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Page added on August 1, 2010

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Imperial, Exxon, BP form Arctic Canada venture

Business

The partners will not start exploratory work on the acreage until after Canada’s National Energy Board completes its review of offshore safety and environmental impact, Wong said.

When the NEB announced the review in May, it canceled a planned hearing on a request from BP and Exxon to reexamine a requirement that Arctic drillers need to drill a relief well in the same season that an exploratory well is completed.

There is no date yet for when the review is to begin, a spokeswoman for the NEB said.

In May, Bruce March, Imperial’s chief executive, said he did not expect to drill a well on the company’s Beaufort acreage for four or five years. The company has not drilled a well there since 1989-90.

Imperial and Exxon Mobil acquired the Beaufort acreage license, called EL446, in 2007 for C$585 million ($568 million), a price that raised eyebrows in the energy industry at the time.

The following year, BP acquired EL449, its contribution to the venture, as part of a C$1.2 billion acquisition of Arctic exploration blocks.

This month, BP agreed to sell its Canadian natural gas operations to Apache Corp (APA.N) as part of a $7 billion deal to raise funds to pay for the U.S. Gulf spill, but its Arctic holdings were not part of that transaction.

Imperial is the lead partner in the C$16.2 billion Mackenzie gas pipeline project, which is expected to receive a go-ahead decision from the NEB in September. The pipeline would run from the Beaufort Sea to existing lines in northern Alberta.

Communities in Canada’s Far North have been anticipating the long-delayed gas pipeline for its potential to trigger more economic development.

Construction of the Mackenzie project could kick-start more Beaufort Sea exploration, analysts and local officials have said, as the line could be used to transport gas to markets.

However, Mackenzie is not expected to start up before 2018, assuming regulatory and corporate approval.

reuters.com



One Comment on "Imperial, Exxon, BP form Arctic Canada venture"

  1. KenZ300 on Mon, 2nd Aug 2010 1:56 am 

    If these energy giants invested a small portion of their wealth in alternative energy the sector would grow exponentially and their business would begin to diversify.

    Even they know that OIL is a limited resource and getting harder and more expensive to find. They have a vested interest in it being in tight supply because the price will go up. As demand from China and India continues to grow demand for oil will exceed the available supply in the next few years causing the price to ramp up and profits to soar.

    They have no interest in seeing alternative energy take hold in a meaningful way.

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