MMS issues call for information for the 2006 Alaska Cook Inlet OCS lease sale

The Minerals Management Service has issued a call for information for Cook Inlet Sale 199, proposed for May 2006. The federal outer continental shelf area in Cook Inlet remains relatively unexplored, the agency said: the last exploration well was drilled in 1984.

“MMS’s goal is to keep options open both nationwide and in the state in the search for new energy,” MMS Regional Director John Goll said in a Dec. 27 statement. “By holding predictable sales in the federal portion of Cook Inlet we will complement the state’s strong program to find the energy and raw materials to keep the state’s economy growing. We hope this sale will be an added incentive for someone to bring a drill rig into Cook Inlet.”

MMS issued an environmental impact statement in November 2003 that covered both sale 191, which received no bids when held in May 2004, and sale 199. The environmental analysis for sale 199 will focus on issues that may have arisen since the completion of the EIS, and will look at “impact types and levels that may have changed” since the analysis was done for sale 191.

The area includes some 2.5 million acres offshore the state of Alaska in the Cook Inlet planning area, 517 whole or partial blocks.

MMS said it is requesting “interest in and comment on” any federal acreage that companies wish to have included in sale 199. Nominators are to depict tracts of interest on the request for information map and submit a list of blocks of interest, and a ranking of those blocks according to priority of interest, high or medium.

The agency is also seeking comments “on potential conflicts with approved local coastal management plans that may result from the sale and future OCS oil and gas activities.”

The request for information was published in the Federal Register Dec. 27 and there is a 45 day comment period. Area identification for the sale is scheduled for February; a National Environmental Policy Act environmental assessment review or supplemental EIS for October 2005; proposed notice and consistency determination December 2005; final notice of sale April 2006; and tentative sale date May 2006.

MMS said it is evaluating a package of economic incentives for the sale, including a longer primary term of eight years, lower minimum bid of $10 per acre, annual rental rates of $2 per acre and royalty suspension volumes. The royalty suspension volumes would relieve royalty payments on up to the first 30 million barrels of oil equivalent. MMS said the suspension applies to both oil and natural gas and includes price floor and ceiling thresholds.