Energy companies offered a total of $13.86 million for rights to explore 81 tracts in part of the National Petroleum Reserve-Alaska, a vast federal land valued for Arctic wildlife as well as oil and gas potential.
Wednesday’s lease sale, held by the U.S. Bureau of Land Management, was reduced to comply with a federal judge’s ruling Monday that barred oil and gas exploration in an environmentally sensitive wetlands area.
The bids are for rights to explore on almost 1 million acres.
This land is among about 5.4 million acres open for bids, which is about 3 million acres less than the BLM wanted open for bids before the court’s ruling on Monday.
Despite having to pare back the size of the lease sale, the BLM was satisfied with the bids received for tracts in the northwestern part of the reserve, said Julia Dougan, acting Alaska director of BLM.
“I think that’s an expression that energy development and interest in the petroleum reserve in Alaska continues to grow,” Dougan said.
Wednesday’s sale was far less lucrative than each of the three previous sales held in the petroleum reserve by the BLM since 1999. Those three sales reaped a total of $222 million in high bids and launched a flurry of exploration that has already resulted in some discoveries.
“There were no real surprises to us or to anyone else,” Dougan said. “The companies that were involved already hold leases in the petroleum reserve.”
The bidding was dominated by FEX LP, a subsidiary of Talisman Energy Inc., and Petro-Canada. The companies, bidding jointly, put up $10.47 million to win the rights to explore 48 tracts, according to preliminary results.
The new leases are west of Teshekpuk Lake and just south of the Beaufort Sea coastline, near leases already held by the companies individually or in partnership.
The companies have high hopes for the far-north area, which is located along the North Slope’s most promising geologic structure, said Dick Garrard, the Anchorage-based geoscience manager for FEX LP.
“For us, it’s high on the Barrow Arch, which has been a focal point,” Garrard said. “All of the major oil fields in Alaska are located on the crest or on the flank of the Barrow Arch, and there are subtle traps that new technology can now identify.”
Also winning exploration rights in Wednesday sale was Anadarko Petroleum Corp., which submitted high bids of $2.38 million for 25 tracts, and ConocoPhillips, which bid $1 million for eight tracts, according to preliminary sale results.
The Indiana-sized petroleum reserve was created in 1923 for the purpose of supplying energy to the nation’s military forces. Despite sporadic exploration since the 1940s, mostly by the federal government, industry interest in the region was scant until the 1990s when the huge Alpine field was discovered by Arco Alaska Inc. on state land just east of the reserve’s border.
