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Preliminary BIF out for Alaska Peninsula Division of Oil and Gas more positive about petroleum potential based on work done by DGGS and DO&G since first BIF in 2005 By KRISTEN NELSON Petroleum News
The Alaska Department of Natural Resources, Division of Oil and Gas, has issued a preliminary best interest finding for proposed Alaska Peninsula areawide oil and gas lease sales from 2015 through 2024.
The division has concluded that the Alaska Peninsula sale area “likely contains all the essential elements of petroleum systems,” although there is uncertainty about whether those elements combined in a timely fashion “to create major economic hydrocarbon accumulations,” a more positive conclusion than the division reached in the original 2005 best interest finding.
The Alaska Peninsula areawide sale covers some 4 million gross acres onshore and 1.75 million gross acres of offshore state waters, with 1,047 tracts from 640 to 5,760 acres on the north side of the Alaska Peninsula.
Bill Barron, director of the Division of Oil and Gas, has preliminarily found that holding the Alaska Peninsula areawide oil and gas lease sales from 2015-24 is in the best interest of the state. Comments on the preliminary finding are due Aug. 29; a final best interest finding will be issued at least 90 days before a lease sale is held in 2015.
The decision also includes a preliminary finding that potential benefits of the exploration phase outweigh possible negative effects.
Significant new oil and gas information The decision says that significant new information on the petroleum resource potential of the Alaska Peninsula has become available since the previous best interest finding was issued in 2005.
The new information is the result of several years of “integrated field and subsurface research” in the region led by geologists from DNR’s Division of Geological and Geophysical Surveys and the Division of Oil and Gas.
The division said an estimated mean undiscovered, technically recoverable onshore estimate for Alaska Peninsula resources by the U.S. Geological Survey in 1996 of 9 million stock tank barrels of oil and 188 billion cubic feet of natural gas was based “on very little data.” The division said that its staff, having participated in field and subsurface petroleum systems research in the area, “are of the opinion that future resource assessments, if informed by a robust, regionally extensive grid of modern seismic data, would likely result in much higher estimates of undiscovered oil and gas.”
In its 2005 best interest finding the division said, “Hydrocarbon potential for the northern coastal plain between Becharof Lake and a narrow strip of coastline opposite Cold Bay is expected to be moderate to locally high for gas, and low to moderate for oil.”
Previous exploration The Alaska Peninsula was first explored in the early 1900s, the division said, with the first wells drilled on the southeast side near active oil and gas seeps. From the late 1950s through the early 1980s, exploration shifted to the northwest side of the Alaska Peninsula. In all, 35 exploration wells were drilled, 11 within the sale area.
The state offered its first areawide sale on the Alaska Peninsula in 2005 and received bids on 37 tracts, 33 from Shell Offshore Inc. and four from Hewitt Mineral Corp. All these tracts were in the Nelson Lagoon, Herendeen Bay and Port Moller areas.
Hewitt Mineral acquired one tract in 2007, southwest of Herendeen Bay, adjacent to their other acreage.
All these leases were relinquished, in 2008 by Shell and in 2010 by Hewitt.
The state has received no bids on Alaska Peninsula tracts since 2007.
The division said nearly all wells in the area had at least modest shows of oil and gas, but there have been no commercial oil or gas discoveries or sustained production from state lands on the peninsula.
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