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Preliminary BIF out for Foothills lease sales
The Alaska Division of Oil and Gas has issued a preliminary best interest finding for its North Slope Foothills oil and gas lease sales, along with an Alaska Coastal Management Program consistency evaluation.
Both documents are available on the division’s website at www.dog.dnr.alaska.gov; comments are due March 25.
Division of Oil and Gas Director Kevin Banks has preliminarily found that holding North Slope Foothills areawide oil and gas lease sales from 2011-20 is in the best interests of the state.
The state has held 10 areawide oil and gas lease sales in the Foothills, based on a best interest finding issued in 2001.
The Foothills lease sale area consists of state-owned lands between the National Petroleum Reserve-Alaska on the west, the Arctic National Wildlife Refuge on the east, south of the Umiat baseline and north of the Gates of the Arctic National Park and Preserve.
Natural gas potential The area is believed to have a relatively high potential for natural gas and a relatively low potential for oil, the state said, based on resource evaluation including geology, geophysics, seismic data and the exploration history of the area.
The division said with the exception of the Umiat oil accumulation, discoveries in the area to date have consisted primarily of dry gas trapped in anticlinal fold structures.
“Oil and gas volumes discovered to date are currently best described as ‘sub-commercial resources’ whose development potential is contingent upon constantly fluctuating economic factors and connection to markets,” the division said in its preliminary finding.
Fiscal effects The division noted that Alaska’s economy depends heavily on revenues related to oil and gas production and the government spending resulting from those revenues.
Alaska North Slope production peaked at some 2 million barrels a day in fiscal year 1988 and has been in decline since, with the Department of Revenue projecting that volumes will decline to about 619,000 bpd in fiscal year 2011.
The North Slope Foothills areawide lease sale area is in the North Slope Borough, and the division said many NSB jobs are directly or indirectly linked to the oil industry or its support industries, while NSB finances depend predominately on tax revenues from oil properties.
—Petroleum News
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