ExxonMobil is making progress toward the development of the Point Thomson oil and gas field, as required under a court settlement reached earlier this year between the State and industry lease holders, a senior project manager told Alaska legislators at a hearing in June.
ExxonMobil is committed to the development of Point Thomson and has invested more than $1 billion in the last four years drilling two wells and is prepared to spend billions more, said Senior Project Manager Lee Bruce. Under the court settlement, ExxonMobil needs to complete work on those wells and drill a third. It has applied for major permits, but is awaiting regulatory approvals from the federal government, Bruce said.
Many Alaskans are working on the project, as required by the settlement agreement, Bruce said. The project management team includes a workforce of 80, with engineering involving 350 people. Since 2010, about 1,500 people from more than 150 companies have worked on Point Thomson.
Barbara Huff, Director of Governmental and legislative Affairs for Teamsters Local 959, told the Senate Judiciary Committee that many Alaskans trained at the pipeline training center in Fairbanks have been hired to work on Point Thomson. She credited ExxonMobil and its contractors for their local hire record on the project.
Point Thomson, located east of Prudhoe Bay and just west of ANWR, holds at least 20 percent of known North Slope conventional gas reserves and its development is considered essential to the economic viability of a major North Slope gas line to Lower 48 or overseas markets.
Development of the field will be challenging, given its high pressure. Wells will be drilled horizontally from land to reach a reservoir two miles offshore in the Beaufort Sea.
By 2016, ExxonMobil expects to be processing 200 million cubic feet of natural gas and 10,000 barrels of condensate daily. The company plans to re-pressurize the gas and inject it back into the reservoir through an injection well until a gas pipeline from the North Slope to markets is built. For oil and condensate, a new pipeline will be built west to the Badami field, where it would be piped through existing infrastructure to the trans-Alaska pipeline.
RDC Executive Director Rick Rogers told the Committee that the Point Thompson settlement includes firm time lines and work commitments with significant consequences, including acreage relinquishment for failure to perform. “The Settlement recognizes the technical challenges of the field and provides needed flexibility to ensure a viable commercial opportunity to produce Point Thompson resources,” Rogers said. “Even critics of the agreement have changed their view over time regarding the best way to develop Point Thompson gas. It is sensible that the agreement acknowledges uncertainties and provides for alternative development scenarios.”
Rogers noted that ExxonMobil, along with the other leaseholders, are among the best-capitalized and technically capable companies in the world. “A project of the magnitude of monetizing Point Thompson oil and gas resources requires such an operator,” Rogers said. “We will never know whether the State would have prevailed in the Point Thompson lease dispute. Even if the State prevailed years down the road, how closer would that put us to commercializing Point Thompson resources? RDC applauds the administration and the leaseholders for forging this agreement so Alaska can move forward in the shared goal of developing North Slope gas. Many technical, economic and regulatory challenges remain, but at least now we have alignment on the disposition of the Point Thompson leases and a way forward.”
The commercial dispute over the lease terms at Point Thompson has been a significant barrier to moving forward to monetize North Slope gas for the benefit of Alaskans. The State has immediate challenges, including reversing the TAPS throughput decline and adapting quickly to changing global markets for its stranded natural gas.
Dave Chaput, Program Manager for Alaska Frontier Constructors, told legislators at the hearing that “the time vested and the leadership ExxonMobil is bringing to our workforce is priceless.” Chaput added, “not only will our Alaskan workforce have good paying jobs but they will be instilled with the knowledge to be leaders in an ever expanding and important industry.” He said his company and its employees are looking forward to more work at Point Thomson.
The Point Thomson Project is 60 miles east of Prudhoe Bay. The commercial dispute over the lease terms at Point Thompson has been a significant barrier to moving forward to monetize North Slope gas for the benefit of Alaskans. RDC applauds the administration and the leaseholders for reaching this agreement so Alaska can move forward in the shared goal of commercializing North Slope gas.
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