Interior has 6 Cook Inlet sales on new offshore leasing schedule

Kristen Nelson

Petroleum News

The U.S. Department of the Interior said Aug. 19 that it will offer at least 30 lease sales in the Gulf of America and six in the lower Cook Inlet from 2025 through 2040. The lower Cook Inlet sales are all slated for March, and will occur in 2026, 2027, 2028, 2030, 2031 and 2032.

Interior Secretary Doug Burgum called it "a bold, long-term program that strengthens American Energy Dominance, creates good-paying jobs and ensures we continue to responsibly develop our offshore resources."

In its announcement Interior said: "Alaska plays a vital role in America's energy future, and Cook Inlet, along Alaska's southcentral coast near Anchorage, is the center of that opportunity."

The Bureau of Ocean Energy Management lists 11 active leases in Alaska outer continental shelf waters -- three off the North Slope, all in production, and eight in the lower Cook Inlet, one of which, from the most recent sale, is shown with a suspension expiration date; the other seven expire Sept. 30, 2027. Hilcorp Alaska holds all the Alaska OCS leases. Those in Cook Inlet are west and southwest of Anchor Point.

Lower Cook Inlet

While being subject to the large tidal range observed in the entire Cook Inlet, the waters of the lower inlet are relatively deep, thus presumably necessitating the use of a large jack-up drilling rig. The need to bring a large rig to the region, coupled with the remote location and challenging winter conditions, would presumably render exploration and development relatively expensive. There are also the complexities of permitting of oil and gas exploration and development activities offshore in Cook Inlet.

Hilcorp has shown an interest in exploration drilling in the region for a number of years. In a 2017 lease sale the company acquired 14 leases in the inlet, southwest of Kachemak Bay. The company subsequently conducted offshore 3D seismic surveying during the summer of 2019 -- the company appeared interested in an oil prospect penetrated in 1982 by ARCO's Raven No. 1 well. The prospect, about halfway across the inlet, due west of the town of Homer, contains a known oil resource in a Cretaceous reservoir. Apparently the new seismic survey revealed a 65,000-acre, four-way closure with the oil discovery at the top.

In 2021 the company appeared to indicate a plan to conduct some drilling by conducting a geohazard survey in its leases. However, there have been no reports of the company carrying out further activity in the area since then. Apparently the Spartan-151 jack-up rig that the company acquired for drilling in the upper Cook Inlet is too limited for operation in the company's lower Cook Inlet prospect.

--Kristen Nelson & Alan Bailey