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Vol. 13, No. 28 Week of July 13, 2008
Providing coverage of Alaska and northern Canada's oil and gas industry

MMS gauging interest in Cook Inlet sale

Federal OCS lease sales scheduled for 2009, 2011; agency will proceed if industry interested in Cook Inlet, Shelikof Strait areas

Kristen Nelson

Petroleum News

Will the Minerals Management Service hold a Cook Inlet lease sale next year? It depends on responses MMS, a U.S. Department of the Interior agency, receives from a request for expressions of interest in an oil and gas lease sale in the Cook Inlet planning area.

“The Cook Inlet area is a proven oil and gas province, but past industry interest in the federal offshore area has been limited,” MMS said in a July 8 Federal Register notice.

With declining Cook Inlet production, there is renewed interest in finding additional hydrocarbon resources for Southcentral Alaska, the agency said.

The request for information will determine whether there is industry interest focused on a few blocks, or if there is broader interest.

Comments are also sought from tribal, local, state and federal agencies and the general public to determine whether MMS should proceed with further evaluations under the Outer Continental Shelf Lands Act, the National Environmental Policy Act, the Endangered Species Act, the Coastal Zone Management Act and other applicable laws and regulations.

The agency said it would consider the level of industry interest as well as “other issues and concerns reflected in comments” as it determines how it will proceed.

Responses are due Oct. 6 and companies are asked to rank their areas of interest. “Company comments about specific levels of interest and/or specific areas of interest will be considered proprietary and confidential information, although the identities of those submitting nominations become a matter of public record,” MMS said.

Companies interested in specific blocks should identify those; interest in a larger area should be explained “including a summary of the geologic and economic information about the larger area.” The agency is also asking respondents to provide contact information and to be prepared to meet with the agency to discuss the company’s level of interest.

If there is not sufficient industry interest this year, MMS said it would issue another request for information in 2009, and continue to do so yearly through the end of the 2012 lease sale program, or until a sale is held.

If there is sufficient industry interest the agency would proceed with the appropriate NEPA analysis.

Federal sales held

Four federal lease sales have been held in the Cook Inlet planning area, beginning in 1977. The most recent scheduled sale, in 2004, drew no bids.

Thirteen exploration wells have been drilled on federal leases in Cook Inlet; all have been permanently plugged and abandoned. Two leases from a 1997 sale, part of the Cosmopolitan unit, are under suspension of operations; that unit is being developed from onshore.

In a 2006 update of an Alaska OCS Region report on undiscovered resources in the Alaska federal offshore, MMS estimated the mean undiscovered technically recoverable resources from the Cook Inlet planning area at 1.01 billion barrels of oil and 1.2 trillion cubic feet of gas.

The Cook Inlet federal area is offshore just south of Kalgin Island and the Barren Islands and continues south through Shelikof Strait to just above the southern tip of Kodiak Island. There are 1,093 whole and partial blocks covering some 2.1 million hectares (about 5.3 million acres). The area is offshore from three to approximately 60 nautical miles in water depths of about 30 feet to some 650 feet.



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