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State, feds schedule back-to-back sales BLM NPR-A tracts divided into high and low priority; state tracts divided based on location, whether ASRC a joint owner with state Kristen Nelson Petroleum News
As they have in recent years, the state of Alaska and the federal Bureau of Land Management are holding back-to-back North Slope oil and gas lease sales in November.
The state sale, previously announced, will be at 9 a.m. Nov. 19 in the Dena’ina Civic and Convention Center in Anchorage. BLM will open bids at 1 that afternoon in the Denali Room on the fourth floor of the Anchorage Federal Office Building.
BLM will offer 270 tracts in the National Petroleum Reserve-Alaska covering some 3 million acres.
“The November sale is in line with the Administration’s commitment to expand domestic energy production,” BLM Director Neil Kornze said in a statement. He said BLM’s approach to NPR-A development ensures “that future production is done safely and responsibly while protecting the subsistence resources of Alaska Natives and the habitat of world-class wildlife populations.”
BLM sought public input on tract nominations for the sale in NPR-A planning areas not currently leased or deferred from leasing. The agency said it “made its selections based on evaluation of the comments received; natural resource information; resource potential; industry interest; and subsistence values.
The BLM NPR-A tracts are divided into high potential and low potential; both areas have 10-year primary terms.
For high potential tracts the minimum bid is $25 an acre, the royalty is 16.67 percent and the annual rent is $5 an acre. For tracts in the low potential area the minimum bid is $5 an acre, the royalty rate is 12.5 percent and the annual rent is $3 an acre.
State terms and conditions The state North Slope sale is divided into four sub-regions: north, south, adjacent to federal lands and lands jointly owned by the state and the Arctic Slope Regional Corp. All have 10-year primary lease terms.
For tracts adjacent to federal land in NPR-A and the Arctic National Wildlife Refuge, but excluding jointly owned ASRC-state tracts, the minimum bid is $10 an acre, with a 12.5 percent royalty and annual rental rates from $1 per acre in the first year to $3 per acre in the fifth year and beyond.
For tracts owned jointly by ASRC and the state the minimum bid is $25 an acre, the royalty rate is 16.67 percent and the annual rent is $10 an acre for years one through seven, and $250 an acre starting in year eight.
As with all tracts where the rent goes to $250 an acre, “beginning in the year after the year in which sustained production commences on the lease or the state otherwise determines in its sole secretion, upon request, that the lessee has exercised reasonable diligence in exploring and developing the lease,” the annual rental will be $10 an acre.
For all other tracts in the north sub-region the minimum bid is $25 an acre, the royalty rate is 16.67 percent and the annual rents begin at $10 an acre and jump to $250 an acre in year eight. For all other tracts in the south sub-region, the minimum bid is $25 an acre, the royalty rate is 12.5 percent and annual rents begin at $10 an acre and jump to $250 in year eight.
For the state’s North Slope Foothills sale the minimum bid is $10 an acre, the royalty rate 12.5 percent, the primary lease term 10 years and the annual rent rises from $1 an acre to a maximum of $3 an acre.
The state’s Beaufort Sea sale has three sub-regions, all with 10-year primary lease terms.
For tracts adjacent to federal land (outer continental shelf, NPR-A and ANWR), the minimum bid is $10 an acre, the royalty rate is 12.5 percent and rents range from $1 an acre in the first year to $3 an acre in the fifth year and beyond. For joint ASRC-state tracts, the minimum bid is $25 an acre, the royalty rate is 16.67 percent and the annual rent begins at $10 an acre and jumps to $250 an acre in the eighth year.
All other tracts in the state’s Beaufort Sea sale have the same terms as the joint ASRC-state tracts.
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