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NEWS BULLETIN

June 04, 1998 --- Vol. 4, No. 30June 1998

Chevron, BP renew Kaktovik oil and gas leases with ASRC

Chevron USA Inc. and BP Exploration (Alaska) Inc. said today that they have renewed their lease agreements for the exploration and development of Arctic Slope Regional Corp.’s oil and gas interests in the Kaktovik area of the North Slope, about 100 miles east of Prudhoe Bay.

The leases are on 92,000 acres in the eastern 1002 area of the Arctic National Wildlife Refuge. Chevron, the operator, and BP each have a 50 percent interest in the leases. Terms of the agreement were not disclosed.

The reason the 1984 leases were renewed at this time was because they were “about to expire,” BP spokesman Paul Laird told PNA. “They were 10 year leases that had been extended once. It was time to renew them.” The companies would not disclose the length of the leases except to say that they were “long-term.”

BP and Chevron have no plans “in the foreseeable future” for the Kaktovik leases, said Laird. “No exploration or development is planned ... pending the opening of the coastal plain.”

When asked if BP has plans to step up its ANWR lobbying effort, Laird said no.

“This lease renewal is a re-statement of our belief in the prospectivity of the eastern 1002 area, as well as our belief in the western 1002 area,” said Laird, referring to the U.S. Geological Survey’s recently-released report on the oil and gas resources of the ANWR 1002 coastal plain area which increased the resource estimates for the western 1002 area but decreased the numbers for the eastern part of the coastal plain, declaring it less prospective.

“Basically it was good to see that the numbers had gone up,” said Laird. “That was encouraging, but contrary to some of the analyses coming out of Washington, we didn’t find the conclusion that the oil was spread out in a number of smaller accumulations discouraging. ... The only way we’re ever going to know what is there is to drill wells. It’s great to hypothesize ... but at the end of the day, the only way you’re going to know how much oil is there is to drill wells.

“The USGS did not have sufficient data to substantiate the conclusion, or to justify the conclusion, that most of the potential is in the western 1002 area,” said Laird.

The only well ever drilled onshore in the ANWR coastal plain area was the Chevron/BP KIC well No. 1 that was drilled in 1984-85. The well’s results have not been disclosed and were not part of the data analyzed by USGS in its most recent survey.

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