Shell, Alaska Native corporations enter agreement with option to share in drilling profits

MarketsAssociated Press

An Alaska Native regional corporation and six Native Village corporations have signed an agreement with a Shell Oil subsidiary that aims to share the profits from offshore drilling off Alaska's northern coast.

Shell and the Arctic Slope Regional Corp. announced the formation of a new company Thursday called Arctic Inupiat Offshore LLC. Its participants include the village corporations on the North Slope.

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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.

Shell would get the benefit of local knowledge for its drilling operations.

Arctic Slope President Rex Rock will also lead the new cooperative. He says the agreement allows the corporations to balance the risks and benefits of offshore drilling.