ConocoPhillips, Shell To Expand Alaska Drilling
Author: Kristen Hays
Oil companies with their sights on drilling for oil off Alaska on Wednesday said President Barack Obama's offshore oil announcement allows them to press ahead with big projects there.
Two companies -- Royal Dutch Shell and ConocoPhillips -- have spent large sums to secure drilling rights in the remote Chukchi Sea, only to see their plans put on hold by court challenges.
Marvin Odum, president of Shell Oil Co, Shell's U.S. arm, said Obama's plan clears the way for the company to begin exploration drilling this year off Alaska's northwestern coast.
"This is actually good news for us in Alaska. It's certainly something we've been looking forward to," Odum said at a news conference on Wednesday announcing the startup of the company's Perdido oil and gas platform in the Gulf of Mexico.
Shell is the largest leaseholder in the Chukchi and Beaufort seas off the north shore of Alaska, which could be home to some of the most prolific, undiscovered U.S. hydrocarbon basins.
Shell spent $2.1 billion for Chukchi Sea leases in 2008, and ConocoPhillips, the third-largest U.S. oil company, spent $506 million for its Chukchi leases the same year.
ConocoPhillips spokesman John Roper said Obama's plan allows the company to proceed after a U.S. appeals court ruling last year ordered an environmental review of Chukchi and neighboring Beaufort areas.
"Our understanding is that today's announcement means exploration and development of existing Chukchi and Beaufort leases can proceed," Roper said.
The company's initial exploration of Chukchi leases is slated for the summer of 2012, Roper said. ConocoPhillips has spent tens of millions of dollars on environmental studies.
In January Statoil, Norway's government-owned oil and gas company, bought a 25 percent interest in ConocoPhillips' Chukchi leases. Statoil also has 16 leases there.
The Obama administration's plan said exploration drilling in leased areas could begin as early as this summer. However, the plan nixed four future lease sales in the current 2007-2012 plan.
Odum was nonchalant about the removal of those lease sales.
"That's acceptable because there are quite a few leases already," he said. "We have plenty of work to do for a couple of years to execute that program."
The Chukchi, between northwest Alaska and northeastern Siberia, is believed to hold 15 billion barrels of recoverable oil and 76 trillion cubic feet of natural gas, according to U.S. government estimates.
(Editing by Lisa Shumaker)