DATE: Tuesday, September 30, 1997           TAG: 9709300270

SECTION: LOCAL                   PAGE: B1   EDITION: NORTH CAROLINA 

SOURCE: BY CATHERINE KOZAK, STAFF WRITER 

DATELINE: NAGS HEAD                         LENGTH:   78 lines

RESPONSE TO CHEVRON TO BE DISCUSSED MANY OF THE PLAYERS WHO FOUGHT MOBIL IN 1990 ARE EXPECTED.

Public officials and leaders of citizens' groups will meet Wednesday to update their strategy in response to Chevron oil company's proposal to drill an exploratory well 45 miles from Cape Point.

Sponsored by the state Division of Coastal Management, the meeting will include many of the same players who had fought against a similar proposal by Mobil Oil Corp. in 1990.

Barrier island residents and officials had united against the oil company over concerns that the coastline and fishery could be permanently harmed by oil exploration and its related infrastructure.

Although it is open to the public, Wednesday's 2 p.m. meeting at the Nags Head fire station is not meant to be a be a public forum, said Alison Davis, division spokesperson. Rather, it is viewed as an chance for policy makers, government representatives and citizens' group leaders to share information and concerns.

``We will have full-scale, big public meetings in the near future,'' Davis said.

North Carolina denied Mobil permission to drill in 1990 because it did not provide enough information about the socio-economic impacts of drilling and the possible consequences to fisheries in the area. The company subsequently sued the federal government in two separate actions. Both lawsuits are pending, and Mobil has said it is no longer interested in the leases.

On Sept. 18, Chevron notified the state that it wants to drill a well in one block in the Manteo Exploration Units to explore for oil or natural gas. The company received preliminary approval in 1982 to drill but had never pursued exploration. Although technically the approval still stands, Chevron would be expected to update its plans and environmental reviews.

Chevron is interested in looking for hydrocarbon deposits in either block 467 - the same unit Mobil wanted to explore - or in block 510, which is about 9,000 feet away and owned by Chevron.

The Manteo Units are a conglomerate of 21 lease blocks owned by Mobil, Chevron, Amerada Hess Corp., Shell Offshore Inc., Marathon Oil Co. and Comico. Oil companies involved in such arrangements typically agree that one company will act as a lead operator, but all lease owners have a stake in exploration of any unit.

Brenda Dulaney, shelf project leader for exploration for Chevron, said the company wants to drill one 8-inch hole up to 20,000 feet, depending on which block is used. Dulaney said the drill location is based on seismic data obtained between 1976 and 1981 that show a potential ``hydrocarbon container'' reef that could hold up to 6 trillion cubic feet of oil or natural gas - which translates to about 1.5 billion barrels of oil.

``On an industry scale, it's very large,'' she said.

Dulaney said that the potential Manteo well is technically ``an easy well'' because it's shallower and at lower pressure than others the industry has drilled offshore.

``We haven't had an oil spill problem from an exploratory well,'' she said. ``The technology has evolved so that we can do it even more safely than before.''

Combined with the enormous potential for oil or gas and the market's higher prices, Chevron considers its 2 percent chance of a commercial find off Hatteras a reasonable risk. Indeed, the odds are typical in explorations of ``wildcat wells'' - previously unexplored potential oil depositories.

Michael McOwen, co-president of the Outer Banks anti-drilling group LegaSea, said Chevron's risk is its own choice and not the choice of Outer Banks residents, who hotly opposed offshore drilling seven years ago.

``What gambles are they playing with our livelihoods?'' McOwen asked.

McOwen said the opposition is gearing up anew.

``There's a lot of mobilization going on now,'' he said. ``There's a large amount of people in this area who have a lot of history with this issue and are very well educated . . . We're at that stage where we're bringing in all the new people who are interested in helping.''

Davis, of the coastal management division, said that Chevron is not expected to submit its drill application to the state until late 1998 or early 1999. The state will then have 90 days to respond.

``There is no clock ticking yet,'' she said. ``Our goal in all of this is protect North Carolina. We have to consider (Chevron's proposal), but everything we do is to protect the coast of North Carolina.'' ILLUSTRATION: Map

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