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Conoco forging ahead with Arctic drilling plans for summer of 2014

Alex DeMarban
The South Barrow #1 well, the first test well drilled in Alaska's north slope. August 28, 2012
Loren Holmes photo
A cemetery in Wainwright. August 28, 2012
Loren Holmes photo
A gallon of orange juice in Barrow is $17.65. Food prices are even higher in smaller Alaskan arctic communities. August 28, 2012
Loren Holmes photo
Kids play on a gravel pile in Wainwright. August 28, 2012
Loren Holmes photo
Shell Oil's helicopter hangar, at right, dwarfs the U.S. Coast Guard's rented hangar at the Barrow Airport. August 28, 2012
Loren Holmes photo
The entirety of the U.S. Coast Guard's terrestrial operations in Barrow consist of this small rented hangar at the Barrow airport. August 28, 2012
Loren Holmes photo
The communications equipment at the U.S. Coast Guard's Barrow headquarters. The Coast Guard is using a rented hangar this summer. August 28, 2012
Loren Holmes photo
The village of Wainwright is the closest community to Shell Oil's offshore leases in the Chukchi Sea, and is the site of increased activity and attention. August 28, 2012
Loren Holmes photo
The village of Wainwright is the closest community to Shell Oil's offshore leases in the Chukchi Sea, and is the site of increased activity and attention. August 28, 2012
Loren Holmes photo
The village of Wainwright is the closest community to Shell Oil's offshore leases in the Chukchi Sea, and is the site of increased activity and attention. August 28, 2012
Loren Holmes photo
Kids play in Wainwright, the closest community to Shell Oil's offshore leases in the Chukchi Sea. The village has been the site of increased activity and attention this summer. August 28, 2012
Loren Holmes photo
The village of Wainwright is the closest community to Shell Oil's offshore leases in the Chukchi Sea, and has been the site of increased activity and attention this summer. August 28, 2012
Loren Holmes photo
A young Barrow resident peeks out from their home. August 28, 2012
Loren Holmes photo
The village of Wainwright is the closest community to Shell Oil's offshore leases in the Chukchi Sea, and has been the site of increased activity and attention this summer. August 28, 2012
Loren Holmes photo
An informational sign in a Barrow bus. August 28, 2012
Loren Holmes photo
Biologists disembark from an Olgoonik Corp. transport vessel on Aug. 30, 2012.
Loren Holmes photo
Participants in the Arctic Tour experience a summer snowstorm while on the tundra in Barrow. August 28, 2012
Loren Holmes photo
Shell Oil's Chukchi Sea oil response facility, located in Wainwright. August 28, 2012
Loren Holmes photo
The whale bone sculpture in Barrow's Browerville neighborhood frames a ship. Alaska's arctic has seen a marked increase of ship traffic this season. August 28, 2012
Loren Holmes photo
Welcome to the village of Wainwright, where there's a new gravel pad around every corner. August 28, 2012
Loren Holmes photo
A permafrost freezer in Barrow. The permanently frozen ground is a challenge for house and road constructors, but helpful for preserving meat. August 28, 2012
Loren Holmes photo
The village of Wainwright is the closest community to Shell Oil's offshore leases in the Chukchi Sea, and has been the site of increased activity and attention this summer. August 28, 2012
Loren Holmes photo
A barge loading material in Barrow. The most northern city in the U.S. doesn't have any deep water port. August 28, 2012
Loren Holmes photo
Drugs are a huge problem in rural Alaska, including the village of Wainwright, pictured here. August 28, 2012
Loren Holmes photo

ConocoPhillips isn't backing away from plans to punch up to two holes in the Arctic Ocean seafloor in 2014, even though its partner developed a case of cold feet after watching Royal Dutch Shell's fitful efforts in the treacherous region. 

Shell, despite a summer of blunders, weather delays and other issues, recently became the first company in two decades to punch a hole in the ground beneath those waters off Alaska's northern coastline. After recently launching preliminary work in the Chukchi Sea off Northwest Alaska, Shell announced Wednesday it had begun preliminary well work at a second site off Northeast Alaska. Drilling into oil-bearing zones could happen next year for Shell, after years of preparation, legal challenges and other delays cost the company nearly $5 billion.

Conoco hopes to follow in Shell's footsteps in the remote Chukchi, at the so-called Devil's Paw prospect about 120 miles west of Wainwright village. The 50 tracts there, part of a 2008 lease buy in the Chukchi that saw Conoco plunk down a half-billion dollars, are southwest of where Shell's Noble Discoverer is now conducting shallow drilling to set the stage for deeper drilling next year.

Conoco visiting Arctic villages

Conoco and Shell worked together during the first round of Arctic Ocean drilling in the 1980s, an exploration era involving discoveries that weren't valuable enough to develop. With crude fetching much higher prices these days, Conoco staked out an area around the old Klondike well drilled by Shell in 1989. Conoco was a co-owner of the well with access to the drilling data. 

As part of its latest plan, Conoco plans to swing through Arctic villages in the coming weeks to share details and hear concerns from local residents, starting with Point Lay on Monday. The meetings are nothing new -- Conoco conducts them twice yearly to hear from villages -- but the Houston-based oil giant could get an earful.

Siikauraq Martha Whiting -- the mayor of Kotzebue where Conoco will meet Wednesday -- said oil companies hoping to explore in the region haven't done enough to work with technical schools and colleges to boost training so residents can land lucrative oil jobs. Also, local organizations, such as tribes and Alaska Native corporations, should be allowed to work more closely with the companies to ensure that adequate spill-response equipment comes to the region, she said.

Whiting is hopeful things will change as the projects move forward. She wants communities to share revenues from oil production, too, even though the leases are deep in federal waters. 

Where's the benefits?

"We see a lot of potential resource development activity, and we don't see the benefit we deserve," she said. "We will take all the risk, and when the oil is depleted, the companies will leave." 

Shell's blunders this summer -- including a drill rig that dragged on anchor in Dutch Harbor and damage to the oil-containment dome Shell needs before it can drill into oil-bearing zones -- have heightened fears the exploration will cause a spill that kills seals, whales and other local foods, she said. "It's imperative that we be involved."  

Conoco is reworking its latest exploration plan at Devil's Paw after federal regulators requested the company provide additional information to a proposed plan submitted in March.

In general, Conoco hopes to develop multiple fields holding more than a billion barrels of oil apiece, according to Conoco's website.        

The company is forging ahead even though Norwegian-owned Statoil announced it would delay drilling for at least a year, until 2015. Statoil holds a minority, 25 percent stake in Devil's Paw. It's waiting to see what happens with Shell's efforts, a cautious approach stemming from the Shell's travails, said Jim Schwartz, a Statoil spokesman. 

Statoil is working on submitting an exploration plan to federal regulators in mid-2013 for a well that could be drilled in 2015, or not, said Schwartz. "No firm decisions have been made" about drilling that year, he added.

Drilling 10,000 feet beneath seafloor

Statoil's decision to sit on the sidelines in 2014 will force Conoco to rethink one portion of its plan. Statoil and Conoco had intended to rely on each other to drill relief rigs in the event of an oil blowout. With that option off the table, Conoco plans to identify another relief-rig when it files a revised exploration plan, said Natalie Lowman, a Conoco spokeswoman. She couldn't say when that plan will be filed.

An old draft exploration plan filed by Conoco last year stated the company plans to use a jack-up rig that can rise above the ocean water on retractable lattice legs, reducing threats posed by stormy seas or rogue ice sheets, such as the massive one that delayed Shell's preliminary drilling in the Chukchi one day after it began.

The drilling could extend some 10,000 feet beneath the seafloor, with water depths averaging about 140 feet. The draft exploration plan makes no mention of bringing a containment dome to the region, like the extra safety measure Shell has proposed. But spill-prevention measures include having a pre-positioned capping device that can slash through pipe to close off a spill on hand, as well as a blowout preventer sitting on the drilling rig.

Resistance could also flare up in Point Lay, an Inupiat village about 90 miles south of the drilling prospect.

Misty Plymale, tribal administrator, said she opposes offshore drilling because the noise and potential contamination endanger wildlife and therefore the subsistence-hunting traditions that elders want to pass on. "My personal opinion? Chill the drills," she said.  

Conoco's meetings are set from 5:30-8:30 p.m. in Point Lay community center on Monday; Wainwright's community center Tuesday; Kotzebue Nullagvik Hotel on Wednesday; Point Hope's community center Thursday, and Barrow's heritage center on Nov. 5.

Contact Alex DeMarban at alex(at)alaskadispatch.com