Northstar Timeline

December 1979

Four of the five state leases (ADL Nos. 312789, 312799, 312808, and 312809) in the Northstar unit are offered in Lease Sale 30.

These four leases were issued in 1980 for a primary term of 10 years.

The fifth lease was offered in Lease Sale 39 in May of 1983. The primary term of ADL 355001 was also 10 years.

The original lessees of the Northstar leases included Amerada Hess Co., Shell Oil Co., Enterprise Oil Co., and Murphy Oil Co.

OCS Lease Sale BF - the first OCS Lease Sale in the Beaufort. The 2 federal leases, which make up the Northstar Unit, were purchased in this sale. OCS - Y - 0181: Shell Oil Co. purchased 90% and Murphy Oil purchased 10%. OCS - Y - 0179: Amoco Oil purchases 100%.

1983

Shell Oil Co. discovers the Northstar oil field while drilling the Seal Island No. 1 Well. Thereafter, during the period 1984 to 1986 additional wells were drilled to delineate the Northstar field. These wells included Shell Seal Island No. 2 (1984); Shell Seal Island No. 3 (1985); Shell Seal Island No. 4 (1985); Amerada Hess Co. Northstar No. 1 (1985); and Amerada Hess Northstar No. 2 (1986).

1989

Amoco assigns its interest in OCS - Y - 0179 to Amerada Hess Co.

1990

Amerada Hess Co. bought Enterprise's interest in the leases for $2,000,000.

Nearing the end of the original 10-year primary term for the initial four state leases and the 2 Outer Continental Shelf (OCS) leases that later came to comprise the Northstar Unit, Amerada Hess Co. and its partners approached the state Department of Natural Resources (DNR) and the federal Minerals Management Service (MMS) with a proposal to form the Northstar Unit.

DNR and MMS accepted the proposed Northstar Unit and its initial Plan of Development; thereby extending the ten-year primary term of the leases committed to the unit.

The term of the Northstar Unit was five years, from January 24, 1990 to January 23, 1995. This extension allowed the leaseholders to make annual payments to the state in lieu of drilling a well in the plan of development.

1994

Amerada Hess Co. drills Northstar No. 3 Well. Later in the year they meet with representatives of DNR and MMS to inform the agencies of its decision not to proceed with development of the Northstar Unit.

Amerada Hess Co. and Shell begin efforts to sell their respective interests in the Northstar Unit leases.

1995

On December 31, 1994 British Petroleum Exploration Alaska acquires the Amerada Hess Co. and Shell leases. BPXA is now the Sole Operator of the Northstar Unit, while Murphy Oil retains interest in 10% of OCS - Y - 179.

In early 1995 BPXA begins to seek changes in the Northstar Unit lease terms from the state. The Commissioner of Natural Resources, John Shively considers adding wording to legislation that would give the Commissioner power to modify the net profit share leases. These provisions were ultimately dropped from this legislation in the 1995 legislative session.

On March 30, 1995 BPXA submitted a comprehensive Plan of Development (POD) and requested and extension of the Northstar Unit agreement for 3 more years.

The state and the MMS approved the new POD and granted the extension in May.

Not too long after they received notification of the approval, BPXA approached the Commissioner of Natural Resources to inform him that BPXA would not develop the Northstar Unit unless the state dropped the net profit share provisions of the leases.

The Department of Natural Resources stated that BPXA's refusal to develop the Northstar Unit leases represented the first occasion in which a state oil and gas lessee has confirmed that it could develop an oil field economically, but that it is unwilling to do so unless the state renegotiates the competitively bid terms of the leases.

During the 3rd quarter of 1995 Commissioner Shively began negotiations with BPXA to remove the net profit share provisions of the leases.

In November a Notice of Intent was published in the Federal Register announcing the anticipated preparation of an EIS for the proposed Northstar Unit development and the opportunity for public input.

1996

Under the terms of the agreement negotiated by BPXA and the Department of Natural Resources, the state agreed to waive its net profit interest in the leases, and in return is to receive an increased royalty rate on one of the five leases, from 12 ½ percent to 20 percent, as well as the potential to receive a "supplemental royalty" on all of the leases, depending on whether oil prices rise sufficiently in the future beyond a specified threshold (trigger) price. In addition BPXA made certain nonbinding commitments to increases in state employment, conditional commitments to construct certain undefined modules, and facilities necessary to develop the Northstar Unit within Alaska.

The Alaska State legislature approved these conditions in May.

Public meetings were held in March, April and May to identify key areas of public concern regarding the Northstar project. These meetings were held in Barrow, Nuiqsut, and Kaktovik on the North Slope and in Fairbanks, Anchorage and Valdez. The results were published in July in the "Scoping Report."

BP began production of Northstar related equipment in the 4th quarter.

1997

In January Clyde Baxley and the Republican Moderate Party filed a suit in Superior court claiming that the newly negotiated Northstar leases were unconstitutional.

BP halted production of Northstar related equipment, and the Army Corps of Engineers halted the Environmental Impact Statement Process.

Baxley lost in Superior court in June and appealed the case to the Alaska Supreme Court.

1998

In May the Supreme Court ruled against Baxley and the Republican Moderate Party.

June 1st the Army Corps of Engineers released the DRAFT Environmental Impact Statement and opened a 60-day public comment period. The State of Alaska started their Coastal Zone Management Review at the same time.

The Army Corps held public meetings in Barrow, Nuiqsut, Kaktovik, Fairbanks and Anchorage.

The public comment period for the Army corps was extended for 30 days and closed on the 31st of August. The State extended their comment period for the Coastal Zone Review to the end of September.

1999

On January 5th BPXA began construction of ice roads that will be used to haul gravel, if they are successful in obtaining all of the needed permits.

On January 13th the state issued its proposed consistency determination, finding the Northstar project consistent with the laws and regulations of the state and North Slope Borough.

On February 5th the Army Corps released the Final Environmental Impact Statement and opened a 30-day public comment period.