Nick Snow
Washington Editor
WASHINGTON, DC, Feb. 7 -- Oil and gas producers submitted $2.66 billion in apparent high bids in a record-breaking offshore federal lease sale in Alaska, the US Minerals Management Service said Feb. 6.
The 677 bids on 488 blocks in the first Chukchi Sea lease sale since 1991 made it the most successful Outer Continental Shelf lease sale in Alaska's history, MMS said. Shell Gulf of Mexico Inc. submitted the single largest bid—more than $105.3 million. Shell also led in total bids, with 302 totaling nearly $2.2 billion, 275 of them high bids for nearly $2.12 billion.
ConocoPhillips was the second most active bidder, submitting 145 bids for $1.1 billion, including 98 high bids for more than $506.4 million. Other participants included Repsol E&P USA Inc. with 104 total bids for $15.6 million, 93 of which were high bids for more than $14.4 million and Eni Petroleum US Inc. with 74 total bids for nearly $35 million, 17 of which were high bids for nearly $8.9 million.
StatoilHydro USA E&P Inc., Iona Energy Co. (US) Ltd., and North American Civil Recoveries Arbitrage Corp. also submitted high bids, according to MMS.
The US Department of Interior agency received nearly $3.39 billion in bids from the seven companies for 2,304-acre tracts spread over more than 29 million acres. It said that each high bid now will be evaluated to assure that it represents a fair market value before a lease is issued. The closest awarded tract to land is 54 miles offshore, MMS said.
The sale took place despite protests that oil and gas activity could pose a threat to polar bears, which another DOI agency, the US Fish and Wildlife Service, is considering listing as an endangered species. Interior Secretary Dirk A. Kempthorne and other DOI officials have said that the threat comes from melting sea ice and that the bears already have strong safeguards under the Marine Mammal Protection Act. Lease terms will include stringent environmental provisions, MMS Director Randall L. Luthi noted.
Oil industry and other groups expressed their support for the sale on Feb. 6. The American Petroleum Institute called it "a welcome first step toward increasing much-needed energy supplies for US consumers and the US economy."
Meanwhile, National Association of Manufacturers Pres. John Engler said production from the Chukchi Sea would reduce US dependence on foreign sources.
The US Oil & Gas Association said the area's oil and gas resources represent an important domestic energy opportunity which should not be ignored.
Contact Nick Snow at [email protected].
