U.S. offshore regulator allows suspension of Beaufort Sea leases

U.S. Bureau of Safety and Environmental Enforcement (BSEE) has approved suspensions of operations on Arctic Slope Regional Corporation Exploration’s (AEX) 20-lease Taktuk unit and one additional lease, in the Beaufort Sea, in order to conduct an environmental analysis.

AEX is a subsidiary of Arctic Slope Regional Corporation which represents the business interests of the Arctic Slope Iñupiat.

The BSEE said last Friday that it suspended operations on AEX’s leases, located in the Camden Bay area of the Beaufort Sea, approximately 8-25 miles off of the northern shore of the Alaska North Slope.

The leases were obtained by AEX from Shell in late 2016. Nineteen of the 21 leases were scheduled to reach the end of their primary terms during the second half of 2017.

Scott Angelle, BSEE Director, said: “BSEE cares about the Arctic environment and is actively working with our Alaskan Native Partners by taking a thoughtful and balanced approach to oil and gas operations in the Arctic. After a thorough review, we determined that AEX has provided reasonable justifications to warrant the suspension of operations approval.

“We are also encouraged that an Alaska Native organization, owned by the Iñupiat people–who care deeply for the Arctic environment and depend on a subsistence lifestyle– is actively engaged in potential offshore exploration on the Outer Continental Shelf.”

BSEE added that the approval of the suspension requests relied heavily on AEX’s appeal to conduct a thorough environmental analysis of its proposed operations in the Beaufort Sea.

As a condition of its approval, BSEE will require AEX to provide written documentation, reports, and other evidence to BSEE on a quarterly basis that clearly demonstrates AEX is meeting or has met the milestones outlined in the reasonable schedule of work.

If BSEE determines the circumstances that justified the suspension no longer exist, that other lease conditions warrant termination, or if AEX fails to satisfy the conditions of approval, the suspension can be terminated.

The bureau said that the next major milestone in the path toward exploration was for AEX to submit an exploration plan. Under the approved reasonable schedule of work, AEX must submit an exploration plan to the Bureau of Ocean Energy Management (BOEM) in 2023.

The Taktuk unit contains two historical exploration wells, Hammerhead #1 and Hammerhead #2, which were drilled in 1985 and 1986, respectively. Union Oil Company drilled the two exploratory wells.

Shell re-purchased many of the original previously leased areas again in 2005. In 2006, Shell submitted an exploratory program that proposed drilling four wells (Sivulliq N and Sivulliq G and Torpedo H and Torpedo J). In 2012, Shell began drilling Sivulliq N but due to delays and challenges the company was only able to drill a portion of the well before the program was canceled.

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