DNR evaluating Nenana exploration license

Petroleum News

The Alaska Department of Natural Resources, Division of Oil and Gas, said March 15 that it intends to evaluate an oil and gas exploration license proposal for the Nenana area. The division put out a call for proposals for oil and gas exploration licenses in the Nenana area in January, following a preliminary determination at the end of November which identified acreage west of Nenana which would be available for exploration licensing. Proposals were due March 8.

The division said it received a proposal and is now requesting additional proposals, with a deadline for a notice of intent to submit a proposal set for April 16 and proposals due May 14.

The division said that if competing proposals are received and the DNR commissioner finds an exploration license should be issued, he will request competitive sealed bids from each applicant.

Unlike the state’s lease sales, with the state accepting bids on each tract and the winning bidder paying that money to the state, the applicant for an exploration license bids a dollar amount for work, such as seismic, that it proposes to do.

Exploration licensing is intended to encourage exploration in areas far from infrastructure, with unknown hydrocarbon potential and where there is a higher investment risk to the operator, the division says on its website. It does not apply to areas subject to areawide lease sales.

- Petroleum News