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NEWS BULLETIN

February 21, 2007 --- Vol. 13, No. 15February 2007

MMS approves Shell’s Beaufort exploration plan

In a letter dated Feb. 15, the U.S. Minerals Management Service approved Shell’s 2007-2009 drilling plan in the Beaufort Sea outer continental shelf.

In an environmental assessment of the company’s exploration plan, which involves 12 possible locations for “geophysical surveys, exploration and appraisal drilling,” MMS said its analysis found that Shell’s plans would not cause “undue or serious harm or damage to the human, marine or coastal environment.”

The agency’s approval, which is already receiving protests from environmental groups, was subject to 12 conditions, most of which involve the protection of wildlife in the region and include an approved “application for permit to drill.” A APD can’t be approved until the exploration plan has been deemed consistent with the State of Alaska Coastal Management Program (see Feb. 19 news bulletin).

Prior to the National Marine Fisheries Service open water meeting in April, Shell must also submit to MMS the final version of the 2007 conflict avoidance agreement with the Alaska Eskimo Whaling Commission and the Whaling Captains Associations of Kaktovik, Nuiqsut and Barrow.

In a separate letter, also dated Feb. 15, MMS approved Shell’s Beaufort Sea Regional Exploration Oil Discharge Prevention and Contingency Plan. The approval was subject to 22 conditions.

MMS said it will require Shell to conduct an equipment deployment exercise and an incident management team tabletop exercise to demonstrate the company’s ability to carry out the offshore response tactics described in the contingency plan. The agency said a 2007 mutual aid drill planned for Sept. 5 by Alaska Clean Seas will meet MMS’ needs for the Shell near-shore response tactics demonstration.

Shell’s 2007 drilling activities, which include four wells, will occur approximately 16 miles north of the Point Thomson unit.

Pioneer plans two wells at Cosmopolitan

Pioneer Natural Resources Alaska has told the Alaska Department of Environmental Conservation that it plans to drill two wells at its Cook Inlet Cosmopolitan prospect, beginning this summer.

Pioneer has applied for renewal of an oil discharge prevention and contingency plan.

The company told DEC the wells would be drilled in the summers of 2007 and 2008 from the onshore Hansen well site on the Kenai Peninsula some six miles north of Anchor Point as sidetracks from the existing well which was drilled in the autumn and winter of 2001-02.

Pennzoil found oil and gas at the prospect in 1967 drilling from a jack-up rig.

A third plan of exploration, approved in August, called for a well to be drilled beginning on or before Nov. 14, 2007. Phillips Alaska (now ConocoPhillips Alaska), the previous operator at Cosmopolitan, drilled the Hansen 1 and a sidetrack, the Hansen 1A.

Note: See full stories in the Feb. 25 issue of Petroleum News, which will be available online at noon Alaska-time on Friday, Feb. 23, at www.PetroleumNews.com

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