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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 finalized 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 use one of its two Beaufort Sea drillships, the Frontier Discoverer, until the whale hunt is over. And Shell will move the Frontier Discoverer out of the area of the Cross Island whale hunt within two days of Aug. 25.

“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,” Harry Brower Jr., chairman of AEWC, said.

“We thank the AEWC for working with Shell to create a comprehensive plan of communication, mitigation and cooperation,” said Shell spokesman Curtis Smith.

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 Beaufort Sea operations can start. 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 MMS of Shell’s Beaufort Sea exploration plan, oil discharge prevention and consistency plan and any drilling permits that Shell 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 the drilling, until after an Aug. 14 hearing that relates to an appeal by the North Slope Borough and the Alaska Eskimo Whaling Commission against the U.S. Minerals Management Service approval of Shell’s exploration plan. The court is also processing two other appeals against the 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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