NEWS BULLETIN

October 27, 2014 --- Vol. 20, No. 53October 2014

Shell applies for lease extensions

Shell spokeswoman Megan Baldino has confirmed a report that Shell has requested the U.S. Department of the Interior to issue five-year extensions to the company's Alaska Arctic outer continental shelf oil and gas leases.

"The request reflects the extent of the actual delays we have experienced as a result of court decisions and agency actions for the last several years," Baldino said.

Shell returned to Alaska in 2005, with plans to conduct exploration in the state's Arctic outer continental shelf but since then has run into multiple issues relating, in particular, to lawsuits against the government permits that it needs and against the government leasing actions. To date, the company has only succeed in drilling the top-hole sections of two exploration wells, one in the Beaufort Sea and one in the Chukchi Sea. Although a series of issues relating to that drilling, conducted in 2012, appears to have been a prime reason for the company deciding not to drill in 2013, a continuing appeal case challenging the legality of the 2008 lease sale in which Shell purchased its Chukchi Sea leases has caused the continuing postponement of further drilling. Shell is also waiting to evaluate the possible impact on its program of new Arctic offshore drilling safety regulations that the Department of the Interior has yet to release for public comment.

Some of Shell's Beaufort Sea leases expire as soon as 2017. The company's Chukchi Sea leases were issued in 2008 on 10-year terms, but are currently under suspension with no exploration activity allowed, because of the appeal against the 2008 lease sale.

- ALAN BAILEY


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