Exxon Mobil Corp. might lose billions of dollars worth of oil to the U.S. government after the Interior Department denied their request for a lease extension in an area where Exxon discovered a major oil field.
Government regulators say that Exxon has not met the requirements for a lease extension. Exxon is taking the case to court. The Wall Street Journal has more on the story:
The stakes are high: Under federal law, the leases—and all the oil underneath—could revert to the government if Exxon doesn’t win in court.
The loss of the leases would be an enormous black eye for Exxon. The company hadn’t previously disclosed the size of the discovery in what is called the Julia field until it was mentioned in the suit Exxon filed against the Interior Department last week in federal court in Lake Charles, La.
The Texas behemoth faces the sobering prospect that it may have made the largest discovery ever in the Gulf of Mexico only to lose it. Tens of billions of dollars of oil could slip through its hands because it failed to follow federal rules for getting a lease extension while it moved forward with plans to get the oil out of the ground.
Exxon spokesman Patrick McGinn said the company expected to get the extension, which he said was traditionally granted as a matter of course. “You state your case and you got it. [This] was unexpected.”
The loss of the leases would be an enormous black eye for Exxon. The company hadn’t previously disclosed the size of the discovery in what is called the Julia field until it was mentioned in the suit Exxon filed against the Interior Department last week in federal court in Lake Charles, La.
The Texas behemoth faces the sobering prospect that it may have made the largest discovery ever in the Gulf of Mexico only to lose it. Tens of billions of dollars of oil could slip through its hands because it failed to follow federal rules for getting a lease extension while it moved forward with plans to get the oil out of the ground.
Exxon spokesman Patrick McGinn said the company expected to get the extension, which he said was traditionally granted as a matter of course. “You state your case and you got it. [This] was unexpected.”
