Drilling for Answers in Alaska : Energy: A legislator in the state and others are asking if firms hid an important oil discovery to bolster the case for drilling in a wildlife refuge.

As the U.S. Senate prepares to argue the merits of opening the Arctic National Wildlife Refuge to oil drilling, an Alaska state legislator and others are asking whether oil companies sat on a promising oil prospect in part to bolster their case for drilling in the refuge.

Industry officials deny the allegations.

At issue is the Point McIntyre oil field on Alaska’s North Slope. The field, believed to hold as much as 300 million barrels of recoverable oil, lies near existing oil field infrastructure and could produce oil to be pumped into the 800-mile trans-Alaska pipeline.

Retired Virginia oil tanker broker Charles Hamel--who once held an interest in Point McIntyre leases where oil was discovered--accuses the oil industry of deliberately abandoning the search for oil in the field in 1977 to cheat him and his partners out of royalties.

The allegations are contained in litigation filed by Hamel against Exxon Corp., which bought his interest in the leases, and others. Exxon officials have denied the allegations in court filings.

Hamel’s suits, on file in U.S. district courts in Anchorage and Houston, were filed over the past two years.

The suits also allege a 10-year conspiracy by oil companies to deceive the public about the existence of oil under the Point McIntyre field. Hamel, a longtime industry gadfly, is publicizing the dispute now in hopes of influencing debate by the full Senate on ANWR, which is expected to commence as early as this week.

According to Hamel’s suits, Exxon started buying up leases around Point McIntyre in 1986, based in part on information from wells drilled in 1977.

In the years following, proponents of ANWR drilling--including Exxon officials--were arguing that ANWR held the last, best chance for a sizable oil discovery in the United States. Without ANWR, they said repeatedly, there would not be enough oil to keep the trans-Alaska pipeline open for long.

Susan Andrews--a spokeswoman for Atlantic Richfield Co., which operates Point McIntyre--declined Tuesday to comment on the allegations, saying the company does not discuss matters in litigation. But she said it was “stretching it” to suggest that Arco was part of an oil industry conspiracy.

Meanwhile, Alaska Rep. Cliff Davidson (D-Kodiak)has asked state Natural Resources Commissioner Harold Heinze to answer questions about the timing of the discovery of the Point McIntyre field. Davidson said he will also ask a committee of the Alaska House of Representatives to look into the matter.

At stake, potentially, are millions of dollars of oil royalty fees that might have been paid to the state sooner had the oil companies announced the discovery of oil at Point McIntyre earlier, Davidson explained. Oil production is tentatively scheduled to begin at Point McIntyre in August, 1993, Andrews said.

Heinze, who formerly ran Arco’s Alaskan operations, said Tuesday that he had not received Davidson’s request for information. “When I receive the letter, I will forward it to the Division of Oil and Gas, who will be happy to answer it,” he said.

The first well in the Point McIntyre field was drilled in the first week of September, 1977. State oil drilling logs show that the well showed “fair to poor” indications of oil in a 1,000-foot zone.

The indications, nonetheless, were apparently good enough to lead the former Gulf Oil Co. to consider further testing. An internal Exxon memo, dated Sept. 6, 1977, describes a plan by Gulf to conduct a test to assess whether there was enough oil to produce.

But state documents show that the well, designated Point McIntyre No. 1, was capped and abandoned shortly thereafter.

“It had every appearance of being a good oil well, an attractive show,” said a petroleum engineer hired by Hamel and familiar with Alaska drilling operations, who spoke on condition of anonymity. “I cannot conceive why they didn’t do (the test).”

Andrew Hardiman, a division manager in Houston with Chevron, the company that bought Gulf, said the oil in the well was deemed uneconomical at the time. He was not aware why further testing may have been called off. Chevron no longer has an interest in the field, he added.

It wasn’t until March, 1988, that a third well was drilled near Point McIntyre No. 1, and subsequent testing revealed enough oil to produce commercially.

Arco announced the discovery of oil at Point McIntyre in February, 1989, nearly a year later. Andrews says the announcement was delayed because final tests needed to be completed on the well. Those tests were completed Feb. 16; the announcement was made five days later.

At the time, the U.S. Congress was debating whether to open ANWR to oil drilling.

In congressional testimony about ANWR in June, 1988, Arco and Exxon officials and others from the oil industry never mentioned Point McIntyre, according to hearing transcripts.

At the same time, company officials were advising the Congressional Office of Technology Assessment as it prepared a report on ANWR oil production potential at the request of legislators. The report was completed in February, 1989. It too contains no mention of Point McIntyre.

“If it had come up (in discussions with oil officials), I’m sure that we would have mentioned it in the report,” said Peter Blair, program manager for the OTA’s energy and materials office, which prepared the report.

Generally, Arco’s Andrews said, no word of exploratory drilling is given until a formal announcement is made--in this case, until Feb. 21, 1989.

By the time news of Point McIntyre became public, Congress was already close to a decision on opening ANWR. The next month, the issue became moot when the massive oil spill from the tanker Exxon Valdez derailed all consideration of ANWR until this year.

Oil Dispute A lawsuit and an Alaskan legislative inquiry are raising quetions about when oil companies discovered oil in the Point McIntyre oil field. Royalties are one issue. A bigger question is whether the oil industry sat on news of the discovery to bolster its argument for opening the nearby Arctic National Wildlife Refuge to drilling. the industry, which denies the allegation, says ANWR could provide a new source of oil to pump through the trans-Alaska pipeline.