Alaska royalty board to meet

The state’s proposed contract to supply crude oil to Tesoro for its Kenai Peninsula refinery will be among the topics on the agenda for an upcoming meeting of the Alaska Royalty Oil and Gas Development Advisory Board.

The board’s job is to “facilitate wise development” of Alaska’s oil and gas royalty interests. The board has eight members: five public members appointed by the governor plus the state commissioners of commerce, natural resources and revenue.

Bob Roses, a former state legislator, is currently board chairman.

The state’s share of oil and natural gas produced from leased, state-owned land is referred to as royalty oil and gas. Sales of royalty oil and gas generate major revenue for the state.

The Department of Natural Resources is proposing a one-year contract to sell 5,000 to 15,000 barrels per day of North Slope royalty crude oil to Tesoro, which operates a refinery at Nikiski.

DNR projects the sale will provide $189 million to $568 million in revenue to the state over the course of the contract.

Kevin Banks, a DNR petroleum market analyst, told Petroleum News he plans to provide a briefing to the royalty board on the Tesoro contract.

In part because of the contract’s short term, legislative approval and a board recommendation to the lawmakers isn’t needed, Banks said.

“If Tesoro wants to extend this contract or have a new multiyear contract that starts after this one, the royalty board has to weigh in,” he said.

Banks said the board also has requested that he “tell them a bit about how the state sets its lease and lease sale terms and conditions.”

The royalty board is scheduled to hold its public meeting at 1 p.m. Oct. 30 in room 1270 in the Atwood state office building at 550 W. 7th Ave. in downtown Anchorage.

—Wesley Loy