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Vol. 14, No. 1 Week of January 04, 2009
Providing coverage of Alaska and northern Canada's oil and gas industry

Oil Patch Insider: Point Thomson talks end on positive note; Neufeld lands seat on Canada’s gravy train

State of Alaska officials and the former leaseholders of the Point Thomson unit reportedly ended their 2009 negotiations on a positive note Dec. 31.

A Petroleum News source said ExxonMobil and its majority partners (BP, Chevron and ConocoPhillips) have invited Alaska Department of Natural Resources officials to Houston after the first of the year to review the technical information behind the companies’ proposed development plan for the eastern North Slope Point Thomson unit.

State officials were, the source said, receptive to making the trip. More next week….

—Kay Cashman

B.C. energy minister lands a seat on Canada’s gravy train

Richard Neufeld has been one of the ultimate survivors in Canadian politics. Now he’s headed for one of the greatest rewards in Canadian politics, a seat in the Canadian Senate.

From the Peace River North electorate, he was first elected to the British Columbia legislature in 1991 as a member of the now-defunct Social Credit Party. Then he was re-elected as a member of the also-defunct Reform Party.

Finally, he kept his place in the legislature as a member of the governing Liberal Party in 2001 and was given the energy portfolio by Premier Gordon Campbell.

During his time in cabinet, Neufeld has overseen the most rapid expansion of British Columbia’s oil and natural gas industry, culminating in 2008 with the province harvesting a record C$2.66 billion, more than double the previous benchmark set in 2007, and, for the first time, displacing Alberta as Canada’s land-sales leader by a margin of C$1.7 billion as the industry responded to the emergence of the Montney and Horn River tight and shale gas plays and the British Columbia government’s provision of northern incentives and its refusal to follow Alberta by hiking royalties.

Neufeld, 64, said he had already advised Campbell he would retire from provincial politics before the election this spring, noting he was working an average of about 100 hours a week.

His objective now is to spread the message to other parts of Canada that Western Canada is “very much a leader when it comes to energy of all kinds.”

John Horgan, energy spokesman for the opposition New Democratic Party in the B.C. legislature, said he did not often agree with Neufeld, but had a “lot of respect” for a cabinet minister whose departure will leave a sizeable void in the government, which he said will be short of talent in the energy field.

Unlike the House of Commons, where all members are elected, the Canadian Senate has 105 members named by the Prime Minister and allocated on a provincial basis.

Senators are eligible to serve until they turn 75 in what is regarded as one of the great sinecures of Canadian political life. They receive a base salary of C$130,400, plus extra remuneration for filling positions such as committee chairs; C$20,000 in annual travel and living expenses, plus 64 return trips per year anywhere in Canada by plane or train, with the option of designating someone else to use the travel options; and C$149,400 to set up an office, hire staff and conduct research.

—Gary Park

Navy Times reports Coast Guard may get new Arctic policy

On Dec. 30 the Navy Times reported that the U.S. Coast Guard may get a new Arctic policy in 2009.

While the news doesn’t come as a surprise to those of us who follow Arctic politics, it is a reminder that the comprehensive report Congress ordered from the Coast Guard on its ability to meet polar operations mission requirements is expected to be released “in the near future,” per an October statement by Lt. Cmdr. Anthony Russell, Commandant Adm. Thad Allen’s spokesman.

Allen, who took command of the Coast Guard in 2006, has emphasized the importance of the Arctic, saying the melting of the ice caps — and the resultant opening of shipping routes in the polar region and increased oil and gas exploration — are taxing the service’s fleet.

With only two aging, operational icebreakers in service, the United States is falling behind other nations competing for the same territory.

For example Russia, which symbolically claimed the Arctic seafloor in mid-2007, has 20 icebreakers and is building a new fleet of nuclear-powered icebreakers.

Navy Times reporter Amy McCullough said the Coast Guard’s report is expected to outline both what the service’s new responsibilities should be and what equipment will be necessary to complete the mission.

In September, Senate Democrats introduced a $56.2 billion economic recovery package that included $925 million for a new polar icebreaker, but Senate Republicans killed the bill.

The Coast Guard has said it would take at least eight to 10 years for the first new polar icebreaker to enter service.

—Kay Cashman

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