US Lawmaker Pushes For Drilling In Alaska Refuge

- US Lawmaker Pushes For Drilling In Alaska Refuge

Wednesday, September 07, 2011
Dow Jones Newswires
WASHINGTON
by Ryan Tracy

The top lawmaker on the U.S. House Natural Resources Committee Wednesday said opening the Arctic National Wildlife Refuge in Alaska to drilling should be part of a plan to reduce the federal debt.

The comments from Rep. Doc Hastings (R., Wash.) came as a separate committee of 12 lawmakers begins work to find more than $1 trillion in budget savings before a November deadline. The oil and gas industry is also pushing more drilling as a way to boost economic growth.

Proposals to drill in the Alaska refuge have failed in Congress before and are sure to draw opposition from conservation advocates. It is far from clear that the deficit committee, which is already facing a tight deadline to reach a compromise, would consider allowing exploration there as part of a plan to increase revenues.

"We must remember that it's not just about cutting spending," Hastings said. "There's no question that Washington D.C. has a spending problem, but we must also look for new ways to generate revenue without raising taxes."

"For the Joint Committee [of lawmakers working on deficit reduction], which is looking at a 10-year window, this could generate several billions of dollars in new revenue to help meet their goal," Hastings said.

The deficit committee is also expected to consider other ways to increase revenue, perhaps including a plan from Democrats to reduce tax breaks for oil companies. The chairman and chief executive of Chevron, who spoke after Hastings at a public event here, said he opposed oil companies being "singled out" as part of a deficit deal. "If you impose punitive measures on my industry, we will invest less. It's simply the way we go through our decision making process," John Watson said.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Obama Backs Additional Oil Drilling in Alaska, Salazar Says

- Obama Backs Additional Oil Drilling in Alaska, Salazar Says

Tuesday, August 09, 2011
Knight Ridder/Tribune Business News

Interior Secretary Ken Salazar came to Anchorage on Monday and said the Obama administration supports more oil drilling in Alaska, potentially including offshore Arctic development.

Salazar joined Alaska Sen. Mark Begich and Rhode Island Sen. Jack Reed, both Democrats, for a meeting with Alaska businesspeople and said the president's feeling toward Arctic offshore drilling is "Let's take a look at what's up there and see what it is we can develop." But any Arctic oil development must be done carefully, he said. Salazar said the Arctic lacks needed infrastructure for responding to potential offshore oil spills and cited painful lessons from the Deepwater Horizon spill in the Gulf of Mexico last year.

"Not the mightiest companies with multibillion-dollar pockets were able to do what needed to be done in a timely basis, and the representations of preparation simply turned out not to be true from the oil companies that had a legal obligation to shut down that kind of an oil spill. ...

When you look at the Arctic itself, we recognize that there are different realities - the ocean is a much shallower ocean, conditions are very different than we had in the Gulf of Mexico. (But) there are challenges that are unique to the Arctic," Salazar told Alaska reporters.

Salazar said a step toward a solution is "having an agency within the United States government and Interior, the Bureau of Ocean Energy Management and Regulation, that can in fact do its job." The agency is the successor to the Minerals Management Service, which was discredited after the Gulf spill.

"Secondly, there will be conditions that will be imposed on whatever drilling that does occur in either the Beaufort or the Chukchi on down the road that will incorporate the lessons that have been learned (from the Gulf spill)," he said. "And thirdly, there is also a recognition we have that there is additional work that needs to be done with respect to the understanding of the Arctic, the science and the need for having effective oil spill response," Salazar said.

Begich, said he was encouraged the administration is taking steps toward Arctic development while working out what Coast Guard and other resources would be needed in the area.

Last week the Interior Department's Bureau of Ocean Energy Management, Regulation and Enforcement gave Shell a conditional exploration permit that covers a program that would drill four wells over two years in Camden Bay of the Beaufort Sea, due north of the coastal plain of the Arctic National Wildlife Refuge. But the permit is contingent on many other federal permits and approvals, including oil-spill response plans and marine mammal protection.

Shell is also seeking authorization to drill in the Chukchi Sea.

Shell's Alaska government affairs manager, Cam Toohey, was at Monday's meeting with Salazar and Begich at the Cook Inlet Regional Inc. building in Midtown Anchorage. Toohey said the oil company has seen what it considers an improved attitude among the Interior Department toward providing the certainty needed to invest in projects.

Obama in July signed an executive order to create a new federal working group tasked with having agencies better coordinate Alaska oil and gas permitting and other regulatory oversight. The White House said the working group, which is overseen by Deputy Interior Secretary David Hayes, is designed to simplify oil and gas decision-making in Alaska by bringing together federal agencies to collaborate as they evaluate permits and environmental reviews. Hayes joined Salazar in traveling to Alaska this week.

Salazar said he hoped it would help with instances like the dispute among agencies over a permit for a bridge crossing of the Colville River, which would let companies develop the onshore CD-5 drill site within the National Petroleum Reserve-Alaska.

Salazar on Monday reiterated Obama's support for drilling in the NPR-A.

He said the president wants to increase the domestic energy supply, reduce consumption through measures like greater fuel efficiency, and develop alternative fuels.

Obama does not support drilling in the Arctic National Wildlife Refuge.

Salazar said there are places like NPR-A to focus on drilling "where we don't have to deal with that particular controversy." The Alaskan business people that Salazar, Begich and Reed met with in Anchorage on Monday morning were particularly concerned about what CIRI President Margie Brown described as the "regulatory morass that we find ourselves in." Deputy Interior Secretary Hayes after the meeting went to have a discussion with the governor's office, which has loudly and repeatedly complained about such regulations.

Begich and Salazar also met with the Alaska Federation of Natives on Monday before Salazar, his deputy, Hayes, and Sen. Reed went on to Fairbanks to tour the Bureau of Land Management wildfire-fighting facilities along with Sen. Lisa Murkowski, R-Alaska. Reed is chairman of the Appropriations Subcommittee with jurisdiction over the Interior Department.

The agenda for Salazar's Alaska trip also includes a visit to the Alpine oil field on the North Slope, a flyover of the NPR-A and a meeting with Shell officials in Barrow on offshore exploration. Murkowski, a Republican, will accompany him.

Salazar was in Kodiak over the weekend and will conclude his trip Wednesday with a visit to the Eielson Visitors Center in Denali National Park and Preserve.

(c) 2011, Anchorage Daily News (Anchorage, Alaska). Distributed by Mclatchy-Tribune News Service.

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Shell Executive Is Optimistic about Alaska Drilling

- Shell Executive Is Optimistic about Alaska Drilling

Wednesday, July 13, 2011
Houston Chronicle
by Jennifer A. Dlouhy

The Obama administration moved Tuesday to synchronize work by more than a dozen agencies with roles in vetting drilling in Alaska, as a top Shell executive said he is optimistic the company will be able to drill there next summer.

The administration's move seeks to quell complaints by oil companies and their advocates in Congress who say the permitting process is broken and has stalled promising exploration projects in Alaska and nearby waters.

The administration launched a working group, headed by Deputy Interior Secretary David Hayes, that will bring together seven Cabinet-level departments and other agencies. Hayes said the panel would "facilitate safe and responsible development in Alaska."

"We are committed to proceed in a balanced, science-driven way that addresses the needs of industry, of the environment and of local communities," he said during a forum on Arctic drilling sponsored Tuesday by the Center for Strategic and International Studies.

The new government working group won't replace the host of state and federal permits that oil companies must secure before they begin drilling in the region. And Hayes rejected the notion that the move constituted "streamlining" of environmental safeguards or other requirements that govern oil and gas exploration in Alaska.

But, at the same time, he said, "this is a one-stop shop for coordination of permitting. This group will ensure that there is good coordination in that regard."

'A positive step'

Sen. Lisa Murkowski, R-Alaska, called the administration's move "a positive step."

"A broken federal permitting process has for years held up responsible development of our offshore oil and natural gas resources in Alaska," she said. Murkowski added that she hopes the panel is "successful at closing what has been an endless loop of approvals, appeals and delays."

Sen. Mark Begich, D-Alaska, said the group could go a long way to "untying the procedural knots that have stalled development" in offshore Alaska and the National Petroleum Reserve.

One of those delayed projects is Shell Oil Co.'s plan to drill exploratory wells in the Beaufort and Chukchi seas. The company had hoped to launch work on its first Beaufort well after ice cleared this summer but scrapped the plans in February, after a federal Environmental Appeals Board rejected two essential air permits issued by the Environmental Protection Agency.

The EPA just issued new draft air quality permits for Shell's proposed Arctic drilling, and EPA officials say they are confident that the documents will withstand the legal challenges that derailed last year's permits.

Shell Alaska Vice President Pete Slaiby said he too is optimistic. He predicted the company will have working air quality permits by mid-October and then will prevail in any legal challenges before the appeals board.

Shell is asking federal regulators for permission to drill up to five wells in both the Beaufort and Chukchi seas during next year's three-month drilling season, with those projects sharing some of the same assets and infrastructure. If federal regulators don't approve drilling in both seas, the company might not pursue either project next year, Slaiby said, because it wants the efficiencies of doing both at once.

Although the Bureau of Ocean Energy Management, Regulation and Enforcement is now reviewing Shell's proposed Beaufort exploration plan, its separate drilling blueprint for the Chukchi Sea is on hold, pending the outcome of a court-mandated review of the government's sale of drilling leases where that work is planned.

The Interior Department is facing a court-ordered Oct. 3 deadline to decide whether to affirm that lease sale, after updating environmental assessments. The government cannot approve drilling on those leases unless the sale is affirmed.

Warning from activists

Environmentalists have warned that it could be difficult to clean up any oil spilled in slushy Arctic waters. Cold, icy conditions also mean it could take far longer than in the much warmer Gulf for spilled oil to naturally break up in the water. And they insist the risks are too great for animals in the region as well as the native communities that live off those resources.

In response, Shell has bolstered its Arctic drilling proposals with new emergency equipment and plans for responding to a blowout. For instance, the company would use two drillships in the region, ensuring one would be on hand to drill a relief well if necessary. Shell also has committed to developing a containment system that could be deployed to trap and siphon off gushing crude.

Copyright (c) 2011, Houston Chronicle

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Alaska To Offer Nearly 15 Million Acres for Oil, Gas Drilling Leases

- Alaska To Offer Nearly 15 Million Acres for Oil, Gas Drilling Leases

Thursday, June 30, 2011
Dow Jones Newswires
WASHINGTON
by Tennille Tracy

The state of Alaska plans to offer nearly 15 million acres of state-owned land and waters for oil-drilling leases, saying the areas contain billions of barrels of oil.

The lease sale will be held Oct. 26, 2011, the state said Thursday.

The sale will involve 2 million acres in the Beaufort Sea, 5.1 million acres on the North Slope and 7.6 million acres in the North Slope foothills.

Roughly 3 billion to 6 billion barrels of undiscovered oil exists in the state- and Alaska Native-owned lands between the National Petroleum Reserve and Arctic National Wildlife Refuge, the state said.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Rep. Gardner Bill to Help Oil Cos Drill Off The Coast of Alaska Slate

- Rep. Gardner Bill to Help Oil Cos Drill Off The Coast of Alaska Slate

Monday, June 20, 2011
Greely Tribune, Colorado
by Nate A. Miller, Greeley Tribune, Colo.

U.S. Rep. Cory Gardner is the driving force behind legislation slated for a vote in the House this week that would make it easier for oil companies to drill off the coast of Alaska.

"Energy security and job creation is very important to me," the Republican said. "This bill accomplishes both goals."

The bill, H.R. 2021, would streamline the process for air permits on deep-water drilling operations off the coast of the U.S., with the exception of the Gulf of Mexico, which is controlled by the Department of the Interior. It also would require the Environmental Protection Agency to make a ruling on permit requests within six months.

Fort Collins resident Gary Wockner, who is the Colorado program director of Clean Water Action, said the bill is misguided.

"This bill will increase polluters' profits at the expense of public health and the environment," he said.

While it may seem strange for a Colorado congressman to take up the cause of offshore oil drilling in Alaska, Gardner, who serves on the House Energy and Commerce Committee, said it's a good fit.

"We need an all-of-the-above energy policy in this country that lessens our dependence on Middle Eastern oil," he said. "Whether it's natural gas produced in Weld County or oil produced in our deep-water reserves. We need to be doing everything we can to help reduce the price of gasoline and to help ween ourselves off of Middle East oil."

Gardner said permits to drill off the coast of Alaska have become stuck between the EPA and the Environmental Appeals Board, which the EPA created to address administrative appeals involving the major environmental statutes the EPA administers.

"Congress said these permits had to be approved or denied within a limited time frame. The EPA created a bureaucracy without Congress that has delayed some of these permits by as much as six years," he said. "It's the EPA end-run around Congress that's hurting our energy independence."

Gardner's legislation would remove the duplication created by the EPA and appeals board permitting process.

In testimony last month before the subcommittee on Energy and Power of the House Committee on Energy and Commerce, EPA assistant administrator for air and radiation Regina McCarthy said the appeals board ensures all parties are heard and often actually makes the process more efficient.

"Rather than adding a step, the board usually serves as a cheaper, faster, more expert substitute for judicial review," she said. She used the example of a group of subsistence fisherman concerned that an EPA permit didn't address their concerns about air pollution. "They would not be required to hire a lawyer; they could attend oral arguments via video conference; and they would know that their concerns were being heard by experts."

She also said offshore drilling operations can have very real impact on air quality, and it's important to ensure effective, efficient oversight of the operations.

Gardner said the permitting process gives ample time for public comment without the added bureaucracy of the appeals board. He said the permits can be held up even when there aren't health concerns. He gave the example of a Royal Dutch Shell permit for Alaska drilling which he said the EPA held up for six years, even though EPA head Lisa P. Jackson said health concerns weren't an issue.

Gardner estimates the measure, if it becomes law, would create 50,000 jobs across the country -- including some in Colorado -- and help ease the pressure at the pump for drivers by allowing more than 1 million barrels of oil a day to be pumped from Alaska.

Wockner said Gardner should focus on energy solutions Colorado has to offer.

"Rep. Gardner should be worrying about clean energy jobs in northern Colorado, not polluters' profits in Alaska," he said.

Copyright (c) 2011, Greeley Tribune, Colo.

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BOEMRE Appoints New Regional Director for Alaska

- BOEMRE Appoints New Regional Director for Alaska

Wednesday, May 25, 2011
BOEMRE

Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) Director Michael R. Bromwich named Dr. James Kendall as the Director of the Alaska Outer Continental Shelf (OCS) Region. Dr. Kendall has been serving as the Acting Director for the region since January 1, 2011.

"Jim is absolutely the right person for the job. We have very difficult decisions to make regarding energy development offshore Alaska, and the American public must have complete confidence that those decisions will be informed by the best scientific information available," said Director Bromwich. "Jim embodies the principles of scientific integrity. He is committed to openness and transparency, and he is a dedicated public servant. The feedback I have received regarding Jim's tenure over the last few months as Acting Regional Director from environmental organizations, industry groups, and other stakeholders has been uniformly positive – they have praised Jim's openness, his accessibility, and his willingness to listen to all points of view. This praise has been universal, including from stakeholders who have been critical of our office in the past. I am very pleased to have him at the helm of the Alaska Regional office."

Dr. Kendall most recently served as the Chief of BOEMRE's Environmental Division, where he was responsible for overseeing the Bureau's $30 million applied environmental and socioeconomic research program, its responsibilities under the National Environmental Policy Act, its environmental compliance responsibilities and the Coastal Impact Assistance Program. Prior to joining the BOEMRE Headquarters Office in 2000, Dr. Kendall served as the Chief of the Environmental Sciences Section of BOEMRE's Gulf of Mexico Region.

"Working with the Regional BOEMRE team these past few months has been an honor. They are true professionals, committed to environmental protection, responsible energy development and our nation," Dr. Kendall said. "The Alaska OCS is both an environmental treasure and a vital, strategic national resource and I am committed to ensuring safe and environmentally sound stewardship of its resources."

BOEMRE's Alaska Region oversees the exploration and development of oil and gas resources in federal waters offshore Alaska. This includes assessments of the oil and gas resources, preparation of environmental analysis and research, coordination with local, state, tribal and federal governments, and others interested in the OCS program.

Dr. Kendall will eventually transition to become the head of the Alaska region for the Bureau of Ocean Energy Management, one of the new agencies that will replace the former Minerals Management Service on Oct. 1, 2011.

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Denali to Close-Out Ops at Alaska North Slope Project

- Denali to Close-Out Ops at Alaska North Slope Project

Tuesday, May 17, 2011
Denali - The Alaska Gas Pipeline LLC

The Alaska Gas Pipeline announced that its open season efforts have not resulted in the customer commitments necessary to continue work on its Alaska North Slope gas pipeline project, which has an overall estimated capital cost of $35 billion (2009 dollars). Denali will withdraw its Federal Energy Regulatory Commission pre-file application and, over the next few months, close out its operations.

"Denali is ending its efforts because of a lack of customer support," said Bud Fackrell, Denali President. "Denali is a market-driven company. As such, we cannot spend the billions of dollars necessary to advance the project unless we have binding agreements with shippers. Although we have been in discussions with potential shippers for nearly a year and half, we have been unable to secure the financial commitments necessary to advance the project."

Work to date has been substantial. Denali has conducted extensive stakeholder consultations, set up multiple data rooms with detailed information, submitted comprehensive public filings, and provided access to Denali's experts to help potential customers evaluate the project. Denali has spent over $165 million and invested more than 760,000 man-hours in its work effort.

Since Denali began its efforts in 2008, the North American gas market has changed significantly, primarily as a result of the development of shale gas resources. This has created a very difficult environment in which to secure financial commitments from potential customers.

"Although we are disappointed that Denali was not able to secure customer support, we are proud of our achievements," said Fackrell. "In particular, I want to thank the hundreds of Alaskan and Canadian companies and individuals who have worked on the project as well as the regulatory agencies, government officials, and the many Native Alaskan and Canadian Aboriginal groups who have supported our work effort over the last 3 years. Denali's work has advanced the project further than at any point in the past and has provided potential shippers an opportunity to evaluate the competitiveness of North Slope natural gas in the North American marketplace."

Denali - The Alaska Gas Pipeline is owned by subsidiaries of BP and ConocoPhillips.

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BP Alaska to Pay $25M for North Slope Spill

BP Alaska to Pay $25M for North Slope Spill

Tuesday, May 03, 2011
U.S. Environmental Protection Agency

The U.S. Environmental Protection Agency (EPA), the U.S. Department of Justice and the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) on Tuesday announced that BP Exploration Alaska, Inc. will pay $25 million in civil penalties and implement a system-wide pipeline integrity management program for spilling more than 5,000 barrels of crude oil from the company's pipelines on the North Slope of Alaska. The penalty is the largest per-barrel penalty to date for an oil spill.

"Today's settlement with BP Alaska imposes a tough penalty and requires the company to take action to prevent future pipeline oil spills on the Alaska North Slope," said Cynthia Giles, assistant administrator for EPA's Office of Enforcement and Compliance Assurance. "The Clean Water Act gives the U.S. authority to assess higher penalties when oil spills are the result of gross negligence, and this case sends a message that we intend to use that authority and to insist that BP Alaska and other companies act responsibly to prevent pipeline oil spills."

"This penalty should serve as a wake-up call to all pipeline operators that they will be held accountable for the safety of their operations and their compliance with the Clean Water Act, the Clean Air Act and the pipeline safety laws," said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. "Companies like BP Alaska must understand that they can no longer afford to ignore, neglect or postpone the proper monitoring and maintenance of their pipelines. This agreement will help prevent future environmental disasters and protect the fragile ecosystem of Alaska's North Slope."

"This penalty is a stern reminder to pipeline operators to follow orders issued by PHMSA or risk a federal civil lawsuit and steep fines," said PHMSA Administrator Cynthia L. Quarterman. "Also, it is a warning that operators must know, test and maintain their pipelines or risk harming people and the environment and having to spend, as in this instance, hundreds of millions of dollars replacing those pipelines."

In March 2006, BP Alaska spilled approximately 5,054 barrels of crude oil on the North Slope in Alaska. A second spill occurred in August 2006 with approximately 24 barrels of crude oil spilled. Investigators from EPA and PHMSA determined that the spills were a result of BP Alaska's failure to properly inspect and maintain the pipeline to prevent corrosion. PHMSA issued a Corrective Action Order to BP Alaska that addressed the pipeline's risks and ordered pipeline repair or replacement. When BP Alaska did not fully comply with the terms of the corrective action, PHMSA referred the case to the Department of Justice. Today's settlement also addresses Clean Air Act violations arising out of BP Alaska's improper asbestos removal along the pipeline in the aftermath of the spill.

Tuesday's settlement requires BP Alaska to develop a system-wide program to manage pipeline integrity for the company's 1,600 miles of pipeline on the North Slope based on PHMSA's integrity management program. The program will address corrosion and other threats to these oil pipelines and require regular inspections and adherence to a risk-based assessment system. The program will cost an estimated $60 million over three years and is in addition to the approximately $200 million BP Alaska has already spent replacing the lines that leaked on the North Slope.

Of the $25 million penalty, $20.05 million will be deposited in the Oil Spill Liability Trust Fund established under the Clean Water Act. The remainder, $4.95 million, will be paid to the U.S. Treasury. The funds paid to the Oil Spill Liability Trust Fund will be used to finance federal response activities and provide compensation for damages sustained from future discharges or threatened discharges of oil into water or adjoining shorelines. Oil spills are known to cause both immediate and long-term harm to human health and ecosystems, including the suffocation of wildlife and the contamination of nesting habitats.

In 2007, BP Alaska pled guilty to one misdemeanor violation of the Clean Water Act for the March 2006 spill and was sentenced to three years probation, ordered to pay a $20 million criminal penalty, including a $12 million fine, $4 million to the National Fish and Wildlife Foundation to support research and activities on the North Slope and $4 million in restitution to the state of Alaska.

The consent decree is subject to a 30-day public comment period and final court approval.

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Alaska Governor Asks Govt to Expedite Offshore Drilling Projects

Alaska Governor Asks Govt to Expedite Offshore Drilling Projects

Friday, April 01, 2011
Dow Jones Newswires

by  Cassandra Sweet

Alaska's governor asked federal regulators to move ahead in allowing new oil development in the Arctic Ocean, as the state looks for ways to shore up declining production.

In a letter sent Thursday to U.S. Interior Secretary Ken Salazar, Gov. Sean Parnell wrote that "Alaska is the United States' most important and abundant domestic source of future oil and gas." He cited a 2008 U.S. Geological Survey report that estimated more than 10 billion barrels of oil and more than 100 trillion cubic feet of natural gas lay beneath the surface of Alaska's Beaufort and Chukchi Seas. Parnell seized on current concerns in the U.S. about the stability of foreign sources of oil, amid turmoil in the Middle East and rising oil prices.

"We need to develop and increase our domestic supply of oil and gas," Parnell wrote.
Parnell and other Alaska officials have been working to streamline oil production taxes and take other measures to attract more onshore and offshore oil and natural gas development in Alaska. Parnell has introduced legislation, currently working its way through the state legislature, that would slash oil production taxes put in place by his predecessor, former Alaska Gov. Sarah Palin.

Parnell said Wednesday that he had set a "new goal for Alaska" of 1 million barrels of oil production per day through the Trans Alaska Pipeline System within ten years. Current oil production shipped from Alaska's North Slope 800 miles to the port of Valdez through the pipeline system is about 600,000 barrels per day, down from its peak of about 2 million barrels a day 20 years ago.

While the state has encouraged production on state lands and in state waters, for which the state would earn production royalties, officials are also keen to see new offshore drilling in the Outer Continental Shelf, as Alaska collects fees from oil shipped through the Trans Alaska Pipeline.
Alaska's government has also encouraged development of a natural gas pipeline that would ship gas from the North Slope to Canada and the Continental U.S. An alternative project would entail building a liquefied natural gas terminal that would export Alaska gas to overseas markets.

TransCanada and ExxonMobil are developing a $41 billion gas pipeline that would stretch 1,700 miles (2,700 kilometers) from the North Slope to a network of pipelines that connect Alberta, Canada, to the Midwest. A joint venture owned by BP and ConocoPhillips called Denali, has a rival Alaska pipeline plan, with a similar price-tag. Both sets of developers have held open seasons to determine interest by gas shippers in their projects. The companies have not yet released the results of their open seasons.

Buccaneer to Meet AIDEA for Rig Usage Offshore Alaska

Buccaneer to Meet AIDEA for Rig Usage Offshore Alaska

Thursday, March 31, 2011

Buccaneer Energy Ltd.

Buccaneer advised that the board of the Alaskan Industrial Development and Export Authority (AIDEA) is due to meet on April 1, 2011 to consider and vote on the investment by AIDEA of up to US $30.0 million to acquire a jackup rig for use in the Cook Inlet and other Alaskan waters.

AIDEA's involvement will be as a joint owner in the jackup rig to be acquired. Therefore the proposed investment by AIDEA does not involve the issuance of any securities by the Company.

Extensive due diligence has been undertaken by AIDEA management and a Joint Ownership Agreement (JOA) between the Company's subsidiary Kenai Offshore Ventures, LLC and AIDEA has been negotiated. The JOA contains Conditions Precedent that must be finalized before draw down of the AIDEA investment. The Company is confident that these Condition Precedents can be met in a timely manner.

AIDEA's management have made a recommendation to the board of AIDEA that it views participation on the terms and conditions contained in the JOA is in the best interests of AIDEA and recommends approval of the resolution to proceed.

If the resolution to proceed is approved by the AIDEA board it is anticipated that the JOA will be executed in the week commencing April 4, 2011. Further details will be released at that time.