UPDATE 1-ConocoPhillips, Shell to expand Alaska drilling
* Exploration can proceed after U.S. drilling expansion
* Shell's Odum says company can begin exploring in 2010
* Shell spent $2.1 billion for Chukchi Sea leases in 2008
* ConocoPhillips spent $506 million on leases
(Recasts with details from Shell; adds byline)
By Kristen Hays
HOUSTON, March 31 (Reuters) - Oil companies with their
sights on drilling for oil off Alaska on Wednesday said
President Barack Obama's offshore oil announcement allows them
to press ahead with big projects there.
Two companies -- Royal Dutch Shell (RDSa.L) and
ConocoPhillips (COP.N) -- have spent large sums to secure
drilling rights in the remote Chukchi Sea, only to see their
plans put on hold by court challenges.
Marvin Odum, president of Shell Oil Co, Shell's U.S. arm,
said Obama's plan clears the way for the company to begin
exploration drilling this year off Alaska's northwestern
coast.
"This is actually good news for us in Alaska. It's
certainly something we've been looking forward to," Odum said
at a news conference on Wednesday announcing the startup of the
company's Perdido oil and gas platform in the Gulf of Mexico.
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Shell is the largest leaseholder in the Chukchi and
Beaufort seas off the north shore of Alaska, which could be
home to some of the most prolific, undiscovered U.S.
hydrocarbon basins.
Shell spent $2.1 billion for Chukchi Sea leases in 2008,
and ConocoPhillips, the third-largest U.S. oil company, spent
$506 million for its Chukchi leases the same year.
ConocoPhillips spokesman John Roper said Obama's plan
allows the company to proceed after a U.S. appeals court ruling
last year ordered an environmental review of Chukchi and
neighboring Beaufort areas.
"Our understanding is that today's announcement means
exploration and development of existing Chukchi and Beaufort
leases can proceed," Roper said.
The company's initial exploration of Chukchi leases is
slated for the summer of 2012, Roper said. ConocoPhillips has
spent tens of millions of dollars on environmental studies.
In January Statoil, (STL.OL) Norway's government-owned oil
and gas company, bought a 25 percent interest in
ConocoPhillips' Chukchi leases. Statoil also has 16 leases
there.
The Obama administration's plan said exploration drilling
in leased areas could begin as early as this summer. However,
the plan nixed four future lease sales in the current 2007-2012
plan.
Odum was nonchalant about the removal of those lease
sales.
"That's acceptable because there are quite a few leases
already," he said. "We have plenty of work to do for a couple
of years to execute that program."
The Chukchi, between northwest Alaska and northeastern
Siberia, is believed to hold 15 billion barrels of recoverable
oil and 76 trillion cubic feet of natural gas, according to
U.S. government estimates.