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Bloomberg: Shell’s Alaska Drilling Project Halted by U.S. Appeals Court

By Karen Gullo and Tony Hopfinger

July 20 (Bloomberg) — Royal Dutch Shell Plc’s plan to drill for oil off the Arctic coast of Alaska was halted by a court to allow consideration of the project’s effect on bowhead whales and other animals.

The federal appeals court in San Francisco yesterday ordered the company’s vessels to stop operating pending the resolution of a request by environmental groups and Eskimo villages to require more research on marine wildlife. The court put on hold the U.S. Minerals Management Service’s approval of the plan and scheduled a hearing for Aug. 14 to hear arguments.

“Vessels currently located in the Beaufort and Chuckchi Seas shall cease all operations,” the U.S. Ninth Circuit Court of Appeals said. The ships “need not depart the areas,” the court said.

The federal agency “diligently performs all appropriate environmental reviews and meets all requirements when preparing for any offshore leasing activity,” Robin Cacy, a spokeswoman in Anchorage, Alaska, said in an e-mailed statement.

Terzah Tippin Poe, a Shell spokeswoman, couldn’t be reached immediately.

Shell, the world’s second-largest oil company, said earlier it has invested $200 million in the drilling program. It studied the effects on sea mammals and developed a plan to respond to oil spills, he said. Further research may cause a significant delay or prevent drilling altogether in 2007, Shell said in court papers.

The Beaufort Sea is part of the Arctic Ocean north of Alaska and the Northwest Territories.

In February, Minerals Management Service, a U.S. Interior Department agency charged with regulating oil development in federal waters, said drilling wouldn’t harm bowhead whales and that Shell is prepared to respond to oil spills.

The case is Alaska Wilderness League v. Kempthorne, 07- 71457, U.S. Court of Appeals for the Ninth Circuit (San Francisco).

To contact the reporters on this story: Karen Gullo in San Francisco at [email protected] ; Tony Hopfinger in Anchorage, Alaska, at [email protected] .

Last Updated: July 20, 2007 14:31 EDT

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