MMS rejects bids for Kuvlum in Beaufort

The Minerals Management Service rejected Shell’s bids for the Kuvlum prospect in the Beaufort Sea, MMS Alaska Regional Director John Goll said Oct. 6. The agency has held two Beaufort Sea sales in its current five-year plan. “Many great prospects have been leased through these two sales and we’re looking forward to further exploration,” he said.

Shell picked up the Hammerhead prospect, along with tracts off the Arctic National Wildlife Refuge and a number in the central Beaufort, but “we did reject a couple of bids for the Kuvlum prospect” east of Hammerhead, he said.

The agency said in early August that it had issued 117 leases from Beaufort Sea sale 195, accepting more than $45 million in total high bids — 99.65 percent of the total bid value.

The agency said then that it rejected bids on two tracts “based upon application of MMS’s bid adequacy criteria,” but it did not name the bidder or identify the prospects.

Bids were awarded to Shell Offshore, ConocoPhillips and Armstrong Oil; MMS said NACRA Corp. did not pursue two bids it made.

MMS said it reviews bids to ensure a fair return, identifying geologic prospects in the area, mapping them and then using a proprietary computer program to evaluate the bids, and rejecting those that do not meet its criteria.

Goll said the sale “was our best OCS lease sale offshore Alaska since 1988.”

—Petroleum News