A revised development plan for one of the nation's largest oil fields does not appear to contain the marketing details for natural gas sought by the state, leaving open the question of whether the Walker administration will be satisfied, documents released on Tuesday show.
BP, in a cover letter sent with its revised plan, said it couldn't provide the marketing details. A confidentiality agreement between ExxonMobil, BP, ConocoPhillips and the state, signed as part of the $55 billion Alaska LNG project, "prohibits sharing or discussing the marketing information" the Alaska Division of Oil and Gas is seeking, BP said.
The state's representative in the Alaska liquefied natural gas project is the Alaska Gasline Development Corp.
The proposed annual activity plan for Prudhoe Bay has been the subject of a monthslong dispute that began in January, when the administration, eager to see North Slope natural gas produced and sold in Asian markets, made the unusual request of seeking gas-marketing details from the major producers at a field that for decades has been almost exclusively focused on oil production.
The vast quantities of natural gas at Prudhoe Bay have for years been reinjected back into the ground to keep oil reservoirs pressurized so more oil flows to the surface.
BP, which as the Prudhoe operator files the annual development plan with the state, also said anti-trust law prohibits the company from "requesting, possessing, or discussing" the proprietary marketing information of its partners.
"In any event, that information is not related to the operation and development of the (unit) as set forth in the Prudhoe Bay Unit Agreement," the company said.
The revisions to the development plan are limited. BP notes it has provided technical details to third parties as part of the confidentiality agreements with Alaska LNG.
It also points out that BP, as the unit operator, is not involved in marketing, because doing so would violate the unit agreement between the state and the major producers. Instead, individual companies do their own marketing and BP cannot legally solicit or accept proprietary marketing information from other Prudhoe producers, the company said.
[BP revised development plan for 2016.]
On June 30, the state's oil and gas division took the rare step of not approving the annual activity plan submitted in late March by BP, with an expected start date of July 1. Division director Corri Feige temporarily extended the 2015 development plan four months and gave the producers until Sept. 1 to file a revised development plan providing the information.
The division has sought information about what steps will be taken by the producers to sell gas to support an LNG project, including gas pricing terms, gas volumes to be delivered and the identity of parties expected to be involved in "substantive" marketing discussions with the partners.
The state now has until Nov. 1 to decide its next steps, including whether it will approve the 2016 plan. With Prudhoe leases on state land, one of Alaska's more aggressive options would be to declare the leases in default, which could lead to a foreclosure or eviction effort that the producers could fight in court. Gov. Bill Walker has indicated such an approach would be unlikely.
"We are reviewing the submissions under our regulations and we're not going to have comment on them, or speculate about what the outcome of our review will be while that's pending," said Elizabeth Bluemink, spokesperson for the Alaska Department of Natural Resources.
The state received the development plan and related documents by the deadline on Thursday but did not immediately release the plan to media, citing concerns about confidential proprietary information.
No information needed to be redacted, said Bluemink on Tuesday.
ExxonMobil also submitted a letter Thursday to the state asserting the original proposed development plan submitted by BP on March 31, as well as follow-up communications, met legal requirements.
[ExxonMobil's comment to the state.]
An official with ConocoPhillips said the company did not submit a comment on Thursday. But ConocoPhillips supports BP's revised development plan, the official said.