|
BP drops out One of the two companies that hold leases in ANWR has discontinued its membership in Arctic Power, saying it does not want to get involved in the upcoming debate Kay Cashman PNA Publisher
BP Exploration (Alaska) Inc. has “discontinued its membership” in Arctic Power, the Anchorage-based association formed to promote drilling in the coastal plain of the Arctic National Wildlife Refuge, BP’s Pat Presley told PNA Nov. 22. Presley heads up the company’s external affairs department.
BP decided “some time ago … to leave the debate of the (ANWR) issue to the American people as we focus our attention on other business opportunities in Alaska. We are not engaged in the public debate and, as such, we are not funding the debate,” Presley said.
In March, BP’s chief executive, Lord John Browne, unveiled a new worldwide policy of not funding political activities or political parties. The announcement was in keeping with BP’s new, greener image which has involved advertising the fact it has changed its focus from oil to gas, has a solar energy subsidiary and has changed its motto to “Beyond Petroleum.”
But BP is not surrendering its lease position in ANWR’s coastal plain where it holds approximately 92,000 acres in equal ownership with ChevronTexaco USA. That acreage includes the KIC well south of the village of Kaktovik. The well was completed by Chevron in 1986; its results are still confidential.
“It’s not a message about ANWR at all,” BP Alaska spokesman Paul Laird told PNA Nov. 25 in regard to the company’s decision to pull out of Arctic Power. “It should not be construed as sending a signal of a lack of interest ANWR or a lack of commitment to the North Slope. … It simply means we are not going to participate in the debate. That decision needs to be made by the American people. When and if they decide ANWR should be opened for exploration and development, we will review that opportunity on the basis of its commercial and competitive attributes.”
No more money The last contribution BP made to Arctic Power was in 2001: “Our dues last year were $50,000. We have not made any contributions this year,” Presley said, although Arctic Power representatives contend another $50,000 from BP was expected as part of its 2002 budget.
Karen Cowart, BP’s representative on Arctic Power’s board, resigned her seat effective Wednesday, Nov. 20, Presley said.
Even though the $50,000 the organization expected from BP is comparatively small portion of its funding, the group was expecting BP’s 2002 dues to help pay staff and other overhead.
“Arctic Power has been working under the impression it would receive the money from BP. They have $50,000 worth of bills, or commitments, they will have to pay, find money for elsewhere,” Roger Herrera told PNA Nov. 25. Herrera is Arctic Power’s coordinator in Washington, D.C.
“These next few months until February when Congress starts back are critical. We especially need money during next few months,” he said.
Timing of the decision BP’s decision to pull its public support comes at a time when Arctic Power is gearing up for what many in the Republican party consider will be its best chance in many years to persuade Congress to open the coastal plain to drilling.
The 19 million-acre refuge in northeastern Alaska is closed to oil and gas exploration, but in 1980 Congress designated the 1002 area — 1.5 million acres along the coastal plain — a study area, to be evaluated for its oil and gas development potential. The resource evaluation, conducted by the Department of Interior, was released in 1987 and recommended that Congress open the coastal plain for oil and gas exploration and development.
In 1995, the U.S. House and Senate approved coastal plain development as part of a balanced budget act, but the entire measure was vetoed by President Bill Clinton.
The House last year passed a bill opening ANWR, but the Democrat-controlled Senate did not. The debate will begin again in 2003, but this time with Republicans in control of the Senate, the House and the White House.
Cheered by environmental group The news of BP’s resignation from Arctic Power was welcomed by Athan Manual of the Washington, D.C.-based U.S. Public Interest Research Group. Manual, director of the group’s Arctic wilderness campaign, called PNA after reading a Nov. 22 PNA news bulletin announcing the withdrawal of BP from Arctic Power.
Manual claimed partial responsibility for BP’s decision, saying U.S. PIRG has been pushing BP to live up to its green image by pulling support for refuge drilling.
Herrera analyzes BP’s decision Herrera, a former BP geologist, does not think the company’s withdrawal from Arctic Power will impact the upcoming debate in Congress; in fact, it was made at a time when, if you can believe Sen. Ted Stevens’ recent comments, legislation to open the refuge to drilling is likely to pass in the first or second quarter of 2003.
BP’s defection will cost the other supporters of Arctic Power — the state of Alaska, ChevronTexaco, Native companies and associations, and the North Slope Borough — but it is unlikely to change the outcome of what happens in Congress in 2003.
“BP knows there is oil there. They negotiated with Bruce Babbitt to see what they could do,” Herrera said, referring to BP’s influence behind the Knowles administration’s attempts to convince the former Secretary of Interior under the Clinton administration to directionally drill into the coastal plain from BP’s Sourdough discovery a few miles west of the coastal plain. Babbitt reportedly agreed with the concept but Clinton administration lawyers shot it down, saying it would have to go in front of Congress and be signed by a president reluctant to publicly support refuge drilling.
“Sourdough is screaming out for political exploitation. … I would have used it to leverage open the 1002 area simply because it proves there is oil under it,” Herrera said.
“They know that. Half the (Sourdough) accumulation underlies the federal acreage to the east (in the coastal plain). They don’t have any seismic on the eastern side of the Canning River; just those old 2-D lines. But they do on the Sourdough side. … There is known oil there. While Sourdough in itself was kind of marginal, double that with the oil in the federal acreage, and you have something,” he said.
But if BP does not tout its Sourdough discovery, which is now part of the Point Thomson unit, the company can pick up the eastern Sourdough acreage as soon as the first coastal plain oil and gas lease sale is held, Herrera said.
“They could bring it onto production (ahead of others) … because the first producer in the coastal plain has an advantage in terms of both facilities and pipeline (control). BP has a hidden gem there, which gives rise to an immediate leasing strategy that probably nobody else can take advantage of,” he said.
| 