BLM sets unitization rule for Alaska petroleum reserve


The US Bureau of Land Management has proposed a rule that would allow oil companies to unitize their leases in the National Petroleum Reserve�Alaska.


The US Bureau of Land Management has proposed a rule that would allow oil companies to unitize their leases in the National Petroleum Reserve�Alaska.

BLM leased 134 tracts in the northeastern corner of NPR�A, west of Prudhoe Bay field on the North Slope, to oil companies for $134 million last year (OGJ, May 17, 1999, p. 33).

The rule, published in the Apr. 26 Federal Register, also allows BLM to waive, suspend, or reduce rents or royalties for NPR�A leases. It would give the agency powers to suspend operations and production on those leases and to set the primary lease term at 10 years. And the regulation would allow operators to store gas in existing geologic structures on NPR�A if they pay a fee to the federal government.

BLM said the unitization rule would emphasize up-front negotiation among the interest owners and BLM. �Operators would be able to use any agreement format in their unit agreement as long as it addressed the following four basic issues: unit area; initial and continuing development obligations; productivity criteria and participating areas; and BLM�s ability to set or modify the quantity, rate, and location of development and production.�

The agency said the proposed regulations are intended to recognize the unique climatic conditions of NPR�A, the needs and practices of the oil industry in light of those conditions, and the need to protect natural resources. BLM is accepting public comment on the proposed rule until June 26.

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