Anchorage – – In a ground-breaking announcement Thursday, Arctic Slope Regional Corporation (ASRC) and six (6) North Slope village corporations have joined together to create a new company known as the Arctic Inupiat Offshore, LLC (AIO). AIO and Shell Gulf of Mexico Inc. (Shell) have entered into a binding agreement that will allow AIO the option to acquire an interest in Shell’s acreage and activities on its Chukchi Sea leases. This interest will be managed by AIO.
AIO members include ASRC, Ukpeaġik Inupiat Corporation, Tikigaq Corporation, Olgoonik Corporation, Kaktovik Inupiat Corporation, Atqasuk Corporation and Nunamiut Corporation. These corporations represent the communities of Barrow, Point Hope, Wainwright, Kaktovik, Atqasuk and Anaktuvuk Pass. Rex A. Rock, Sr., president and CEO for ASRC, will also serve as the president for AIO. He commented, “Our region has always been a leader in strategic partnerships that provide meaningful benefits to our shareholders, to our people.” Rock further stated, “I am humbled to acknowledge that this arrangement balances the risk of OCS development borne by our coastal communities, with the benefits intended to support our communities and our people.”
Ukpeaġik Inupiat Corporation president and CEO, Anthony E. Edwardsen will serve as Chairman of AIO. Edwardsen remarked, “Our values teach us that we achieve success by putting the needs of our community at the center of all that we do. It is important that our community has a seat at the table to represent the subsistence and economic needs of our shareholders. Through AIO we will have meaningful input into this process while providing benefits back to our shareholders.”
“This is an important day for our Alaska Venture,” said Shell Alaska Vice President, Pete Slaiby. “A regional alliance with so many respected Alaska Native Corporations provides Shell the opportunity to collaborate with savvy and experienced North Slope business partners going forward. It also underscores our commitment to provide opportunities for North Slope communities to directly benefit from Shell’s activities offshore Alaska.”
Sayers Tuzroyluk, Chairman of the Board of Tikigaq Corporation, will also serve as the secretary and treasurer of AIO. Tuzroyluk explained, “Tikigaq borders the Arctic coastline, and we finally have a mechanism to share in the benefits from responsible off-shore oil and gas development. The creation of AIO opens the opportunity to do business with respect to oil and gas development.”
Olgoonik Corporation’s President, Steve Segevan, commented, “The community of Wainwright is at the forefront of OCS development, and our community has taken a progressive approach in support of responsible OCS development. AIO strengthens our approach to the OCS and provides us with a solid seat at the table. It’s a new day, where the village corporations join together with the regional corporation –it’s a new way of doing business on the North Slope.”
Phillip Tikluk, President of Kaktovik Inupiat Corporation, said “KIC and its Board of Directors believes this opportunity, brought forth to the village Corporations across the North Slope by ASRC and Rex Rock, to join AIO is unprecedented; it stands to bring financial stability and alignment to the village corporations across the North Slope from responsible off-shore development.”
“Formation of AIO provides for unity amongst our corporations which makes us stronger in time of new changes. This agreement allows us to be better prepared for the unknown that’s coming to us in the near future and we must stand united in our respective communities, including the whole North Slope,” said Margaret Ahngasuk, President of Atqasuk Corporation.
Patrick Mekiana, President of Nunamiut Corporation, said, “This partnership creates alignment with most of the North Slope villages. Through AIO, even Nunamiut shareholders and the inland community of Anaktuvuk Pass will benefit from responsible OCS development. We are happy to be included in this opportunity because we are all one people and related across the North Slope region.”
Through this option agreement, Shell would assign to AIO an overriding royalty interest in oil and gas produced from specific Chukchi Sea leases. In addition, AIO would have the option to participate in project activities by acquiring a working interest at the time Shell makes the decision to proceed with development and production.
Shell and AIO will hold quarterly meetings to exchange information and address regional and development issues.
Governor Sean Parnell lauded Thursday’s announcement that Arctic Inupiat Offshore (AIO), a newly created company of Arctic Slope Regional Corporation (ASRC), has entered into an agreement allowing AIO the option of acquiring an interest in Shell Oil’s activities on its Chukchi Sea leases.
“I applaud Shell’s partnership with the Alaska Native corporations that will provide a greater voice and opportunity for the people in the region and a seat at the development table,” Governor Parnell said. “This establishes a very positive precedent in Alaska’s Outer Continental Shelf, showing strategic partnership among North Slope communities and Shell, both of which understand the importance of developing Alaska’s offshore oil and gas resources.”