BP, Exxon To Explore For Oil, Gas In Offshore Arctic -Imperial

BP PLC (BP, BP.LN), Exxon Mobil Corp. (XOM) and Imperial Oil Ltd. (IMO) formed a joint venture to explore for oil and gas in Canada's Beaufort Sea, an Imperial Oil spokesman said Friday.

BP, Exxon, and Imperial Oil--Exxon's separately traded Canadian subsidiary--have been working on a deal to share the costs and profits of exploration in the Canadian Arctic since last year, before the disastrous spill from a BP-leased rig in the Gulf of Mexico, Imperial spokesman Pius Rolheiser said.

The two exploration areas, BP's Pokak and Exxon's Ajurak leases, are located between 75 and 90 miles off Canada's north shore, directly north of the city of Inuvick in the Northwest Territories. The drilling leases are located in waters between 200 feet and 4,000 feet deep.

Canada's National Energy Board is conducting a review of offshore drilling operations as a result of the BP spill in the Gulf of Mexico. Imperial Oil will participate in the review, and the joint-venture partners will need regulatory approval before going ahead with their Arctic drilling plans, Rolheiser said.

Exxon and Imperial acquired the Ajurak lease in 2007 and BP acquired the Pokak lease in 2008. Both companies have conducted 3D seismic surveys, but haven't done any exploratory drilling of the sites yet.

Exxon and Imperial will each hold a 25% share in the joint venture and will be in charge of the operations; BP will hold the remaining 50% share.

Rolheiser said the joint venture is completely unrelated to BP and Exxon's operations in the Alaskan Arctic, and their agreement on the Beaufort doesn't mean they are any closer to reaching an agreement over their separate suport for competing natural-gas pipeline projects in Alaska.

Representatives of BP and Exxon weren't immediately available to comment.

-By Edward Welsch, Dow Jones Newswires; 403-229-9095; edward.welsch@dowjones.com

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