Shell exec hopeful for offshore Arctic oil drilling prospects
by Jeff Richardson / [log in to unmask] Fairbanks Daily News Miner

Sep 14, 2011 | 
FAIRBANKS — A Shell executive who oversees exploration in Alaska said
Tuesday he’s “very, very optimistic” the oil giant will begin large-scale
offshore drilling in the Arctic Ocean in 2012.

Pete Slaiby, Shell Alaska’s vice president for exploration and appraisal,
said the company hopes to drill as many as five wells in the Chukchi Sea
and Beaufort Sea next year.

“This is really big,” Slaiby told a crowd at a Greater Fairbanks Chamber
of Commerce luncheon. “It’s really important because of the resources
involved.”

The heightened optimism comes after a summer in which Shell cleared
several key permitting steps. Shell received preliminary approval from
the Environmental Protection Agency for air permits in July, and Slaiby
said final approval could be made within a few days. In August, the
federal Bureau of Ocean Energy Management, Regulation and Enforcement
gave conditional approval to exploration in the Beaufort Sea.

The next step comes in early October, when Interior Secretary Ken Salazar
will decide whether to approve a drilling plan for the Chukchi Sea.
Slaiby said Shell plans to finalize its 2012 offshore drilling plans
later that month.

Slaiby said there’s no guarantee Salazar will give his approval, but he
said Shell has passed enough legal, permitting and environmental tests
that it will ultimately be allowed to proceed.

In some ways, Shell is already moving forward with its plans for offshore
exploration in 2012. Slaiby said drilling resources are being routed to
Alaska from all over the world — including Norway, China, the Gulf of
Mexico and New Zealand — in anticipation of a busy year.

If exploration in the Beaufort and Chukchi does proceed, Slaiby said, the
implications could be huge. He said an estimated 25 billion barrels of
oil is located there, which could mean as much as 700,000 additional
barrels of oil per day flowing through the trans-Alaska oil pipeline.

That would more than double the volume of oil currently in the pipeline,
which would help alleviate low-flow concerns caused by decades of
declining production.

“It’s going to be significant in terms of extending the life of the
trans-Alaska pipeline,” he said.

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