April 11, 2002 --- Vol. 8, No. 39April 2002

BLM finalizes unitization, other regulations for NPR-A leases

The U.S. Bureau of Land Management said today that it has published a final rule in the Federal Register on oil and gas unitization, suspensions and subsurface-storage agreements in the National Petroleum Reserve-Alaska, adding provisions to existing NPR-A oil and gas regulations.

"The final rule, which implements recent changes in a law that governs oil and gas activities in the NPR-A, complements existing oil and gas leasing procedures in NPR-A," said BLM Director Kathleen Clarke.

"Under this rule, companies operating in the NPR-A will be able to unitize their oil and gas leases. Unitization maximizes production while minimizing the environmental impact of development," Clarke said.

The agency said unitization allows several lessees to share risk and costs and also allows two or more leases to produce using fewer wells, reducing the size of the drilling area and the drilling impacts to the environment.

BLM said lease suspensions allow much-needed time to plan for development and construction of activity by stopping the clock under circumstances that are beyond the control of the operator or to allow for construction of a transportation system.

The subsurface storage agreements will assist production in the NPR-A by allowing operators, for a fee, to store oil or gas in existing geological structures rather than in above-ground tanks while waiting for distribution.

Polar Discovery to be christened Saturday

Polar Tankers Inc. said today that it will unveil its third Endeavour class double-hulled tanker, the Polar Discovery, at a Saturday christening ceremony at the Northrop Grumman Ship Systems Avondale shipyard in New Orleans.

Phillips Petroleum Co., parent of Polar Tankers, is building five Endeavour class tankers. Cost of the Polar Discovery is $168 million.

Phillips said the Endeavour class tankers, also known as the Millennium class, are the first crude-oil carriers being built for the Alaska trade in compliance with the federal Oil Pollution Act of 1990. The first tanker, the Polar Endeavour, arrived in Valdez, Alaska, on its maiden voyage in July 2001.

The Polar Discovery will join the Polar Tankers fleet in 2003.

The Polar Resolution will enter the Alaska trade this summer.

The Polar Adventure will be delivered in late 2004 and the fifth ship, the Polar Enterprise, in 2005.

Kevin Meyers, executive vice president of Alaska production and operations for Phillips Petroleum and president of Phillips Alaska, said: "These five Endeavour class tankers demonstrate Phillips' commitment to protect the environment while providing reliable energy for America. Alaska is one of Phillips' legacy assets, and we plan to maintain daily production there at 375,000 to 400,000 barrels-of-oil-equivalent for the foreseeable future."

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