Premier-eFinance: The fight between Exxon and the U.S. over Gulf of Mexico oil find set to continue.

Exxon Mobil’s huge oil discovery at the Gulf of Mexico’s Julia field remains a topic of hot debate as the U.S. Interior Department insists that the oil giant’s permit in this matter has expired.
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Aug. 22, 2011 - PRLog -- The Julia oil field, about 400 kilometers southwest of New Orleans and believed to hold billions of barrels of oil and gas equivalent is still making headlines. Exxon Mobil, which announced the discovery in 2008, is hoping to drill that field, but the U.S. Interior Department says Exxon’s leases have expired and the company hasn’t met requirements for an extension, Premier eFinance sources report.

After the U.S. government, earlier in the year, gave the go-ahead for companies to resume drilling in the Gulf of Mexico after it imposed a drilling moratorium after the BP oil spill, offshore exploration and production activity is slowly picking up and companies like ExxonMobil have been quick to jump back in the drilling game.

The Julia field is believed to hold over 700 million barrels of oil and gas equivalent. ExxonMobil announced the discovery, which lies roughly 250 miles southwest of New Orleans, in June 2008.

The exploitation of the fields will yield billions of dollars for both ExxonMobil and in royalties paid to the U.S. government. In fact, a 1 billion barrel field could generate roughly $10.95 billion in government royalties.

Exxon and part-owner Statoil have filed separate lawsuits in a Louisiana federal court to preserve the leases.

The dispute over the Julia field began in October 2008 when Exxon applied to extend its lease. By February 2009, the government denied Exxon’s request, saying that the company didn’t present a specific plan to produce the oil. Since then, Premier-eFinance has learned, Exxon has appealed on numerous occasions but lost its final appeal in May this year.

On August 12 Exxon filed a complaint in Lake Charles Louisiana stating that the Interior Department
overstepped its authority in a ruling on Gulf of Mexico leases for the Julia fields.

“The Interior decision is arbitrary, capricious, an abuse of discretion, or otherwise contrary to law,” and “deprives Exxon Mobil of property without due process of law,” Premier eFinance believes the oil giant’s complaint reads.

Statoil has filed a similar lawsuit in the same court.

According to Interior Department spokesperson Melissa Schwartz, the Department is reviewing the complaint.

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