420 



for the better portion of the year; Alaska has more Continental Shelf off its coasts 

 than the rest of the United States, excluding Hawaii. 



It appears that lease sales originally scheduled for the latter part of 1969 

 in the Gulf of Alaska and Bristol Bay may be deferred until 1970, because of the 

 Interior Department's suspension of bid requests for new offshore leases. Once 

 more definite rules have been laid down for drilling in offshore areas, we believe 

 that these lease sales will be rescheduled. Because of difficult year-round working 

 conditions, a hiatus of only a few months in studying the Alaskan acreage coming 

 up for bid would defer a lease sale offshore Alaska for about a year. While the cost 

 of drilling in the Alaskan water is approximately five times that of drilling in 

 the Gulf Coast, the possibility of large structures existing in the offshore area is 

 quite high, as the Cook Inlet has proven out. Even the North Slope, which is so far 

 primarily a landplay, adjoins the coast; the initial discovery well was only seven 

 miles from the sea. In fact. General American Oil holds two leases which are 

 seven miles away from the original Atlantic- Jersey discovery well. These two 

 leases are 85% offshore. In future years, we expect that advances in the state of 

 the art will develop so that petroleum can be produced from areas in which the 

 ice forms a 25-foot thickness, with ridges extending to 75 feet during the miid-winter 

 months. 



2. Other Western Hemisphere 



Offshore areas in the Western Hemisphere are receiving more attention. 

 Exploratory and seismic efforts are being conducted off no less than 18 Central 

 and South American countries. New petroleum laws in various nations, especially 

 Argentina, are bringing seismic crews back into an area which once was one of 

 the most promising in the Western Hemiisphere. But while Argentina, under a 

 new government, is now spurring the development of its offshore provinces, the 

 Peruvian Government for one, is creating a cloud over Western Hemisphere oil 

 exploration. Concessions have recently been awarded offshore Peru to Texaco, 

 Gulf and Occidental Petroleum, and Belco Petroleum is already a producer in 

 Peruvian waters. But the seizure by the Peruvian Government of Standard Oil of 

 New Jersey's onshore Parinas Field, which was the result of a dispute of many 

 year's standing, leaves that country in somewhat of a grey area. Acreage off 

 some Central American countries is now, however, being explored more actively, 

 especially Nicaragua, Honduras and the Islands of Trinidad and Jamaica. 



Drilling in the Canadian Arctic is starting with the Panarctic Group (45% 

 owned by the Canadian Government and the balance by 19 Canadian companies and 

 Barber Oil) putting down its initial well on Melville Island. A second well is slated 

 for April 1969. Sun Oil and Global Marine will conduct a magnetometer proj;ram 

 this summer on a portion of 6 million Canadian Arctic acres, as will Pacific 

 Petroleums on its vast Beaufort Sea acreage. If initial drilling in the Canadian 

 Arctic by Panarctic proves favorable, this area should receive much more interest 

 over the course of the next several years. Hudson Bay and the east and west 

 coasts of Canada will also continue to be areas of intense activity. 



