ANCHORAGE, Alaska – An Alaska Native regional corporation and six Native Village corporations signed an agreement with a Shell Oil subsidiary Thursday that aims to share the profits from offshore drilling off Alaska’s northwest coast.
Shell and the Arctic Slope Regional Corp. announced the formation of a new company called Arctic Inupiat Offshore LLC. Its participants include six village corporations on the North Slope. The agreement with the Shell subsidiary, Shell Gulf of Mexico Inc., gives the Alaska Native company the option of acquiring an overriding royalty interest from Shell’s drilling on leases in the Chukchi Sea.
Rex Rock, president and CEO of the regional corporation, said the new company aims to align the oil industry and North Slope communities by investing in offshore production through the purchase of the overriding interest. Rock, who also is president of the new company, said the agreement allows the corporations to balance the risks and benefits of offshore drilling.
Shell would get the benefit of local knowledge for its drilling operations, said Shell Alaska Vice President Pete Slaiby. He said the agreement also underscores Shell’s commitment to provide opportunities for the communities.
Details about the arrangement were sketchy and officials allowed little time for questions from reporters.
Shell spokesman Curtis Smith said the agreement allows for an option to purchase an equity position in Shell’s Chukchi acreage at a later date. The agreement has been four years in the making, according to officials.