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Alaska agency issues Cook Inlet leases
Alan Bailey Petroleum News
The long wait is over for people who made successful bids at the State of Alaska’s May 2006 areawide lease sale. Alaska’s Division of Oil and Gas mailed the leases on July 30 for signature by the bidders, Kathy Means, natural resource manager for DO&G lease sales and lease administration unit, told Petroleum News on July 31.
Denise Stone, exploration adviser for Benchmark Oil and Gas, one of the lease sale bidders, told Petroleum News July 25 that Benchmark’s Cook Inlet exploration was in something of a holding pattern while the company waited for the leases (see “Benchmark gathering data; waiting on leases” in the July 29 edition of Petroleum News).
So how come it has taken well over a year to issue the leases?
Title work after the sale Kevin Banks, acting director of DO&G, told Petroleum News July 31 that because the division offers all land available for lease in an areawide sale, it doesn’t verify the land title and complete the legal descriptions of the leased land until after bids have been accepted at the lease sale. In some cases, tracts that have been bid may include some land parcels that have already been leased, Banks said.
And that land title and survey work takes a substantial amount of time.
In a traditional lease sale, as distinct from an areawide sale, the division performs all the tract survey and title work prior to the sale, for the tracts that the division has decided to offer. It can then issue leases to successful bidders within weeks of the sale. But the problem with that approach is that companies can only bid on those tracts that the division offers at the sale and the division has to perform the survey and title work on all of the tracts offered, regardless of whether anyone ultimately leases the tracts.
Experienced staff shortages Shortages of experienced staff at the division have slowed the processing of the title work for tracts bid on in the areawide sales, Banks said. And the fact that the last areawide sale attracted a high number of leases in areas with complex land ownership issues compounded the problems, Means said.
Banks said that, although it will always take some time to process leases after an areawide sale, the recent delays are unacceptable.
“It should not have to be 12 months,” he said.
And, in addition to dealing with the issues of staff inexperience, Banks think that there is scope for streamlining the lease issue procedures.
“We’re catching up. … I think we need to be more creative about our procedures, to see just where are those bottlenecks that we can widen,” Banks said.
However, the division does have to face the fact that many of its most experienced staff are approaching retirement age — 30 percent of the staff is reaching an age where people can decide whether to leave, Banks said. The division needs to plan for that issue, he said.
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