Exxon fights US over major oil discovery

NEW YORK -- Exxon Mobil Corp. and the federal government are fighting over one of the largest oil discoveries in the Gulf of Mexico that could yield billions of dollars of crude in coming years, according to a report in The Wall Street Journal.

The Julia oil field, about 250 miles southwest of New Orleans, may hold billions of barrels of oil and gas equivalent. Exxon, which announced the discovery in 2008, wants to tap that field. But the Interior Department says Exxon's leases have expired and the company hasn't met requirements for an extension.

http://www.forbes.com/feeds/ap/2011/08/ ... ner=alerts

That is an interesting development. I bet there is going to be a huge fight and a hoard of buzzards circling overhead.

Exxon didn't have a development plan laid out. They failed.

Leases are 'use it or loose it'. They lost.

Okay, but who are they loosing it to?
You all are worried about separation of church and state but we should not have to compete with the fed.

lol I predict the lawyers will win this fight! Both sides legal counsel will get paid...well.

CinnamonGirl wrote: Okay, but who are they loosing it to?
You all are worried about separation of church and state but we should not have to compete with the fed.

The leases go back to the Dept of the Interior, who will auction them off again. The prices will no doubt be considerably higher this time around (since there are proven reserves), so the DOI stands to make a bundle of money.

With that much money at stake, you'd think that Exxon would have crossed their 't's and dotted their 'i's rather than relying on a 'but you let us get away with it before' argument.

You snooze you lose. Now the money should come back to the taxpayer in the form of a higher lease. It's time to stop coddling the oil companies and treat them like businesses. Business needs to be competitive and athletic. American business has gotten fat and wheezy.

If the leases cost more, the fed gets more money but who will pay for it? I am guessing we will, the cost always gets passed on the customer. Or do you think that in this case it won't be passed on to the customer because it is gas. This is what I meant by competing with the fed. Maybe it won't apply in this case but it may with others. I just see a conflict of interest and that is where government should stay neutral.

It sounds to me, not sure of course, that the fed thought this is worth more money so did not extend like they normally do. If that is the case that is not right to give an extension to some an not others. That does not mean that Exxon was not stupid.

The price of gas is set by market forces. Expensive oil from lease A sells for the same price as cheap oil from lease B. Right now oil is low but gas is high. It's an irrational system.

Barackalypse will probably let Brazil come in and drill there.