Bloomberg News

Shell Permits Would Help U.S. Keep Pace in Arctic, Salazar Says

June 05, 2012

The U.S. is considering final permits letting Royal Dutch Shell Plc (RDSA) explore for oil in the Arctic Ocean as the nation seeks to keep pace with Russia, Norway and Canada, Interior Secretary Ken Salazar said.

Shell is closer to drilling as many as five wells in the Beaufort and Chukchi seas this year, after agreeing to build an oil-spill containment system and add precautions to protect native Alaskans and animals such as polar bears and walrus. Federal waters off Alaska’s coast may hold 26.6 billion barrels of oil, according to a 2011 assessment from the Interior Department.

“We know Russia is moving forward with a very significant exploration program,” Salazar said today at a conference in Washington. “We know Canada has a huge interest in what’s happening in the Arctic, and they are planning on moving forward. We are not to be left behind.”

Shell is waiting for the Bureau of Safety and Environmental Enforcement to approve its offshore drilling permits. Federal agencies such as the Environmental Protection Agency and the U.S. Fish & Wildlife Service have approved The Hague-based company’s plans, making it more likely Shell will be drilling on leases it purchased in 2005 and 2008.

“If the decision is made to move forward, and if the wells are drilled there, our view is that, yes, it will be done with all the safety precautions,” Salazar said.

Statoil ASA (STL) and Eni SpA (ENI) struck oil and gas in the Skrugard prospect, off the coasts of Norway and Russia in the Barents Sea, in April 2011, and said the discovery has as much as 250 million barrels of recoverable reserves. Statoil, based in Stavanger, Norway, also holds leases in the U.S. Arctic region.

To contact the reporter on this story: Katarzyna Klimasinska in Washington at kklimasinska@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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