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Arctic offshore oil and gas joint venture formed
Imperial Oil, ExxonMobil and BP will team up on consultation

Guy Quenneville
Northern News Services
Published Saturday, October 16, 2010

INUVIK - Three oil and gas companies that have purchased the rights to explore two parcels of land in the Beaufort Sea have formed a joint venture meant to streamline their community consultation processes and help them share costs when operating in the Arctic offshore.

NNSL photo/graphic

A marine mammal observer from the Inuvialuit Settlement Region mans his post on the vessel that Imperial Oil staged its 2008 3D acquisition program from in the Beaufort Sea. - photo courtesy of Imperial Oil

Imperial Oil Ltd., ExxonMobil Corp. and BP announced the joint venture in late July.

In 2007, Imperial Oil and ExxonMobil together successfully bid $585 million for Exploration Licence 446, a 205,321 hectare parcel located 120 km from the outermost edge of the Mackenzie Delta.

The next year, Imperial Oil mounted a 3D seismic acquisition program on its parcel.

That same year, BP bid an unprecedented $1.2 billion for another parcel adjacent to Imperial Oil's parcel. In 2009, it conducted its own seismic work.

With Imperial and BP's parcels so close together, a joint venture aiming to avoid duplication of personnel and equipment in the remote Arctic sea makes sense, said Pius Rolheiser, spokesperson for Imperial Oil.

"I think, given the fact that the leases are adjacent to one another – because the ice-free season is always very short – given that both companies share a commitment to environmental protection, to safety – it's an opportunity to optimize the work that we do, to share the financial risk, and also just to basically optimize the work that both companies are doing," said Rolheiser.

He added that discussions between the companies about a joint venture began in 2009.

For residents of the Inuvialuit or Gwich'in settlement regions, the most visible difference in approach among the companies will be the combined community consultations that the three companies will undertake together to discuss their plans for future activity.

"In practical terms, people will see that consultation continue, but it will be on a joint basis rather than Imperial and ExxonMobil coming to visit a community and then later BP coming to visit the community to talk about their separate plans. Beyond that, further exploration plans and decisions have yet to be made," said Rolheiser.

Though Imperial Oil has previously stated a desire to begin producing oil or natural from the Beaufort Sea in 2013, the NEB has placed a moratorium on all Arctic offshore drilling until its review of Arctic offshore drilling regulations review is completed.

"Obviously, further exploratory activities will not and cannot proceed without regulatory approval...the timing of which remains to be seen," said Rolheiser.

Imperial Oil recruited 15 individuals from Aklavik, Paulatuk, Sachs Harbour, Inuvik and Tuktoyaktuk to work as marine mammal observers.

"Speaking on Imperial's behalf, we extend a considerable amount of time and effort in doing exactly that: in recruiting people from ... communities and providing them training and opportunities. We were very pleased with the outcome of that program, and I can certainly see no reason why the joint venture wouldn't look at continuing that," said Rolheiser.

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