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Key hearing set in Point Thomson case DNR, oil companies will make oral arguments to Alaska Supreme Court as struggle for control of rich oil and gas unit continues Wesley Loy For Petroleum News
The legal struggle continues over the hugely valuable Point Thomson oil and gas field on Alaska’s eastern North Slope.
The Alaska Supreme Court is scheduled to hear oral arguments on Jan. 12 in a case pitting the state Department of Natural Resources against ExxonMobil and the other major leaseholders at Point Thomson.
DNR appealed to the Supreme Court after a lower court reversed the agency’s termination of the Point Thomson unit. The state is attempting to break up the unit, invalidate the underlying leases and reclaim the state acreage at Point Thomson, on grounds the oil companies have failed to develop the field decades after its discovery.
The oil companies are fighting in court to preserve the unit, which someday could host a development worth billions of dollars.
ExxonMobil is the operator at Point Thomson, with the other major leaseholders including BP, Chevron and ConocoPhillips.
30 minutes each In a Dec. 7 order, the Supreme Court said it would take oral arguments in the case beginning at 1:30 p.m. Jan. 12.
Each side — DNR and the oil companies — will have 30 minutes to talk.
It’s a chance for state and industry lawyers to sharpen their points after filing extensive written arguments with the court.
The state appealed to the Supreme Court in February 2010 after Superior Court Judge Sharon Gleason reversed former DNR Commissioner Tom Irwin’s termination of the Point Thomson unit.
In reversing the unit termination, Gleason faulted the state on two counts.
First, she held that the Point Thomson stakeholders were wrongly denied a hearing under a key section of the Point Thomson unit agreement.
Second, she said DNR lacked the appearance of impartiality in dealing with the oil companies.
Pending settlement Located along the Beaufort Sea coast next to the Arctic National Wildlife Refuge, the Point Thomson field holds trillions of cubic feet of natural gas plus hundreds of millions of barrels of petroleum liquids.
In response to the state’s pressure, ExxonMobil proposed the project to produce 10,000 barrels a day of natural gas condensate from the highly pressurized Thomson sand reservoir. ExxonMobil has said it aims to begin production by the end of 2014, and already has drilled a pair of wells at Point Thomson.
The U.S. Army Corps of Engineers is taking public comment until Jan. 3 on a draft environmental impact statement on the project.
The court case is moving forward despite a state official announcing in mid-August that a “resolution in principle” had been reached with the unit operator, ExxonMobil.
On Oct. 27, however, Gov. Sean Parnell complained that the other leaseholders had yet to sign onto the deal. He called the unresolved litigation “deeply troubling.”
Because of its vast natural gas reserves — amounting to about a quarter of the North Slope’s 35 trillion cubic feet of gas — Point Thomson is considered important for supporting a proposed multibillion-dollar Alaska gas pipeline.
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