NEWS BULLETIN

July 18, 2001 --- Vol. 7, No. 80July 2001

Fire reported at Rig 7ES

There was a fire last night on Nabors Alaska Drilling Inc.’s Rig 7ES while the rig was being transported from drill site 18 to D pad in the Prudhoe Bay field. BP Exploration (Alaska) Inc. spokesman Ronnie Chappell told PNA that the cause of the fire, which was reported at 10:20 p.m., was unknown.

Two Nabors employees received minor injuries in the incident. Both were treated at the Prudhoe Bay medical facility and then flown to Providence Hospital in Anchorage for further evaluation. Both were treated and released.

The fire “appears to have originated in the system used to move the rig from place to place,” Chappell said “The hydraulic fluid in that system caught fire. Several large tires on the rig also caught fire and burst.” Fire response teams from both sides of the field helped contain the fire which was extinguished by 1:40 a.m. today. Chappell said fire crews stayed on the scene “to cool hot spots.”

A spill response team was “mobilized and was on scene to clean up and contain spilled fluids from the rig and fire fighting response,” he said. Fire fighting foam “reached a lake adjacent to the scene. The response team used boom to contain the foam so that it could be recovered by vacuum truck,” Chappell said. The spill was estimated to be five gallons.

Nabors has put together an investigation team, he said, to determine to cause of the fire. Field operator BP, the builders of the rig and the company that manufactured the components used in the moving system, will participate in the review.

Strategy is imminent for British Columbia offshore

British Columbia's new government will fast-track a decision on whether to lift its offshore moratorium, although Energy Minister Richard Neufeld said the first well would be at least eight years away, if at all. He promised a plan will be released within two weeks outlining a government strategy for assessing community support and reaching a decision.

At the same time, Neufeld rejected two years of work by Northern Development Commissioner John Backhouse, who proposed a series of 15 public meetings, to be completed by March 31, 2002. Neufeld dismissed the report as a leftover from the former New Democratic Party government, which was virtually wiped out in an election landslide two months ago.

"We are disappointed the NDP didn't ask for more," he said. "We're no further ahead now than we were when (Backhouse) started."

Neufeld said his action plan will outline how the "B.C. government is going to take the offshore oil and gas issue forward in an expedited fashion." Rather than another 18 months of meetings, he said the government is confident it can "move quicker and still involve people in the northwest."

The Canadian Association of Petroleum Producers told the government last week it is anxious to access offshore oil and gas reserves, but won't get involved until the 1972 moratorium is lifted. Neufeld that that while some in the government favor offshore drilling that won't happen without support from the federal government, the province and aboriginal communities.

Environmentalists have vowed to fight any attempt to end the ban in what they describe as an earthquake-prone region, with a biologically rich marine environment.

Haida Indians from the Queen Charlotte Islands are also opposed to drilling before a native land claim is settled.

The 4 million acres of Hecate Strait, south of the Alaska panhandle, is estimated to hold about 10 billion barrels of oil and 42 trillion cubic feet of gas, which could be worth C$100 billion to British Columbia, generating C$4 billion in government revenues.

Bush thinks two pipelines may be needed to speed Arctic gas development

President George W. Bush, while preferring a pipeline from the Arctic through U.S. territory, said the best answer might be two pipelines to get North Slope and Mackenzie Delta gas to market as quickly as possible.

"The quicker the better," he said of proposals to develop northern gas. "To the extent that it would be an American pipeline, a pipeline on American soil would make it easier for me politically. Nevertheless, I am a practical man. I want the gas here."

Speaking to foreign journalists Tuesday at the White House, he said the huge Arctic reserves justify either line. "There are perhaps enough reserves to justify an Alaska pipeline," Bush said. "I know there's enough reserves to justify a Canadian line. It's conceivable we could have both, that would feed both the Midwestern market and Western market."

Bush is scheduled to meet privately with Canadian Prime Minister Jean Chretien during a G8 summit in Genoa, Italy, this weekend to discuss energy, U.S. and Canadian officials said. Chretien has been strictly neutral on the pipeline route, although he has raised the issue of developing Mackenzie Delta gas in recent talks with Bush.


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