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US MMS Announces Chukchi Sea Oil, Gas Lease Sale For Feb 6

1-2-08 5:57 PM EST
http://news.morningstar.com/news/ViewNews.asp?article=/DJ/200801021757DOWJONESDJONLINE000654_univ.xml&Cat=IndSect


WASHINGTON -(Dow Jones)- The U.S. Minerals Management Service announced Wednesday the final notice for an oil and gas lease sale in the Chukchi Sea off the northwestern Alaskan coast.

The Chukchi Sea - considered one of the last frontiers of oil and gas exploration provinces in the U.S. - is estimated to hold 15 billion barrels of recoverable oil resources. The lease sale - to be held Feb. 6 - is the first in more than two decades in the sea, and includes royalty suspensions on production subject to price thresholds.

Conservation groups have condemned the lease sale because of the environmental sensitivity of the region, saying exploration could disturb subsistence living by natives.

However, MMS Director Randall Luthi said the lease rules establish "a good balance, and will allow companies to explore this intriguing frontier area while still protecting the resources important to the coastal residents.

"All leases will be subject to MMS's existing regulations that include extensive requirements for safety, drilling operations, and pollution prevention, plus regulations of other agencies protecting marine mammals, endangered species and air and water quality," Luthi said in a statement.

Royal Dutch Shell PLC (RDSA), is among the petroleum majors that have expressed interest in drilling in the area.

The Chukchi Sea Sale 193 area contains about 29.7 million acres offshore Alaska from north of Point Barrow to northwest of Cape Lisburne. The sale area extends from about 25 or 50 to 200 miles offshore.

-By Ian Talley, Dow Jones Newswires; 202-862-9285; [e-mail]