Business | Oil & Gas
Alaska rejects Exxon's latest development plan for gas field
Exxon said it will appeal the decision, which terminates the Point Thomson development unit and could lead to the cancellation of the field leases.
- Reuters
- Published: 00:31 April 24, 2008
Anchorage: Alaska has rejected ExxonMobil's latest plan for the giant Point Thomson natural gas field on the North Slope despite industry warnings of another lengthy setback to development of an Alaska gas pipeline.
Exxon said it will appeal the decision, which terminates the Point Thomson development unit and could lead to the cancellation of the field leases. A spokes-woman said the company plans to "pursue all alternatives to protect our rights to develop these resources".
Chevron, which holds a 25 per cent stake in Point Thomson, vowed to sue over the decision. "We are shocked and very disappointed by this decision," Scott Davis, the Chevron executive overseeing its Alaska business, said. "With this decision the state has taken a giant step backward in bringing North Slope gas to market."
Point Thomson is thought to hold at least eight trillion cubic feet of natural gas reserves and 200 million barrels of liquids and would be a vital source of supply for any Alaska natural gas pipeline project. The state has accused the oil companies of delaying development of Point Thomson. The majors reject that charge, saying the giant gas field cannot be put into production until a pipeline is constructed to ship Alaska gas to the rest of the US.
Exxon owns about 36 per cent of Point Thomson, and BP owns 32 per cent.
The Alaska Department of Natural Resources ruling said Exxon's failure to develop the field under 22 previously submitted plans compromised the credibility of its latest proposal.
"The history of this unit and the evidence offered by the Appellants have convinced me that approving the [development plan] will not result in timely development of these valuable state lands," DNR Commissioner Tom Irwin wrote.
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