State leasing two Deadhorse tracts

Petroleum News

The state is auctioning two industrial lease tracts at Deadhorse on the North Slope.

Dick Mylius, director of the Alaska Department of Natural Resources Division of Mining, Land and Water, said this will be the first auction of industrial tracts on the North Slope in about 20 years. Since that auction, he said, anyone wishing to use a lease tract has had to make an arrangement with someone who already had a lease. The lease tracts are used primarily by industries that provide support services to North Slope oil and gas field operations.

Alaska Frontier Constructors and Schlumberger Technology Corp. applied for the leases, and several other parties have expressed an interest in leasing tracts at Deadhorse.

“With the prospect of upcoming gas line construction, DNR expects that there may be interest from other parties as well,” said Mylius. Deadhorse is the hub of developable land adjacent to the existing road system at the end of the Dalton Highway near Prudhoe Bay.

One parcel has good road access and an 8.88 acre gravel pad. The other parcel consists of four tracts that total 30.95 acres of unimproved tundra. The parcel has legal access, but there is no access road, and the new lessee would have to construct the road.

Both leases are within the Deadhorse industrial area and would be leased for 25 years.

Leasing will be through a sealed bid auction, with bids due by 4 p.m. June 2.

Minimum bids, determined by appraisal, are $58,000 and $24,000 per year, respectively. The bid opening will be at the division’s Fairbanks office June 5. Instructions to bidders are available at the Fairbanks office of the Division of Mining, Land and Water and at: www.dnr.state.ak.us/mlw/hottopics/nslopelease/index.cfm.

The division auctioned off some 75 lease tracts in the late 1970s when North Slope contractors needed bases of operation. Those leases met the need for many years. When the price of oil dropped in the mid-1980s, interest in new leases also dropped, the division said, and in the early 1990s when the producers started partnering with just a few companies there was a drop in the number of businesses operating on the North Slope.

The division said that other than leases for telecommunications sites, the applications from Schlumberger and Alaska Frontier Constructors are the first such applications it has received since the 1980s.