Dez Loreen
Northern News Services
Monday, July 23, 2007

TUKTOYAKTUK - A $585 million petroleum exploration bid in the Beaufort Sea is a hefty gamble for two of the North's biggest oil players.

Imperial made the bid, sharing the cost with partner ExxonMobil, who anted up $292 million, giving the two companies sole exploration rights to the region. The exploration bid is the largest ever made in the NWT.

According to Imperial Oil spokesperson Gordon Wong, each company must spend at least half of what they brought to the table if they choose not to develop in that area.

"Imperial Oil's commitment is $73 million."

Wong added that the area of interest is 120 kilometres northwest of the Mackenzie Delta.

"The water depth ranges from 60 metres to 1,200 metres," he said.

Wong would not clarify why Imperial Oil has such interest in the region, other than to explore for possible resources.

"We are pleased to get the bid on exploring, but we still have to make detailed planning in the area," he said.

Wong added that a lot of work needs to be done, now that the company has won the bid.

The winning exploration bid was announced last week by the Department of Industry, Tourism and Investment.

Minister Brendan Bell said the territorial government is enthusiastic about the multi-million dollar bid.

"Petroleum resource development is important for the territories."

Bell added that the NWT holds many resources for those willing to look for them.

"We know that geographically speaking, we live in a beautiful land, whether it be onshore or offshore. This bid further supports that," he said.

"If the companies involved are looking for either oil or gas, their bid speaks volumes behind what we have to offer."

The impact that the exploration will have on the region will be huge, said Bell.

"This must be the most amount of money ever spent on one parcel of land."

When asked how the government felt about selling the exploration rights for half a billion dollars, Bell said, "This has exceeded our expectations and we are pleasantly surprised."

Another Imperial Oil's spokesperson, Pius Rolheiser, said the bid is not connected to the proposed Mackenzie Valley pipeline.

"These are two totally different matters," said Rolheiser.

"The Mac project is independent, while this latest bid is a long-term strategic addition to Imperial's portfolio," he said.

Rolheiser added that while the Mackenzie Valley pipeline will continue to develop onshore resources, this Beaufort Sea bid will expand Imperial's presence in the North.

"The acquisition of this licence will almost double our net holdings in the North," said Rolheiser.

"The only connection between the two projects is that they are in the same part of the world."

Rolheiser said that even though the company has set its bid, it doesn't guarantee development.