December 03, 1998 --- Vol. 4, No. 54December 1998

NPR-A lease sale to be held this spring; will include all of area identified as available in October

An oil and gas lease sale will be held in the northeast corner of the National Petroleum Reserve-Alaska in late April or early May.

The U.S. Department of the Interior’s Bureau of Land Management said in a Dec. 3 statement that the entire area identified as being available for oil and gas leasing in the environmental analysis will be offered in this sale.

A proposed notice of sale will be published in early January which will include specifics of the sale: royalty rates for specific tracts, rental rates and minimum bid amounts. Lease size will range from quarter townships (5,760 acres) to half townships (11,520 acres) depending on projected oil and gas potential and distance from existing infrastructure.

BLM said tracts having the highest potential and being closest to infrastructure would be the smallest. The leases will be for 10 years and royalty rates will be 16.67 percent for the high potential area and 12.5 percent for the low potential area. NPR-A royalties are split 50/.50 between the state and the federal government.

“Once this sale is held, it is our intent to conduct subsequent sales in the area, depending on the level of interest,” Tom Allen, state BLM director for Alaska, said in a prepared statement.

BP’s ANS term prices drop to $11.45 a barrel

The 1998 free fall of crude oil prices is reflected in BP America’s December term price for Alaska North Slope crude.

At $11.45 a barrel it is the lowest the term price has been since January of 1994 when it hit $10.38 a barrel. The term price is an average of spot prices for the previous month.

BP’s December term price for ANS crude is down $1.93 a barrel, a 14.42 percent drop, from November’s term price of $13.38 a barrel, and down $6.87 a barrel from the December 1997 term price of $18.32 a barrel, a drop of 37.5 percent.

There have been lower term prices set, but only two: $10.38 a barrel in January 1994 and $9 a barrel in July and August of 1986.

The high term price for 1998 was in January, at $16.41 a barrel — and that was a drop of $1.91 a barrel (10.43 percent) from December.

BP is the largest producer of ANS crude and the only producer to post term prices.

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