Alaska Gov. Sarah Palin said she is pleased that the Superior Court of Alaska has denied a motion filed by Point Thomson leaseholders ExxonMobil, BP, Chevron and ConocoPhillips for a stay that would have allowed them to retain leases while they fight the state's earlier decision to take the leases back after the companies have failed for years to develop the North Slope field.

ExxonMobil had asked the court in December to overturn the state's decision to revoke the company's leases in the North Slope's Point Thomson oil and gas field, which holds a significant portion of the gas that would be transported on the proposed Alaska gas pipeline to the Lower 48 states (see Daily GPI, Jan. 2).

"This decision represents forward progress in our efforts to put these leases in the hands of a company that will responsibly develop them and bring the significant gas reserves in the Point Thomson area to market," Palin said.

In its appeal, ExxonMobil had asked for a reversal of the state's decision or a remand of the matter to the Alaska Department of Natural Resources (ADNR) with instructions to make a "new and different decision." Mike Menge, a former ADNR commissioner under former Gov. Frank Murkowski, made the decision to strip the Point Thomson leases from the producers after finding that operator ExxonMobil and its partners failed to issue a viable plan to develop the field (see Daily GPI, Nov. 30, 2006).

Superior Court Judge Sharon Gleason this week refused to allow the producers to delay the outcome of their appeal of an early administrative decision to terminate the Point Thomson Unit while the producers litigated the state's right to terminate the leases. The judge ordered the producers to pay a $20 million penalty or post a bond with the court for $25 million.

"This ruling tells us that standing up to protect Alaska's interests, in seeing its resources produced, is the right thing to do," said ADNR Commissioner Tom Irwin. "We will continue to stand firm in protecting the state's rights in the face of the inevitable barrage of criticism from the state's major producers. The debate over AGIA [the Alaska Gasline Inducement Act] is a good example. In protecting their shareholders' financial interests, the producers are seeking to change the rules because competition means that they may not get a deal on their terms. I hope they choose to participate in building a gasline and will meaningfully engage in the AGIA process."

The producers' briefs on appeal are due next month and the state's brief will follow. The judge will decide based on the briefs whether the commissioner's decision finding ExxonMobil's 22nd Plan of Development inadequate and terminating the unit was correct, Palin's office said.

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