ExxonMobil has a long history on the North Slope of Alaska, including
joint activities with ARCO, BP Amoco and other companies. ExxonMobil values
these operations and the contractual arrangements, which include provisions
addressing preferential rights, operatorship and governance processes, that
provide the basis for such undertakings. These contracts and agreements date
back to 1964 and have governed more than 35 years of successful exploration,
development, production and other business activities among the parties. They
also provide for an orderly transition when one of the companies no longer
operates the joint assets.
We believe everyone involved should be interested in protecting the rights
of all parties under these long-standing agreements. In this regard, we have
had ongoing discussions with the relevant parties on these matters. Since
these discussions have not resulted in a satisfactory resolution, ExxonMobil
has filed a lawsuit seeking a preliminary injunction against BP Amoco, ARCO
and Phillips Petroleum to ensure that its interests are protected.
Agreements relating to the Prudhoe Bay field are complex and provide for a
unique split in equity ownership between the "oil rim" equity owners,
represented primarily by BP Amoco, which owns most of the oil, and the "gas
rim" group, represented by ExxonMobil and ARCO, which own most of the gas.
Historically, ExxonMobil's and ARCO's interests have been aligned and have
worked to balance and promote sound development and operational decisions
between the oil rim and gas rim equity owners, who may sometimes have
differing views. The elimination of ARCO and selection of a new partner by BP
Amoco -- on terms we are not aware of -- devalues ExxonMobil's interests.
Therefore, in addition to the confirmation of our preferential rights,
ExxonMobil feels strongly that the issue of operatorship must be carefully and
thoroughly addressed. Our company has invested billions of dollars in the
development of the North Slope resources and we believe it is essential that
an operator in this challenging environment demonstrate both a broad,
worldwide experience and a continuous investment in technology in order to
provide prudent management of those resources. ExxonMobil will work to ensure
the long-term and efficient operation of the fields for the maximum benefit of
the companies involved, the State of Alaska and its residents.
SOURCE Exxon Mobil Corporation
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