The US Army Corps of Engineers has approved a plan by ConocoPhillips Corp. (NYSE: COP) to develop the first of the hundreds of leased parcels in the National Petroleum Reserve-Alaska. The US has been offering leases in the NPR-A, as it’s called, since 1999. Conoco’s proposed plan was rejected by the Corps in 2010, but the company appealed and now the rejection has been reversed.
The exploration site is at the eastern edge of the NPR-A, near the coast of the Beaufort Sea. Conoco refers to the site as Alpine West CD-5, where CD stands for Colville-Delta. Anadarko Petroleum Corp. (NYSE: APC) is a 22% partner, while Conoco owns 78% and is the operator.
The Corps’ action does not mean that drilling will commence anytime soon. Conoco will need to incorporate several special requirements and set up a special fund to pay for expected damage to the environment.
Environmental groups have opposed the company’s plan to build a permanent road and a bridge to the project area. Now that the plan has been approved, the real struggle will begin.
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