Regulators Say Chukchi Sea Leases Are OK

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A new study from the U.S. Bureau of Ocean Energy Management, Regulation and Enforcement, the federal agency that oversees offshore drilling in U.S. waters, said leases sold in Alaska's Chukchi Sea are valid and that drilling can commence in the region in an environmentally responsible fashion. The leases were originally sold in 2008.

The news could be a boon for Royal Dutch Shell (RDS-A), Europe's largest oil company, which has committed $3.5 billion to drilling in the Beaufort and Chukchi Seas, but has thus far been unable to actually start those projects due to regulatory hurdles. Shell had hoped to commence drilling in the area this year, but has since pushed those plans back to 2012.

Any scientific or other information that was missing from earlier environmental impact statements is either not necessary or too costly to make it worth obtaining at this time, BOEMRE said in its report, the Alaska Dispatch reported. The study said it could take up to 74 days for a relief well to be put in place in the event of a major spill in the region.

BOEMRE puts recoverable oil reserves in the Chukchi at 12 billion barrels, possibly as much as 29 billion barrels, and gas reserves of 76 trillion cubic feet, maybe even as much as 209 trillion cubic feet, the Dispatch reported. Shell is looking to drill up to six wells in the Chukchi Sea.