NEWS BULLETIN

July 27, 2007 --- Vol. 13, No. 68July 2007

Shell and AEWC agree on conflict avoidance measures

After several months of negotiation Shell and the Alaska Eskimo Whaling Commission have signed a conflict avoidance agreement for Shell’s planned 2007 drilling program in the Beaufort Sea.

Shell wants to drill three exploration wells in its Sivulliq prospect, formerly Hammerhead, in western Camden Bay. But North Slope subsistence hunters have been concerned that noise from the drilling operations will drive bowhead whales away from their normal migration paths, thus disrupting the subsistence whale hunt.

Under the agreement, Shell will only move one of its two Beaufort Sea drillships, the Frontier Discoverer, into the Sivulliq area until the fall Cross Island whale hunt is over. The Frontier Discover will cease drilling operations on Aug. 25, move out of the Sivulliq area within two days and return with the Kulluk drillship after the end of the hunt.

“We are very glad that Shell has decided to recognize the risks to our bowhead whale resource, our bowhead whale subsistence hunt and the lives of our hunters,” said Harry Brower Jr., chairman of AEWC. “… We are facing many changes, especially from oil and gas, so we have to work together to protect our subsistence resources and our way of life.”

“Shell appreciates the considerable effort the Alaska Eskimo Whaling Commission has made in joining us to create a comprehensive plan of communications, mitigation and cooperation in the 2007 Conflict Avoidance Agreement,” Shell spokesman Curtis Smith told Petroleum News July 27. “Shell believes this agreement assures we are taking all reasonable precautions to avoid conflicts with subsistence activities vital to the people of the North Slope. We will work together to enable efficient oil and gas activity to take place while prioritizing the preservation of the Beaufort Sea marine mammal and hunting areas for the subsistence communities.”

The conflict avoidance agreement forms a major and critical piece of the complex jigsaw puzzle of permits and agreements that Shell needs to start its drilling program. However, several other issues remain to be resolved before the company’s Beaufort Sea operations can begin. The commissioner of the Alaska Department of Natural Resources has yet to rule on a determination that Shell’s Beaufort Sea program is consistent with the Alaska Coastal Management Plan. Certification of ACMP consistency is essential for final approval by the Minerals Management Service of Shell’s exploration plan, oil discharge prevention and consistency plan and any drilling permits that the company might require.

The North Slope Borough and several environmental organizations have appealed the air quality permits for the drilling operations. And the U.S. Court of Appeals for the 9th Circuit has placed a temporary hold on drilling, until after an Aug. 14 hearing that relates to an appeal by the North Slope Borough and the Alaska Eskimo Whaling Commission against MMS approval of Shell’s exploration plan. The court is also processing two other appeals against plan approval.

Shell also needs authorizations for the incidental take of marine mammals from the U.S. Fish and Wildlife Service and the National Marine Fisheries Service.


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