ANCHORAGE, Alaska (Reuters) - Exxon Mobil Corp <XOM.N> said it plans to seek more than $800 million in compensation from Alaska if the state follows through with its plan to void the company's leases at the Point Thomson gas and oil field.
By Yereth Rosen
ANCHORAGE, Alaska (Reuters) - Exxon Mobil Corp <XOM.N> said it plans to seek more than $800 million in compensation from Alaska if the state follows through with its plan to void the company's leases at the Point Thomson gas and oil field.
Exxon raised the specter of a financial claim at the same time the company and its Point Thomson partners -- BP <BP.L>, Chevron <CVX.N> and ConocoPhillips <COP.N> -- formally asked state Natural Resources Commissioner Tom Irwin to reconsider his rejection of the latest Point Thomson development plan.
The documents were filed Monday, the deadline for the reconsideration request.
!ADVERTISEMENT!Exxon said in a letter with the state Department of Natural Resources (DNR) that its group would be entitled to compensation for investments made in the field and damages from further delay.
"These damages total well in excess of $800 million, and may be expected to increase in the future," the company said in the seven-page document outlining its prospective financial claims against the state.
The Point Thomson partners would also be entitled to any proceeds received by the state if it puts the voided leases back up for sale, Exxon said.
Exxon spokeswoman Margaret Ross said the company was not seeking to collect any damages at this time. She said the claim for damages was only procedural, and was made to preserve its rights to seek payment in the future.
Irwin's April 22 decision to reject the 23rd Point Thomson development plan was the latest official action taken by the state to revoke leases at the field where state leaders say oil company inaction justifies repossession of that state property.
The unit, created in 1977 and containing leases that date back to the 1960s, holds 8 trillion to 9 trillion cubic feet of natural gas and hundreds of millions of barrels of condensates and oil, according to state officials.
No well has been drilled at Point Thomson since 1982. State officials consider Exxon, the operator of the unit, and the other Point Thomson partners to be in gross violation of lease obligations.
While the natural gas cannot be commercialized without a highly expensive and yet-to-be-built gas pipeline, state officials have long maintained that Point Thomson's liquids can be produced.
State efforts to revoke the leases started in 2005, when the partners reneged on a 2001 pledge to drill development wells.
In their 23rd development plan, the Point Thomson partners pledge a $1.3 billion investment to start production of 10,000 barrels a day by 2014.
Rejection of that plan will further delay development and will ultimately delay development of a long-desired natural gas pipeline, the partners said in their request for reconsideration.
"Instead of accepting a careful and technically sound plan of development that commits to put the unit into production by 2014 ... termination of the unit will produce years of delay, and will virtually ensure that no one will be in a position to rely on Point Thomson gas in making shipping commitments in any open season on any schedule now proposed," the companies' reconsideration request said.
"The decision could thus delay for years any gas pipeline from the North Slope, as well as postponing production of liquids at Point Thomson itself," the document said.
(Additional reporting by Michael Erman in New York, editing by Matthew Lewis)
