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Shell's Beaufort Sea Plan Approved

The Department of the Interior's Minerals Management Service (MMS) has approved, with conditions, Shell Offshore Inc.'s plan to explore two leases in the Beaufort Sea off the north coast of Alaska, MMS said last week.

The two leases were obtained by Shell Offshore Inc. during Beaufort Sea oil and gas lease sales 195 and 202 in 2005 and 2007, respectively (see NGI, Sept. 7). The sales were included in the 2002-2007 five-year oil and gas leasing program and are not affected by the recent court decision on the current leasing program, which sent the 2007-2012 program back to MMS for additional analysis under Section 18 of the Outer Continental Shelf Lands Act (see NGI, May 18).

"Today's announcement from the Minerals Management Service, approving Shell's plan of exploration for the Beaufort Sea, is an encouraging sign that Alaska's oil and natural gas resources will continue to play a major role in America's energy security," said Sen. Lisa Murkowski (R-AK). "This is good news as we advance increasingly serious discussions on energy legislation in the Senate. I will continue to work with the administration to ensure that environmentally responsible exploration is also allowed to move forward in the Chukchi Sea, and to secure revenue sharing for Alaska."

Shell proposes to drill two exploration wells during the July-October 2010 open water drilling season. Drilling operations would be conducted using the M/V Frontier Discoverer, a modern drillship retrofitted and ice-reinforced for operations in arctic waters.

Shell's plans include a mid-drilling season break in activities and removal of the drillship from the area to accommodate fall subsistence bowhead whaling by the native villages of Kaktovik and Nuiqsut. All operations would be suspended beginning Aug. 25, 2010, and all vessels would proceed from the project area to the northwest during the whale hunts or would leave the Beaufort Sea entirely. Activities may be resumed after completion of the subsistence hunts and extend through Oct. 31, 2010, depending on ice and weather.

Prior to any drilling activities, the plan must be consistent with the Alaska Coastal Zone Management Program and Shell must obtain an approved application for permit to drill from the MMS. Shell must also meet the air and water quality rules by the Environmental Protection Agency, and Marine Mammal Protection Act requirements of the U.S. Fish and Wildlife Service and National Marine Fisheries Service.

"Now that we have approved Shell's plan and reached this important milestone, we will continue to work with Shell to ensure that all activities are conducted in a safe and environmentally responsible manner," said MMS Director Liz Birnbaum.

Shell's plan is limited to the far western area of Camden Bay, including the use of one drillship with one tending ice management vessel. The two leases are about 16 and 23 miles north of Point Thompson, AK. MMS said this summer it would review Shell's exploration plan (see NGI, Aug. 17).

The Beaufort Sea is estimated to contain 8.22 billion bbl of oil and 27.64 Tcf of natural gas (undiscovered technically recoverable mean estimate).

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