Exxon Says ‘Significant Progress’ Made to End Alaska Gas Dispute

Exxon Mobil Corp. has made “significant progress” toward resolving an Alaska natural-gas dispute, and more work remains to reach a settlement, David Eglinton, a company spokesman, said in an e-mail.

Exxon, BP Plc (BP/) and other oil companies are embroiled in a six-year-old lawsuit over their leases to the Point Thomson oil and gas field on Alaska’s North Slope, estimated to hold 300 million barrels of oil and 8 trillion cubic feet of natural gas.

The state revoked the leases, which date back to 1965, in 2006 for failure to submit an acceptable development plan. The companies sued and won a court ruling last year reversing that decision.

Alaska Governor Sean Parnell said March 20 that the parties had been meeting over the last three months and the companies had been given a deadline of the end of this month.

“The state is cautiously optimistic that the Point Thomson dispute will be resolved by the governor’s deadline,” Elizabeth Bluemink, a spokeswoman for the Alaska Department of Natural Resources, said in a phone interview.

She declined to comment about what would be included in the settlement. Parnell said earlier this month that his goal was “production out of Point Thomson.” The oil companies, primarily Exxon, have invested more than $1 billion in the field over the last three years, he said.

Alaska Supreme Court

The state appealed the lower-court ruling to the Alaska Supreme Court, which held a hearing on the case Feb. 8 and hasn’t yet issued a ruling.

Dawn Patience, a BP spokeswoman, said in an e-mail yesterday that company teams “are actively working to resolve” the Point Thomson issue.

“We’re still in a joint discussion phase regarding an effort that would evaluate a North Slope liquefied natural gas pipeline,” Natalie Lowman, a ConocoPhillips (COP) spokeswoman, said in an phone interview.

As for the possible LNG project, Lowman said: “We’ve focused on evaluating the economic viability of an LNG project from the North Slope to south-central Alaska.” The evaluation includes considering a possible LNG facility that would liquefy gas for potential exports, she said.

The lower-court case is Exxon Mobil Corp. (XOM) v. State of Alaska, 3AN-06-13751, Alaska Superior Court, Anchorage. The appeal is State of Alaska v. Exxonmobil, S-13730, Alaska Supreme Court.

To contact the reporters on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net; Joe Carroll in Chicago at jcarroll8@bloomberg.net

To contact the editors responsible for this story: Charles Siler at csiler@bloomberg.net; Michael Hytha at mhytha@bloomberg.net

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