September 30, 2002 --- Vol. 8, No. 100September 2002

ConocoPhillips applies to store rig over summer again at Puviaq

ConocoPhillips Alaska Inc. has applied to build another insulated ice pad to store a drilling rig over the summer near either the Puviaq No. 1 or Puviaq No. 2 exploration well prospects in the National Petroleum Reserve-Alaska. Phillips Alaska (now ConocoPhillips) built an insulated ice pad last year and over summered a rig in this same area.

The company has applications in for an exploration drilling program in the area this winter, with as many as two wells and sidetracks to each well possible at each of the sites over the 2002-04 drilling seasons.

The Corps of Engineers said the 1.5 acre insulated ice pad is proposed in either section 35 township 16 north, range 10 west, Umiat Meridian (the Puviaq No. 1 location) or section 16-T15N-R10W, UM. The Puviaq locations are west of Teshekpuk Lake and south of Smith Bay approximately 67 miles southeast of Barrow.

The drilling rig that may be stored at this site is scheduled to drill at the Puviaq No. 1 and Puviaq No. 2 locations this winter, and if drilling operations are not completed this winter, the company would over summer the drill rig at either site for winter 2003-04 drilling.

The ice pad used to over summer the drilling rig in 2002 will not be used again in 2003.

Northwest Territories premier says federal inaction puts Delta in jeopardy

Northwest Territories Premier Stephen Kakfwi said continued foot dragging by the Canadian government on removing the greatest obstacle to future growth in the Arctic could endanger the C$4 billion plan for developing Mackenzie Delta gas.

He told industry executives in Calgary Sept. 27 there is growing frustration among northern residents that the government has yet to strike a deal on revenue sharing with the Northwest Territories and aboriginals or to offer federal assistance to complete infrastructure in support of the energy project.

Kakfwi said that unless the demands are taken seriously, popular northern backing for the venture could start to evaporate to the point where it stalls or even stops progress at a time when Imperial Oil Ltd. is endeavoring to fast track the scheme. He said the lack of support, investment and action from the federal government is undermining efforts to speed up progress.

"Many of the aboriginal leaders have said we have to start seeing some investment and benefits from this pretty soon ... or the enthusiasm is going to start to disappear,": he warned.

Kakfwi pointed out that 25 years ago the failure of stakeholders to acknowledge the aspirations of the aboriginal community was effectively the undoing of the project and unless the entire northern community can realize some real benefits from development of the Mackenzie Delta there is still no reason to proceed.

He said the territories, which has said it needs C$133 million over four years to build the necessary roads, was told in late September that it would get C$20 million in federal money to facilitate construction of a Mackenzie Valley pipeline. Kakfwi said C$20 million would not even build 15 miles of highway in the territories, which has only 1,300 miles of all-weather road.

The Northwest Territories government has estimated that over the next 20 years existing and proposed oil and gas development and diamond mines could pump C$65 billion into Canada's Gross Domestic Product, creating 270,000 person-years of employment and generating about C$17 billion in royalties and taxes, provided it gets infrastructure improvements.

"If we don't fix the roads, there will be no oil and gas exploration in the future," Kakfwi has said.

A spokesman for Indian Affairs and Northern Development Minister Robert Nault said the issues raised by the Northwest Territories will soon be dealt with by newly appointed federal negotiator on the matter, former Ontario premier David Peterson.

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