By OGJ editors
HOUSTON, Dec. 2 -- The Minerals Management Service has issued a proposal for Lease Sale 191 in Alaska's Cook Inlet and scheduled the Proposed Notice of Sale for May 19, 2004. The sale itself along with Sale 199 is scheduled for May 2006. MMS has released a single final environmental impact statement that evaluates both sale areas.
The Cook Inlet lease area, in federal waters 3-30 miles offshore, covers about 2 million acres extending from just south of Kalgin Island to just northwest of Shuyak Island, in water 30-650 ft deep.
MMS estimates that the area may exceed 1 tcf of conventionally recoverable natural gas.
Shelikof Strait is excluded from the proposed sale area, as is a narrow band of blocks off the lower Kenai Peninsula and the Barren Islands, areas that are used by residents of Port Graham, Nanwalek, and Seldovia for subsistence and which also are critical habitat for the endangered Stellar sea lion. MMS estimates that the deferred areas have little chance of oil or gas resource discovery and production.
The sale offers for the first time a package of economic incentives for Cook Inlet federal waters that include a longer primary term of 8 years, lower minimum bid ($25/hectare) and annual rental rates ($5/hectare), and royalty suspension volumes. The RSV's would relieve royalty payments on a producing lease up to the first 30 million boe. The suspension applies to both oil and natural gas, and includes price floor and ceiling thresholds.