Oct. 19--The Obama administration has given conditional approval to Shell Oil's plan to explore two leases in the Beaufort Sea next summer and fall, federal regulators said Monday.

The federal Minerals Management Service said it will allow Shell to drill for oil and gas in far western Camden Bay, west of Kaktovik, off Alaska's Arctic coast if certain conditions are met. For the project to go forward, it must comply with state and federal environmental requirements and Shell needs to obtain a drill permit from MMS, the service announced Monday.

"Now that we have approved Shell's plan and reached this important milestone we will continue to work with Shell to ensure that all activities are conducted in a safe and environmentally responsible manner," said MMS director Liz Birnbaum.

Shell's plan is much less ambitious than what the global oil giant had envisioned a few years ago after purchasing the leases. In 2007, the company said it wanted to drill more than a dozen wells in the area. But the company faced opposition from some village leaders and environmentalists, including lawsuits involving some of its other offshore leases in the Arctic. The leases in Camden Bay are not subject to any litigation at this time, according to MMS.

Instead of drilling a large numbers of wells, Shell says, it plans to drill two wells between July and October on its Camden Bay leases. The company has agreed to suspend drilling and take its vessels out of the area in August during the fall subsistence bowhead whale hunts by two villages, Kaktovik and Nuiqsut.

U.S. Sen. Mark Begich, D-Alaska, praised the MMS this morning before the agency had made its decision public.

Begich said the decision showed that the Obama administration and Ken Salazar, the secretary of the interior who is in charge of the MMS, "recognize the importance of Alaska's abundant offshore oil and gas resources, and it brings us one step closer to environmentally responsible development offshore of Alaska."

U.S. Sen. Lisa Murkowski, R-Alaska, also said Monday that the MMS announcement was "an encouraging sign."

This is a developing story. Check back later for updates.

Find Elizabeth Bluemink online at adn.com/contact/ebluemink or call 257-4317.

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