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May 06, 2009 --- Vol. 15, No. 43May 2009

Shell withdraws its Beaufort Sea plan of exploration

Shell announced today that it is withdrawing its 2007 to 2009 plan of exploration for its Beaufort Sea leases.

“Over the last three years, Shell’s Beaufort Sea drilling objectives have become more focused with the acquisition and analysis of additional seismic data,” said Pete Slaiby, Shell’s Alaska general manager, in announcing the plan withdrawal. “As a result, the 2007-2009 plan no longer represents Shell’s current drilling approach. …We have listened closely to stakeholders and particularly the concerns around the size and pace of exploration plans, and we have adjusted our plans accordingly.”

Because of an unresolved appeal in the U.S. Court of Appeals for the 9th Circuit against U.S. Minerals Management Service approval of the plan, Shell has not been able to carry out any of the offshore exploratory drilling that the 2007 to 2009 plan specifies. Shell says that it will now file a new exploration plan for 2010, a plan that will “reflect Shell’s current drilling plans for Camden Bay,” while also addressing the concerns about the pace of Arctic drilling, as expressed by North Slope stakeholders.

The new plan, reduced in scope from the withdrawn plan, will include a one-year drilling program, rather than a three-year program; will involve the use of one drilling rig, rather than two; and will envisage the drilling of two wells rather than four. The Frontier Discoverer drillship that Shell plans to use for the drilling will be fitted with new air emissions technology.

“It’s my hope this new program will further prove to North Slope stakeholders that Shell values their feedback and respects their ideas and concerns,” Slaiby said. “Our new plan of exploration makes every effort to address North Slope concerns and we are looking for support on this approach.”

See story in May 10 issue, available online at noon, Friday May 8 at www.PetroleumNews.com

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