Hearing begins on Exxon Mobil's Point Thomson leases

Posted: Wednesday, March 05, 2008

ANCHORAGE - The state has begun a hearing that could result in the termination of Exxon Mobil leases at Point Thomson, a remote section of land east of Prudhoe Bay.

Exxon and its partners in 1977 won the rights to drill for oil at Point Thomson. Despite research that showed promising finds of oil and gas, Exxon has not produced one barrel of crude from the tracts.

A Superior Court ruling gave the state the right to terminate Exxon's lease but the state must conduct a hearing first on Exxon's plan to develop the field, the 23rd plan in 30 years.

On Monday, a hearing room was packed with lawyers, oil industry executives and onlookers.

Department of Natural Resources Commissioner Tom Irwin will be the one-man judge and jury for Exxon in its quest to keep the Point Thomson leases. He told Exxon attorneys their job was to persuade him "that the pattern has been changed."

Craig Hayes, Exxon's Alaska production manager, presented the company's plan to develop tracts. He said the company was proposing a firm commitment to drill at least five wells begin production by 2014. Past proposals did not involve a commitment to a firm timeline.

Hayes said the company will start a drilling program this winter to prove its intentions on the leases.

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