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Industry responds to proposed NPR-A regs
ConocoPhillips Alaska and FEX, two companies with significant acreage positions in the National Petroleum Reserve-Alaska, have responded to the U.S. Bureau of Land Management’s proposed changes to the NPR-A leasing and unitization regulations. In May BLM published revised regulations that would bring NPR-A more into line with leasing and unitization procedures in other regions and jurisdictions.
The proposed changes apply to topics that include royalty reductions, lease extensions and the specification of participating areas. And the new regulations would specify what happens if title to leased federal land is transferred to Arctic Slope Regional Corp., the Native regional corporation for the North Slope. Changes to rules for unitization would include the requirement to discuss in the unit application the proposed methodology for production allocation, provide for unit renewal upon unit termination and allow time to collect data prior to submitting a unit development plan.
Support Both ConocoPhillips and FEX expressed support for the BLM proposals.
“CPAI appreciates BLM’s efforts to revise the existing regulations … to mitigate the unique conditions and challenges prevailing in the NPR-A and improve the process by which operations in the NPR-A are conducted,” Erec Isaacson, ConocoPhillips vice president exploration and land, said in a letter to BLM.
ConocoPhillips recommended some rewording of the definition of a petroleum discovery, and suggested that, when a unit is formed, BLM should request that a non-federal mineral owner with less than 10 percent ownership in the unit join the unit.
“The Bureau of Land Management’s proposed changes to the NPR-A oil and gas regulations are very good and quite necessary to support exploration and development,” said Tim England, FEX senior manager, exploration, in FEX’s response to the BLM proposals. “The remoteness of the region along with the short exploration and construction seasons make both exploration and development very costly. While NPR-A has significant hydrocarbon potential, it probably lacks prospects large enough for a stand-alone development under the current fiscal system. Therefore, exploration and development incentives, such as royalty relief, will be necessary to continue exploration activity, placement of infrastructure and resource capture.”
FEX’s response suggested simplifications to some of the language in the proposed regulations
—Alan Bailey
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