BLM sets NPR-A bid opening for Nov. 6
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Agency offers 408 tracts covering 4.5 million acres for lease in a broad area east to west through the central part of the reserve
Alan Bailey Petroleum News
The federal Bureau of Land Management has set bid opening for its 2013 National Petroleum Reserve-Alaska oil and gas lease sale for 1 p.m. on the afternoon of Nov. 6. The State of Alaska previously announced bid opening for its fall North Slope, Beaufort Sea and Foothills oil and gas lease sales for the morning of that same day.
The same-day sales are aimed at allowing bidders to acquire acreage on both state and federal lands simultaneously.
BLM said in a Sept. 30 Federal Register notice that sealed bids are due Nov. 4, with the Nov. 6 opening of the bids taking place at the BLM offices in Anchorage.
President Obama has directed BLM to hold annual lease sales in NPR-A as part of his strategy for the development of U.S. energy resources, the agency said.
“The energy resources of the National Petroleum Reserve in Alaska are essential to meeting our nation’s energy demands and will enhance domestic energy production and decrease dependency on foreign oil sources,” said Bud Cribley, BLM-Alaska state director. “The November sale is in line with the president’s direction to continue to expand domestic energy production, safely and responsibly.”
408 tracts The agency is offering for lease 408 tracts covering a total area of about 4.5 million acres in a broad swath of land running west to east across the central and eastern parts of the reserve. This represents a bit less than half the total acreage that might have been offered from land earmarked for potential oil and gas exploration in BLM’s NPR-A activity plan.
During the summer BLM invited nominations and comments on tracts that might be made available in the sale, to gauge industry interest and give conservation groups and other stakeholders an opportunity to provide input to the scope of the sale — the selection of tracts for inclusion in the sale was “based on evaluation of comments received, natural resource information, resource potential, industry interest and subsistence values,” BLM said.
When recent NPR-A lease sales began in 1999, BLM included in sales all land tracts available for lease within what were then the Northwest and Northeast planning areas of the reserve. However, in 2011 the agency began asking for nominations for tracts prior to sales, to limit the sales to those tracts that industry might want to bid on.
Activity plan And following the issuance in February of BLM’s new integrated activity plan for the entire NPR-A, this year’s lease sale encompasses the whole of the reserve, albeit with large chunks of the reserve deemed by that plan to be out of bounds for oil and gas leasing. BLM said that the land on which oil exploration could take place likely holds about 72 percent of the undiscovered oil in NPR-A. But some people have expressed vehement concern that BLM’s plan excludes from leasing much of the northern part of the reserve, a region that may be highly prospective for oil and gas.
The lease sale does include the handful of remaining unleased tracts in the extreme northeast of NPR-A, an area that BLM categorizes as “high potential” and where ConocoPhillips has been conducting an active exploration program. ConocoPhillips is in the process of developing what will be the first operational oil field in NPR-A in what the company refers to as its CD-5 project, in the northeastern part of the high-potential area.
Land tracts in the high-potential area are half the size of tracts on offer elsewhere in the reserve and require relatively high bids of at least $25 per acre. The rental rate on high potential tracts is $5 per acre. Elsewhere in the reserve the minimum bid per tract is $5 per acre, with a rental rate of $3 per acres. And should oil be successfully developed in any of the tracts, the royalties from oil production would be 16 2/3 percent in high-potential tracts and 16 1/2 percent elsewhere.
Detailed information on the sale is available on the BLM Alaska website at www.blm.gov/ak.
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