NEWS BULLETIN

August 20, 2001 --- Vol. 7, No. 102August 2001

Phillips files application for Cosmopolitan unit

A final application from Phillips Alaska Inc. to unitize seven state lower Cook Inlet leases, totaling 24,600 acres, and two federal Outer Continental Shelf leases, totaling 9,765 acres, has been received by the state Division of Oil & Gas and the U.S. Minerals Management Service, respectively.

Working interest owners in the new Cosmopolitan unit are Forest Oil and field operator Phillips.

Phillips is permitting two wells with sidetracks from private surface and offshore bottom holes within the proposed unit. The bottom hole location is on state lease 384403 in Township 3 South, Range 15 West, Section 33, Seward Meridian.

The 4.6 acre Cosmopolitan drilling pad is being built this summer approximately five and a half miles north of Anchor Point and a half mile west of the Sterling Highway.

Drilling is expected to begin on the Hansen #1 well in September.

Gas workers join natives in British Columbia blockade

A group of British Columbia oil and gas workers switched sides to defend an aboriginal blockade of a Petro-Canada gas well and pipeline site, after earlier planning to demonstrate against the natives.

A spokesman said a meeting with Chief Bernie Metecheah, of the Halfway River First Nation, convinced them Petro-Canada "is someplace they shouldn't be," although the workers remain unhappy with the blockade.

"I'll tell you, I sure got my eyes opened," he said.

As a result, the workers now intend to stop traffic on the Alaska Highway in an effort to educate travelers about the native claims.

Halfway River says several hunting camps face destruction if Petro-Canada proceeds next month with plans to build a C$7 million pipeline to carry up to 21.5 million cubic feet per day from new wells.

Senior Petro-Canada executives met with Halfway River leaders, but both sides have agreed to keep a lid on the specifics of their negotiations.

An attorney for Halfway River said the blockade will remain, despite "good discussions," while a spokesman for Petro-Canada said the meeting was held in a "spirit of co-operation and (involved) a lot of frank discussion."

For now, Petro-Canada has agreed not to send vehicles on to the disputed land and native leaders will allow workers to leave once drilling is completed and the site is secured.

Further meetings are expected, although no schedule has been set.

Pierre Alvarez, president of the Canadian Association of Petroleum Producers, said the industry's chief lobby group is "closely" monitoring developments.

A year ago CAPP sent a letter to federal Indian Affairs and Northern Development Minister Robert Nault warning him of a simmering controversy over aboriginal land claims in the gas-prolific region of northeastern British Columbia.

It urged the government to take prompt action to deal with the claims saying the "issues are at the heart of the industry's inability to obtain certainty and clarity" regarding access to the land.

CAPP said a potential C$20 billion of investment is at risk.

Yukon's Duncan says U.S. stands firm on ANWR drilling

Yukon Premier Pat Duncan, after a private meeting with U.S. Interior Secretary Gale Norton, is now certain the Bush administration won't change its mind on drilling in the Arctic National Wildlife Refuge.

Duncan said a brief discussion with Norton during the Western Governors' Association annual meeting in Idaho last week indicated it was obvious Norton would not budge from her support for ANWR drilling.

Duncan said Yukoners would have been "quite discouraged" had they heard Norton's position. "She was definitely very pro-development."

Duncan said she explained the concerns of Gwitchin people of Alaska, the Yukon and the Northwest Territories, who have "viewed this area as a sacred place for thousands of years" and argue that any drilling will endanger the calving ground of a caribou herd that is a vital part of their existence.

"The argument against drilling and the opposition against drilling is heartfelt," Duncan said in a conference call. "To (Norton's) credit, she did recognize this."

She said the Gwitchin arguments are making an impact on Norton, but not enough to override her greater desire to secure more domestic oil supplies for the U.S.


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