Agreement
BP Amoco PLC
13 April 2000
BP AMOCO AND PARTNERS ALIGN ALASKAN INTERESTS
BP Amoco, Exxon Mobil Corporation, ARCO and Phillips Petroleum
announced today that they have reached an agreement to resolve
outstanding issues relating to the ownership and operation of the
Prudhoe Bay Unit (PBU) and the Point Thomson Unit (PTU) in Alaska.
The agreement will optimise operations, reduce costs and facilitate
new oil and gas development in the state for the benefit of the unit
owners, the State of Alaska, and its residents.
The agreement, which is subject to the completion of the BP Amoco-
ARCO merger and assumes Phillips' acquisition of ARCO's Alaskan
interests, aligns the respective equity interests of BP Exploration
(Alaska), ExxonMobil and Phillips in the Prudhoe Bay Unit, and
provides for a single operator at the PBU.
The aligned oil and gas interests among the major owners will be
26.7 per cent for BP Exploration (Alaska), 36.8 per cent for
ExxonMobil and 36.5 per cent for Phillips. BP Exploration (Alaska),
current operator of the Western Operating Area in the Prudhoe Bay
Unit, will become the single operator. ExxonMobil and BP Exploration
(Alaska) Inc. have also agreed to work towards alignment in the
Point Thomson field area with respective interests of 45 per cent
for BP Exploration and 55 per cent for Exxon.
In addition, it resolves the issues that resulted in recent legal
action by ExxonMobil relating to North Slope preferential rights and
field operatorship.
According to the companies, the agreement provides key advantages
for all parties involved:
-It will retain three major working-interest owners in the PBU (BP
Exploration (Alaska), ExxonMobil and Phillips).
-It establishes a single operator at Prudhoe Bay, thus providing
cost and ultimate recovery advantages.
-It provides a more even distribution of liquids production among
the three major working-interest owners. Since today's signing is an
agreement between the major-interest companies. Final equity
percentages have not been determined, pending a decision by the
remaining PBU owners on alignment. However, ExxonMobil's and
Phillips' liquids production will increase by approximately 30,000
barrels a day respectively, and BP Exploration (Alaska) will acquire
additional interest in the PBU gas cap and at Point Thomson.
-It would remove the need for lengthy and complex agreements between
parties with different interests. The elimination of that step may
contribute to improved timelines for new economic developments
within the PBU.
Additionally, Phillips will become a major new operator of the North
Slope Kuparuk and Alpine fields, following Federal Trade Commission
review and closing of the ARCO Alaska acquisition.
The companies stated that the agreement will not only help ensure
the efficient and long-term production of the fields, but will also
facilitate future Alaska development, including gas
commercialisation.
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