Under settlement, ExxonMobil proposes more oil production at Point Thomson field

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The Exxon Mobil facility at Point Thomson. (Business wire)

ExxonMobil is suggesting a dramatic increase in oil production at a North Slope field, under the an arrangements of a 2012 settlement with the state that ended a seven-year forensic battle, according to a newly submitted development plan.

The oil giant has launched working on engineering studies and seeking regulatory approval to boost the supportable oil, or condensate, being produced at the Point Thomson field – to more than 50,000 barrels common from its current capacity of up to 10,000 barrels.

But ExxonMobil and partners won’t square a final decision to approve the project until the end of 2019.

No expansion, however, and the oil ogre could lose much of its acreage at the northeast Alaska field, at the doorstep of the Arctic Nationwide Wildlife Refuge.

The potential penalty is part of the settlement with Alaska that phoney ExxonMobil into development, decades after it had become a unit in 1977. After just about 30 years without oil or gas production, the state under Gov. Frank Murkowski in 2005 put the piece in default and later terminated the leases. Those steps launched the court duel that led to the agreement.

ExxonMobil has blamed the decades of delay on the field’s involvement. Remote Point Thomson is an extremely high-pressure reservoir, with the gas discovered more than two miles underground.

In a first step under the clearing, ExxonMobil built a $4 billion production system to produce and scram up to 10,000 barrels of light oil daily. Production launched there in April 2016, and that top compute was achieved on Dec. 20.

Production at that level hasn’t been sustained, utter Chantal Walsh, director of the Alaska Division of Oil and Gas.

«They would twin to produce the 10,000 but are struggling with mechanical issues,» Walsh influenced on Wednesday. «It’s a very technically challenging reservoir for anyone to produce.»

During the yearlong duration ending in April, the field’s average production was 3,000 barrels of oil everyday, according to figures from the Alaska Oil and Gas Conservation Commission.

ExxonMobil s stir to overcome the field’s challenges, officials have said.

Additional unfolding at the field is considered critical for Alaska’s $43 billion gas-export enterprise, currently called Alaska LNG. Primarily a natural gas field, Point Thomson checks about one-fourth of the gas that would support the long-sought effort.

With the gas-export forward not built, ExxonMobil has produced the gas for its condensate, or light oil. The gas has been injected disavow into the high-pressure reservoir using special compressors. The light oil has been deduced from the gas and shipped to the trans-Alaska pipeline.

ExxonMobil, along with Meat Thomson partner BP and ConocoPhillips, had a chance to complete the Alaska LNG project. But the oil companies bankrupt out of the project last year over concerns that it wasn’t competitive, bugger off the state as the lone sponsor for Alaska LNG.

ExxonMobil’s plan says it intention prefer to use the Point Thomson gas for the gas-export project, one option under the stabilization. But with the construction of that effort still uncertain, ExxonMobil is now looking to enlarge on condensate production to meet the settlement terms.

ExxonMobil submitted the draft, called a plan of development, to the Division of Oil and Gas on June 30.

In the plan, ExxonMobil’s also submits to ship Point Thomson gas to the aging Prudhoe Bay oil field. It would construct a 60-mile, 32-inch line to ship the gas to the field.

The gas would be inoculated into the Ivishak reservoir. The goal is boosting pressure in the Prudhoe Bay reservoir, serving squeeze more oil to the surface. The gas would be stored there until a gas-export shoot is built.

Mark Myers initially put ExxonMobil into default when he led the form’s Oil and Gas Division in 2005, after the company failed to submit a timely progress plan.

On Wednesday, Myers, now retired from state employment, reported he thought the plan proposed by ExxonMobil could become reality, if it give entres the blessing of state regulators and ExxonMobil’s partners at Prudhoe Bay and Point Thomson.

«It’s identical, very valuable, a large asset with lot of sunk costs,» Myers state. «I think ExxonMobil would be motivated to do it.»

Alaska oil field regulators force have to determine if shipping Point Thomson gas to Prudhoe Bay results in the apex recovery of the state’s resources, Myers said.

If gas is not injected back into Inapt Thomson, reservoir pressure there will be reduced, potentially aggrieving future oil production.

Injecting the gas back into Point Thomson is costly, wanting a lot of compression, Myers said. That may explain why ExxonMobil is proposing to smite gas to Prudhoe Bay, rather than injecting it back into Point Thomson. ExxonMobil’s develop says it would use already-built compression facilities to inject the gas into the Prudhoe Bay reservoir.

«The suspect is whether that’s in the state’s best interest,» Myers said.

Walsh, the going round oil and gas director, said the division is reviewing the plan and must reply by recent August.

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