Alaska proposes 16 state lease sales over 5 years

Jan. 12, 2001
The Alaska Division of Oil and Gas has proposed holding annual oil and gas lease sales in the Cook Inlet, Beaufort Sea, and North Slope areas through the year 2005. It also proposed a single North Slope Foothills area-wide sale be held concurrently with the Cook Inlet sale next May.


After a temporary suspension of regular oil and gas lease sales, Alaska has issued a 5-year lease sale schedule which proposes 16 sales through the year 2005.

Gov. Tony Knowles said Thursday, "After some juggling with the lease sale schedule over the past couple of years due to uncertainties surrounding the BP-Atlantic Richfield Co. merger, we have settled down to a schedule that provides the predictability desired by industry. It also allows for public input during the fall and winter months, when residents of these areas have more time to focus on the issues."

The Alaska Division of Oil and Gas's schedule proposes annual area-wide sales in the Cook Inlet each May. Beaufort Sea and North Slope area-wide sales would be held each October. It would decide 9 months beforehand whether a sale would be held as scheduled.

A single North Slope Foothills area-wide sale would be held concurrently with the Cook Inlet sale next May. Thereafter, Foothills tracts would be available under the division's exploration licensing program.

The division will decide in February whether to hold the North Slope Foothills sale, which would offer 7 million acres of state lands between the National Petroleum Reserve-Alaska and the Arctic National Wildlife Refuge, south of the Umiat Baseline and north of the gates of the Arctic National Park and Preserve.

Under area-wide leasing, the state offers all available state land within a geographical region. Since it began the program in 1998, Alaska has held six area-wide sales, leasing 1.6 million acres for nearly $68 million in bonus bids.

Under the state's exploration licensing program, the applicant commits to exploration expenditures rather than paying an up-front bonus to the state, as in conventional leasing. When the work commitment is met, the licensee pays a $3/acre/year rental fee and a 12.5% royalty on production.

The division has two exploration licenses pending. In April it will make a recommendation on Forest Oil Corp.'s application for two 474,240-acre licenses in the Susitna Valley west of the Susitna River. After evaluating public comments, the division will determine in October whether to grant the licenses.

The state also is considering more than 260 applications under its shallow gas leasing program. Begun last year, that program encourages development of low-cost energy for remote villages. The leases are valid for gas produced above 3,000 ft and carry a 6.25% royalty. So far, the state has only approved leases near the Red Dog Mine in northwestern Alaska.