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NEWS BULLETIN

January 13, 2006 --- Vol. 12, No. 3January 2006

State sets March 1 date for North Slope, Beaufort Sea lease sales

The state will hold its North Slope and Beaufort Sea areawide lease sales March 1, with bid opening beginning at 8:30 a.m. in the Wilda Marston Theater in the Loussac Public Library in Anchorage. These are the sales originally scheduled for October 2005.

The Alaska Department of Natural Resources Division of Oil and Gas said southern North Slope tracts will have a fixed royalty of 12.5 percent; northern North Slope tracts will have a 16.67 percent royalty.

The primary term of leases in the North Slope sale has been reduced to five years for northern tracts and seven years for southern tracts.

For the Beaufort Sea sale the farthest east tracts will remain at a 12.5 percent royalty and a 10-year primary term.

All other tracts in the sale will have a royalty of 16.67 percent, and tracts closest to infrastructure will have a five-year primary term; other tracts will have a seven-year primary term.

The minimum bid is $10 per acre for all tracts.

Information will be posted on the division’s Web site: www.dog.dnr.state.ak.us/oil/index.htm.

North Slope Borough approves Pioneer’s rezoning application

On Jan. 10 the North Slope Borough Assembly unanimously passed ordinance 75-06-50, approving Pioneer Natural Resources’ request to change the zoning of Pioneer’s proposed Oooguruk oil project area from conservation to resource development.

According to NSB land management specialist Gordon Brower there were a number of industry people in Barrow for the NSB Assembly meeting yesterday, including people from Pioneer, BP and ConocoPhillips.

“I think they’re just interested in what the borough’s policy will be with these near shore developments,” Brower told Petroleum News Jan. 11.

This is the second rezoning application that has been approved by the borough for a near shore development. Last year Kerr-McGee was able to rezone its proposed Nikaitchuq oil development which is about 9 miles east of Oooguruk.

“The NSB maintains its position in opposition to offshore development, but citing policy and the area proposed, the planning department was able to balance this opposition using the North Slope Borough Coastal Management Plan and the policies of Title 19,” Brower said, noting that “the design for the development was based on” Kerr-McGee’s Nikaitchuq development.

According to Brower, Pioneer said it needed a decision on the rezoning by Jan. 15 in order to start construction of the Oooguruk gravel island this winter.

Pioneer told borough officials that it intends to immediately apply for its borough permits, which Brower said are expected to move quickly through the process. “Now that the assembly has made its decision … all that’s needed for the permits is administrative approval,” he said.

He said Pioneer expects to have all the gravel in place for the island “before the tundra travel closure date for this year. … Pioneer will monitor the island to make sure it holds. Next winter they want to do the placement of the subsea pipeline.”

A few days before the Assembly vote the NSB Planning Commission passed a resolution recommending approval for rezoning to the Assembly on the condition that Pioneer be asked to “mitigate for subsistence and Native allotment impacts, with additional mitigation to implement a Economic Opportunity plan approved by the Land Management Administrator that would provide a vehicle for training and other opportunities for North Slope residents.”

Those conditions were part of the modifications attached to the approval by the Assembly.

The Oooguruk oil field development has not yet been sanctioned by Pioneer.

Editor’s note: See story in Jan. 15 issue of Petroleum News available online this afternoon at www.PetroleumNews.com

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