Alaska’s Arctic Slope Regional Corporation (ASRC) and six North Slope village corporations have joined together to create a new company known as the Arctic Inupiat Offshore, LLC (AIO).
AIO and Shell Gulf of Mexico Inc. (Shell) have entered into a binding agreement that will allow AIO the option to acquire an interest in Shell’s acreage and activities on its Chukchi Sea leases.
This interest will be managed by AIO. AIO members include ASRC, Ukpeaġik Inupiat Corporation, Tikigaq Corporation, Olgoonik Corporation, Kaktovik Inupiat Corporation, Atqasuk Corporation and Nunamiut Corporation.
These corporations represent the communities of Barrow, Point Hope, Wainwright, Kaktovik, Atqasuk and Anaktuvuk Pass.
Rex A. Rock, Sr., president and CEO for ASRC, will also serve as the president for AIO.
Rock commented, “Our region has always been a leader in strategic partnerships that provide meaningful benefits to our shareholders, to our people.” Rock further stated, “I am humbled to acknowledge that this arrangement balances the risk of OCS development borne by our coastal communities, with the benefits intended to support our communities and our people.”
Through this option agreement, Shell would assign to AIO an overriding royalty interest in oil and gas produced from specific Chukchi Sea leases. In addition, AIO would have the option to participate in project activities by acquiring a working interest at the time Shell makes the decision to proceed with development and production. Shell and AIO will hold quarterly meetings to exchange information and address regional and development issues.
Sen. Murkowski applauds
U.S. Sen. Lisa Murkowski, R-Alaska, applauded the joint-venture agreement between Shell Oil and Arctic Inupiat Offshore (AIO) – a new company formed by Arctic Slope Regional Corporation with several North Slope native village corporations – which gives native-owned AIO the option to acquire a working interest in Chukchi Sea oil and gas development.
“Shell’s decision to invest in the future of the region and its people should be applauded,” Murkowski said. “This announcement ensures that the people of the North Slope Borough share directly in the oil and gas bounty off of their coast. It also gives locals a say in what happens near their communities. I think that’s a wise decision on Shell’s part.”
Shell has invested nearly $6 billion in leases and exploration in the Chukchi and Beaufort seas off Alaska’s northern coast. The company is preparing to continue drilling exploratory wells in the Chukchi next summer.
The Arctic holds 13 percent of the world’s undiscovered oil reserves, and 30 percent of undiscovered natural gas deposits, so the potential for Alaska is immense. Arctic waters off Alaska’s northern coast contain an estimated 30 billion barrels of oil and 221 trillion cubic feet of natural gas, according to the federal government.