Posted on 12/28/2008 6:41:29 AM PST by Al B.
More than 30 years ago, drillers made a spectacular discovery of oil and natural gas at a remote site called Point Thomson, along the Arctic coast of Alaska.
Many observers figured the new field would soon add to the production from an even richer North Slope deposit, Prudhoe Bay, which started sending oil down the trans-Alaska pipeline the same year as the Point Thomson find, 1977.
But it hasn't worked out that way.
Point Thomson has been dormant all these years. The 106,201-acre field has no working wells. It hasn't produced a single barrel of oil or molecule of gas.
Now the oil companies that long ago leased acreage at Point Thomson are in jeopardy of eviction because the landlord, the state, is tired of waiting for the taxable oil and gas to start flowing.
State officials have canceled the leases and say they o rent the land to companies more eager to drill and develop the field.
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Because it holds about a quarter of the 35 trillion cubic feet of gas already discovered on the North Slope, Point Thomson development could be vital for filling a proposed multibillion-dollar gas pipeline to the Lower 48.
The state's standoff with Exxon and other major leaseholders including BP and Chevron could reach a resolution soon -- or devolve into years of entrenched legal warfare.
State officials and Exxon executives say they've been meeting for weeks, trying to negotiate a settlement. Neither side will say what chips are on the table.
(Excerpt) Read more at adn.com ...
Can’t think of anyone I would rather have negotiating than Sarah.
Of course I cannot understand al of this,but from what I read Exxon needs to crap or get up off the pot. Sitting on the lease and doing nothing with it, isnt what the lease was given for.
How many other leases are they sitting on while ripping us off and helping the Arabs strangle us with high prices.
Exactly.
A bunch!!! But it does not seem to bother these pukes and their little salaries, http://www.marketwatch.com/news/story/exxon-ceos-compensation-increased-2007/story.aspx?guid=%7B9C6AF009-D527-48D7-A01B-55D0CF5D621A%7D
"Really, the only way the state could lose would be if it either gave up or negotiated away the victory that it already achieved."
If Washington was handling this, I'd say that was a given. However, Sarah is up there . . .
One possible solution, Johnson said, might be to require Exxon to post a large bond -- say, $100 million or more -- in exchange for its promise to develop the field.
"It's earnest money on a house," he said. "If they don't do it, then the earnest money is ours."
Sounds like a winner - put up or shut up. They should have done this earlier.
From the article
The field is remote, located 60 miles east of Prudhoe Bay next to the Arctic National Wildlife Refuge. Its reserves are deep and under unusually high pressure. To handle the pressure, the company would need brawny wells that cost a lot more to install.
Perhaps most significantly, Exxon noted the lack of a pipeline to carry Point Thomson's dominant resource -- natural gas.
Facts are pesky little things ...aren't they
High oil prices make the area viable for development ... it's at $147 per barrel so NOW is the time ... oh, wait, what happened ... $35 per barrel you say. But Big Oil should just go ahead and invest $billions anyway?
Actually, they made a spectacular discovery of natural gas and condensate (natural gas liquids).
The state only started calling the liquid oil when they wanted to take back the lease. For decades before, they called it condensate.
The switch began with Gov. Palin's predecessor, Gov. Murkowski.
AOGCC expects condensates in Pt. Thomson plan
http://alaskajournal.com/stories/071005/hom_20050710024.shtml
July 10, 2005
The chairman of the Alaska Oil and Gas Conservation Commission said his agency will expect any plan by Point Thomson unit leaseowners to develop the field as a conventional gas field to also address production of liquid gas condensates.
AOGCC is Alaska’s oil and gas regulatory agency charged with, among other things, insuring maximum physical recovery of hydrocarbon fluids.
Exxon Mobil Corp., BP Exploration (Alaska) Inc. and Chevron Corp. met June 29 with the state Division of Oil and Gas, a sister agency to the AOGCC, to discuss ideas for developing the field, which has an estimated 8 trillion cubic feet of gas and 200 million barrels of liquid condensates.
Well then, they shouldn't mind so much when Sarah yanks it back and gives it to someone willing to take the risk of developing it. They weren't going to do anything with it anyway.
The kind of company who can handle developing a field like this may not be interested at current natural gas prices. Gas under that much pressure requires special equipment and knowledge. Exxon, BP and Shell may be more willing to let the leases lapse than be forced to develop it if it’s not economical.
If they dont want to invest, they should drop the lease and let someone else do it if they care to.
Also if it was viable at $147 dollars a barrel what were they waiting for??? $200. Why didnt they start then?.
I appreciate your opinion, but my opinion is that they are sitting on these leases to keep others off, while they rake in record prices by keeping the supply down. The lack of a pipeline is because of the lack of the wells. “Build it and they will come.”
This article misrepresents the facts of this field. It is a high-pressure gas field with natural gas liquids.
It is not a typical crude oil field just waiting to be pumped. Many plans have been considered prior to know to develop the field. But until the Alaskan Natural Gas pipeline became a real possibility this field had little value.
An accurate description of this 10,000 psi natural gas field can be found in the article below and how the liquids would have to be produced originally.
Exxon’s Point Thomson will be North Slope’s first high-pressure condensate field
http://www.petroleumnews.com/pnads/70447496.shtml
November 18, 2001
A different kind of field
What kind of a field is Point Thomson? PNA talked to petroleum manager Bill Van Dyke and petroleum reservoir engineer Mike Kotowski — both with the Department of Natural Resources Division of Oil and Gas — about Point Thomson.
Point Thomson is a high-pressure condensate reservoir. It’s different from a field like Alpine, which is a traditional black oil reservoir, said Van Dyke.
And different than fields that have been developed up until now on the North Slope Kotowski said.
“Because of the high pressure, the wells will be relatively more expensive to drill because they’ll probably be an extra string or two of casing set and the tubing will be rated for higher pressure, the well heads will be rated for higher pressures,” Van Dyke said.
The drilling mud will also be more expensive, Kotowski said, “because it will take heavier materials to contain the reservoir pressure.”
Even the surface flow lines will have to be rated for higher pressure, Van Dyke said.
The Point Thomson owners are talking about doing a gas cycling project, he said, extracting condensates — gas liquids — from the gas and then reinjecting the gas.
With reservoir pressures at Point Thomson at some 10,000 pounds per square inch, compared to about 4,000 pounds at Prudhoe Bay, “they’ll need compressors that can handle those higher pressures,” Van Dyke said.
“And the bottom line is, compression horsepower is very expensive,” Kotowski said, both to buy and to run.
Exxon has had 30 years to develop the lease. Why not use the record profits from this summer’s $147 a barrel oil?
The “It’s not profitable enough” line has become stale.
As an earlier poster said, Exxon needs to crap or get off the pot.
At least the $35 will be going to a US Company, not a foreign/Muslim entity.
Keep the money here in the USA!
Hmmm! Instead of a huge bailout to the UAW, why not let the $ be spent on recovering product from this field. Drill here....drill now....screw the pressures (both down-hole and a-hole enviro-marxists)!
You don’t get it, Exxon has wanted a bailout for this project for years, the bought and paid for Alaskan senator tried many times to slip it in legislation. You just favor your kind of bailout over others. Exxon, wanted the tax payers to pay the upfront cost.
Let me be clearer....screw Exxon....but if $900 billion (or whatever) is going to be spent to bail out the UAW, I say spend it on recovering the resource and pay the dividends to the investors (taxpayers) who own it.
Of course, it's just fantasizing.....
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