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State opens first exploration license bids Opening scheduled Aug. 25 for 398,445-acre Copper River basin oil and gas license Kristen Nelson PNA News Editor
The Alaska Department of Natural Resources Division of Oil and Gas has scheduled a public bid opening Aug. 25 for an oil and gas exploration license for the Copper River basin. The exploration license contains 398,445.44 acres.
The division issued a best interest finding for the sale in July and prospective licensees, companies who have already submitted license proposals, were invited to submit final sealed bids no later than 4:30 p.m. Aug. 24. A bid deposit of $79,689.09 (20 percent of the license fee) was to be included with the bid. The winning bidder pays a licensing fee of $1 per acre.
The program, established by the Legislature at the request of Gov. Tony Knowles in 1994, provides that bids will be based on a dollar amount committed to an exploration program in the license area, and that the winning bidder will be the applicant who submits the highest bid in terms of exploration expenditures.
The license will have a primary term of five years and upon completion of a required work commitment, the licensee may convert all or a part of the license area to an oil and gas lease, which will have a primary term of five years. There is no annual rental fee for the exploration license, but upon conversion to oil and gas leases an annual rental of $3 an acre is required. The royalty on lands converted to oil and gas leases will be 12.5 percent. Request received in 1998 In April 1998, the division received a request for an exploration license over a portion of the Copper River basin and on May 15, 1998, the division issued a notice of intent to evaluate the proposal and asked for public comment and also for additional proposals. As a result of the solicitation, the division said, it has received more than one proposal. Since there is more than one applicant, the names and proposals are held confidential until after the license is awarded.
The preliminary finding was released this January, followed by a 60-day public comment period. Division staff also met with the Copper River Resource Development Council in Glennallen on June 6 for a roundtable discussion explaining the licensing process and what exploration activities residents could expect.
Applicants then had an opportunity to review the final finding, the final license area configuration and conditions placed on the license. And each applicant had an opportunity to submit a revised bid. The commissioner of the Department of Natural Resources makes the determination as to whether or not the winning bid is acceptable and, if so, awards the license.
The license area runs west from Glennallen on either side of the Glenn Highway and includes most of the length of the Lake Louise Road to the North. In the east, the boundary is close to the Richardson Highway. The southern boundary is south of Copper Center.
The Division of Oil and Gas describes the petroleum potential of the Copper River basin as low to moderate. Eleven exploration wells have been drilled in the basin, four in the license area: Consolidated Oil’s Tawawe Lake Unit 1, Unocal’s Tazlina 1, Copper Valley Machine Works’ Alicia 1 and Amoco’s Moose Creek 1.
The legislation enabling exploration licensing was introduced in 1993, passed by the Legislation and signed into law by the governor in 1994. Regulations implementing the program were promulgated in 1995.
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