Oil Firms Agree Not to Drill Off 2 Coastal Areas

The Interior Department and nine oil companies reached agreement Monday on the surrender of drilling leases off southwestern Florida and in Alaska’s Bristol Bay, assuring protection of the environmentally fragile coastal waters.

Interior Secretary Bruce Babbitt said the agreement “closes the door for oil and gas development offshore the Everglades and in Bristol Bay, now and for the foreseeable future.” He called it “a landmark event for the protection of some of America’s most fragile offshore resources.”

The government will pay the companies nearly $200 million for surrender of the leases, which have been covered by a drilling moratorium with little likelihood that they would be developed soon.

The legal dispute centered on the value of the leases, which had been purchased in the 1980s before the government moratorium. The oil companies at one point had claimed losses of $1 billion. They also argued that the government should compensate for losses of potential oil and gas deposits.