore has a direct financial interest in the outcome of the proceedings.”
No connection to major gas project ConocoPhillips said its decision to drop its working interest ownership at Point Thomson “is no reflection on our support for a state-led project to monetize NS gas. We have been and are still willing to make our gas available for sale at the wellhead.”
In a joint letter to Gov. Bill Walker last September, in support of the Alaska Gasline Development Corp. taking the lead on a project to commercialize North Slope natural gas, BP and ConocoPhillips said “our affiliates have supported a State-led project by committing to make gas available to a viable ANS gas project through bilateral negotiations of mutually agreed, commercially reasonable terms.”
The project, originally led by ExxonMobil, included BP, ConocoPhillips and the state in a joint effort to move North Slope natural gas to market through a liquefied natural gas project.
- KRISTEN NELSON
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