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Vol. 15, No. 33 Week of August 15, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

NPR-A sale: Only 1 bidder, 5 tracts

Kristen Nelson

Petroleum News

The Department of the Interior’s Bureau of Land Management had one bidder at its 2010 National Petroleum Reserve-Alaska northeast planning area oil and gas lease sale.

When bids were opened in Anchorage Aug. 11, ConocoPhillips Alaska Inc. offered $799,995 for five tracts.

The company appeared to be filling in around existing acreage.

One tract, west of Nuiqsut and on the eastern edge of the ConocoPhillips-operated Moose’s Tooth unit, is a tract that ConocoPhillips previously held in partnership with Anadarko Petroleum Corp. (78 percent ConocoPhillips, 22 percent Anadarko).

Two adjacent tracts, on the southwestern edge of the Moose’s Tooth unit, were previously held by a partnership of ConocoPhillips (50 percent), Anadarko (30 percent) and Pioneer Natural Resources Alaska (20 percent).

The other two tracts are adjacent south of the unit.

The tracts range in size from 5,583 acres to 5,760 acres. ConocoPhillips paid an average of $28.13 per acre for the tracts, with tract bids ranging from $178,930 ($31.86 per acre) for tract H42 west of Nuiqsut, to $144,100 ($25.81 per acre) for tract H14 south of Moose’s Tooth.

190 tracts offered

BLM began its current NPR-A lease sale program in 1999, and received $104.6 million in high bids for 133 tracts (867,514 acres) in that first sale, the most successful of the sales. BLM also held NPR-A sales in 2002, 2004, 2006 and 2008. The smallest of the earlier sales was in 2006, with high bids totaling $13.8 million on 81 tracts.

BLM cut a broad swath of lands south of Teshekpuk Lake, some half a million acres, from the 2010 sale offering between the original proposal and the final sales announcement in July, reducing the original offering of 241 tracts and 2.3 million acres to 190 tracts and 1.8 million acres.

The agency did not explain the entire half-million acre withdrawal, but said generally that lands in a buffer zone around the lake were withdrawn because of the importance of the lake to migratory birds, citing “internationally significant molting habitat for black brant, Canada geese and greater white-fronted geese” around the lake.

BLM also said this sale held back some 170,000 acres south of Teshekpuk Lake “because of migratory bird and caribou habitat concerns.” The Teshekpuk caribou herd has almost doubled in recent years and BLM said the herd’s biology justified holding back leases south of the lake so it can update its understanding of the herd’s needs and land use; the herd is important to village subsistence hunters, who take about 5 percent of the herd in an average year.

Goal is sales every two years

Julia Dougan, acting BLM-Alaska state director, said after the sale that the agency’s goal is to hold lease sales “on a regular recurring basis, usually about every two years, so the industry can count on that availability of tracts.”

She said there was less interest in the sale this year, but said, “We did see ConocoPhillips consolidating their holdings around their existing leases, so that tells me they are still committed to NPR-A development and are really looking at how to have the most effective working unit out there.”

Another sale is not currently scheduled because BLM is for the first time doing a comprehensive plan across all 22 million acres of NPR-A, Dougan said.

That plan is expected to be completed in late 2012, and another sale won’t be held before the planning process is complete, Dougan said, because “that planning process should lead us to what tracts are available for leasing.”



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