Alaska to revoke leases on North Slope gas field

The state of Alaska plans to strip oil companies of their leases on the Point Thomson oil and gas field after finding the primary leaseholder, Exxon Mobil Corp., in default for failing to come up with a viable plan for developing the field’s vast North Slope gas reserves.

Gov. Frank Murkowski, with Natural Resources Commissioner Mike Menge, announced the decision Monday, just one week shy of the end of his administration.

Murkowski said Exxon Mobil, despite being granted numerous extensions, failed to make good on its obligations.

“Basically Exxon did not choose to meet a development scenario which the state felt was mandated after so many extensions,” Murkowski said.

Exxon Mobil spokeswoman Susan Reeves said the company was disappointed in the state’s decision. She declined to say whether the company would appeal the decision but predicted it would hurt the state in the long run.

“This is a major setback for an Alaska gas pipeline project since the Point Thomson gas is critical for the project,” Reeves said.

Murkowski said that under the proper lease terms, the Point Thomson reserves could become an incentive for companies to develop the state’s long-cherished goal of building a natural gas pipeline.

Point Thomson is the North Slope’s second-largest natural gas field, after Prudhoe Bay. It is estimated to hold about 9 trillion cubic feet of gas reserves, more than a quarter of the known gas in all North Slope fields.