Investors bid on 48,000 acres in Beaufort Sea lease sale

Posted: Thursday, February 25, 2010

ANCHORAGE - Alaska received oil and gas lease bids for 48,000 acres in near shore waters of the Beaufort Sea on Wednesday in a sale that was criticized for offering drilling rights in sensitive marine waters.

The lease sale was off Alaska's northern coast between Barrow, America's farthest north community, and the village of Kaktovik 325 miles to the east. Bidders focused on tracts in the middle third of the area, said oil and gas leasing and permitting manager Jonne Slemons.

The state received 18 bids totaling $823,468.80. State waters extend three miles from shore.

Alaska Native groups and environmental organizations said the sale did not consider concerns of people who live nearby. Robert Thompson of Kaktovik, an Inupiat Eskimo community of 272, said the sale ignores concerns of subsistence hunters who depend on marine waters.

"Can oil be cleaned up in the Arctic Ocean? This question has not been answered," he said. "The questions regarding cumulative effects are not answered."

Pam Miller of the Northern Alaska Environmental Center in Fairbanks said five Alaska Native and environmental groups appealed the state's finding that Alaska's 10-year lease sale plan was in the public interest. The Alaska Department of Natural Resources rejected their argument and the groups are appealing in state court.

The offshore development threaten whales, seals, birds, polar bears and people who rely on a subsistence lifestyle, Miller said. The lease sale Wednesday was the first covered by the 10-year plan, Miller said.

Bids totaled $823,468.80 and are considered preliminary, Slemons said. There were no competing bids for any tracts. She said the state Division of Oil and Gas was happy with the results.

"It's lower than last year, but given the state of the economy and the recession that we're dealing with, we felt that it was a very respectable result."

Sun-West Oil & Gas, Inc. and Michael Shearn bid on one tract near the Point Thomson area, Slemons said. Daniel K. Donkel and Samuel H. Cade bid on seven tracts. GMT Exploration Co. bid on 10 tracts.

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