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Exxon Mobil Reaches Deal on Disputed Gulf Leases (XOM)

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Exxon Mobil CorporationOil major Exxon Mobil Corporation (NYSE: XOM) on Friday struck a deal with the government on disputed Gulf of Mexico leases. The deal enables the company to move ahead with the development of a field in the Gulf of Mexico estimated to yield billions of dollars worth of oil.

Exxon Mobil had filed a lawsuit against the government last year after three of its five leases on Julia field were cancelled by the Interior Department. Patrick McGinn, a spokesman for Exxon Mobil, said that the settlement will allow Exxon Mobil to develop this very large, but technically challenging resource as quickly as possible using a phased approach.


Exxon had said in the lawsuit that the Interior Department randomly took away the company’s rights under the cancelled leases. The company also alleged that the department took away its ability to produce a reservoir believed to hold billions of barrels of oil.

The dispute began after Exxon’s request for a suspension of production in October 2008 was rejected by the government. After numerous appeals, the Interior Department came to the conclusion back in May 2011 that Exxon lacked a commitment to producing oil at the time the leases expired.

The department said that the proposed settlement allows the important regulatory progress made in the decision last May to be preserved and provides incentives for timely and thorough development of leases and secures a fair return on those resources to the U.S. Treasury.

Exxon, along with its partner Statoil ASA, has spent over $300 million drilling two producible wells on the Julia field.

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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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