State's N. Slope oil lease sale rakes in $31 million

Posted: Friday, March 03, 2006

ANCHORAGE - A state oil and gas lease sale generated more than $31 million in winning bids for acreage on the North Slope and the nearshore waters of the Beaufort Sea.

The amount was more than twice that tallied for the last lease sale for the same regions in 2004.

"I'm thrilled," said Bill Van Dyke, state oil and gas director and announcer for the sale in Anchorage. "It reinforces the fact that the North Slope is still a great place to look for oil and gas."

With oil and gas prices running exceptionally high for two years now, companies have more money to spend on lease sales, Van Dyke said.

Several companies and a handful of individuals submitted winning bids totaling $16.3 million for North Slope acreage and just shy of $15 million for Beaufort Sea tracts.

The total was well in excess of the $12 million tallied the last time the areas were offered for lease in 2004.

BP Exploration (Alaska) Inc. offered just over $5 million on a single Beaufort Sea tract. The tract is between BP's Endicott field and the untapped Liberty discovery offshore to the east. BP recently announced plans to develop Liberty using long-reach drilling from shore.

Unocal also made an unexpectedly strong showing. It was the high bidder on 48 North Slope tracts covering 276,480 acres, with the bids totaling nearly $7 million. Most of the tracts were concentrated south of the Kuparuk oil field.

Chevron, which bought Unocal, already is a minor player on the North Slope, holding small ownership stakes in the Kuparuk and Endicott fields and the trans-Alaska oil pipeline.

Conoco Phillips had $5.1 million in winning bids, most concentrated on Beaufort Sea tracts.

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