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June 29, 2012 --- Vol. 18, No. 45June 2012

Industry sniffing around federal Cook Inlet

In addition to upcoming lease sales in the Beaufort and Chukchi seas, the proposed final offshore oil and gas leasing program for 2012-17 also includes a sale in Cook Inlet in 2016, according to Bureau of Ocean Energy Management Director Tommy Beaudreau.

After putting out feelers to the industry earlier this year, “we received significant interest at this time. In light of that interest, we will proceed with the necessary environmental impact statement analysis in that area,” Beaudreau said at a press conference yesterday.

Although the reason for that interest remains confidential, the announcement suggests a re-evaluation of the federal waters extending roughly from Kalgin Island to Kodiak. That region hasn’t excited industry recently. Or, as Beaudreau put it more bluntly, “In the past we’ve scheduled potential sales in the Cook Inlet and, honestly, nobody showed up.”

When the Interior Department released its draft lease plan in November, it included a Cook Inlet sale as a “placeholder,” but this spring it asked companies to express specific interests in the region. “We got response from industry that said, ‘We’re interested in particular areas in the Cook Inlet planning area as well as the area as a whole,’” he said.

The BOEM currently estimates the Cook Inlet planning area contains 1 billion barrels of technically recoverable oil and 1 trillion cubic feet of technically recoverable gas, around 7.7 percent and 3.4 percent of the estimates for the Beaufort and Chukchi, respectively.

A sale in Cook Inlet would proceed under the new “targeted leasing” strategy promoted for the Beaufort and Chukchi, an approach designed to consider resource potential and environmental concerns. A sale in the Cook Inlet area would require a consideration of endangered species, particularly the Beluga whale, Beaudreau noted.

—Eric Lidji

See full story in July 8 issue, available at 11 a.m. Friday, July 6, at www.PetroleumNews.com

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