|
Most bids confidential
Kristen Nelson
Anadarko Petroleum Corp. and AEC Marketing (USA) Inc. handed out copies of the joint offer they submitted Feb. 1 to buy the state’s North Slope royalty gas.
Information on the other three offers the state received is scanty or confidential, in spite of an obvious desire by the state to make information available. (See story above.)
Kevin Banks, petroleum market analyst with the Division of Oil and Gas, told PNA Feb. 6 that the bid from Alaska Power and Telephone Co. is for 1.6 million cubic feet a day (the state offered approximately 350 million cubic feet a day). The company said it would pay what the state receives for royalty-in-value gas for the royalty-in-kind gas and offered no premium. Banks said Alaska Power provided a white paper explaining that they would use the gas for customers in Tok and Dot Lake, and also to generate electricity.
The Chevron U.S.A. Inc. bid is for 375 million cubic feet a day with an offering a price “based on the RIV value,” a non-monetary mechanism for the option to reduce volumes and a non-monetary benefit. Banks said Chevron wants details of the proposal kept confidential.
The Williams Energy Marketing and Trading Co. proposal is entirely confidential, Banks said. Williams said in a statement that it is the company’s standard practice to submit all such responses to bid requests under confidential terms and conditions. Anadarko-AEC The Anadarko-AEC offer includes a minimum cash bonus of $350,000, based on the assumption that the 70 percent of the state’s royalty Alaska North Slope gas offered for sale will be 350 million cubic feet a day. The base price would be the royalty-in-value price and the companies offered a price premium of 2 cents per million Btu for each MMBtu purchased during the primary term with an increase of 2 cents per MMBtu for each subsequent five-year renewal period.
Anadarko-AEC also offered an option payment of $2 million for each five-year term with an initial payment of $2 million upon execution of a contract and approval by the Legislature. In-state investments Anadarko and AEC committed to a $50 million five-year exploration work commitment, 2002 through 2007. If they fail to meet the $50 million work commitment, they will pay the state the difference.
Northern Economics Inc. did a socioeconomic impact assessment for Anadarko and AEC and found, the companies said, that if they continue their exploration efforts beyond the five-year $50 million commitment, and if their efforts result in a commercial gas discovery, the economic multiplier effect and state tax assessments would result in an overall benefit to the state of $6.4 billion.
In addition, the Anadarko-AEC offer includes a preference for local hire and a preference for in-state gas processing — natural gas liquids extraction and petrochemical manufacturing.
| 