ANCHORAGE, Alaska-The Department of the Interior’s Bureau of Land Management (BLM) announced that yesterday’s oil and gas lease sale in the National Petroleum Reserve in Alaska (NPR-A) generated winning bids totaling $3,637,477 and covering 17 tracts on about 141,739 acres. The sale demonstrated industry interest in areas with high resource potential adjacent to State of Alaska lease tracts along the Colville River on the North Slope and reflected the Obama administration’s commitment to encouraging development and expansion of America’s energy economy.

On May 14, 2011, President Obama directed the Department of the Interior to conduct annual oil and gas lease sales in the NPR-A. Today’s lease sale comes in response to the President’s announcement, which emphasized the need to protect sensitive areas while providing development opportunities.

The sale coincided with a State sale of oil and gas tracts near the NPR-A and follows the recent announcement that two federal agencies have reached an agreement in principle with ConocoPhillips regarding the company’s proposed Alpine Satellite Development Plan (CD-5) in the NPR-A that supports the construction of a pipeline and bridge over the Nigliq Channel of the Colville River. This proposed infrastructure would be the first pipeline and all-weather road into the NPR-A, which is expected to spur further exploration and development of the 23 million-acre reserve managed by the Bureau of Land Management. The U.S. Army Corps of Engineers is expected to carry out the remaining steps associated with the permit review in the coming weeks.

“As industry begins to build infrastructure and explore and develop oil and gas in this area of the North Slope of Alaska, we expect to harness the energy and economic benefits of the NPR-A for our nation,” said Secretary of the Interior Ken Salazar. “In support of the President’s energy priorities, this lease sale in the NPR-A is an important part of our efforts to develop domestic resources on public lands safely and responsibly.”

“As stewards of the natural resources on Alaska’s public lands, we must continue to facilitate safe and responsible development and find ways to expand opportunities to explore, develop and deliver energy resources from the NPR-A,” said Deputy Secretary David J. Hayes, who serves as Chair of the President’s Interagency Working Group on Coordination of Domestic Energy Development and Permitting in Alaska and who facilitated the discussions leading to the agreement on the Colville bridge/pipeline.

At the BLM sale in Anchorage, three companies submitted winning bids for the right to develop oil and gas tracts in the NPR-A. The winning bids were received from 70 & 148, LLC, Woodstone Resources, LLC and ConocoPhillips Alaska, Inc. The single highest bid of $490,299, or $101.03 per acre, was offered by 70 & 148, LLC for tract H-160, which is located near the Colville River, adjacent to tracts that were offered by the State in its sale.

The State of Alaska will receive 50 percent of the bid receipts, or $1,818,738.50, generated by the lease sale as well as 50 percent of the annual rental revenue generated from the individual leases. After the sale, an economic evaluation of bids will be conducted and the leases will be issued by mid-April.

The BLM offered 283 tracts comprising approximately 3,060,176 acres in this sale. The tracts covered land available for oil and gas leasing within Northeast and Northwest NPR-A planning areas and included 178 tracts (1,817,186 acres) within Northeast NPR-A and 105 tracts (1,242,990 acres) in Northwest NPR-A.

Presently, there are 169 leases covering 1,361,105 acres in the Northeast and Northwest planning areas. Two units have been approved in Northeast NPR-A: the Greater Mooses Tooth and the Bear Tooth. Both units are operated by ConocoPhillips Alaska, Inc.

A map and table with complete sale results by tract are posted here.

The Colville bridge-pipeline agreement in principle with ConocoPhillips was announced on Monday and fulfills a request from the U.S. Army Corps of Engineers – the federal agency charged with permitting the project – that the U.S. Fish & Wildlife Service and the Environmental Protection Agency evaluate the environmental impacts associated with ConocoPhillips’ revised project.

The agreement in principle confirms that the construction of a pipeline and bridge over the Nigliq Channel of the Colville River is acceptable to the resource agencies so long as the permit application includes conditions that reflect agreements reached among the company and federal resource management agencies. The conditions include engineering changes and substantial mitigation proposed by the company based on consultations with the resource agencies. The company has also agreed to allow other companies that develop leases in the NPR-A to use the same crossing, rather than seek approval for additional crossings in the area. This approach will reduce the environmental impacts associated with development of existing and future leases in the NPR-A west of the Colville River.

Source: Department of the Interior