Alaska oil and gas lease sales draw scant interest
ANCHORAGE, Alaska |
ANCHORAGE, Alaska (Reuters) - Only five bids were received in a state of Alaska lease sale that offered exploration rights to 4 million onshore and offshore acres, and no bids were received in a second sale that offered exploration rights to 5.8 million acres, according to results released Wednesday by the state Division of Oil and Gas.
One independent energy company and a group of individual investors put up a collective $110,009 in high bids for rights to 7,685 acres in southern Alaska's Cook Inlet basin. The aged basin holds Alaska's oldest producing oil fields and is the source of natural gas used in the major population centers in Alaska.
The high bidders and apparent winners of four Cook Inlet tracts were Alaskan New Energy LLC and a group of private investors.
The paltry lease-sale showing was no surprise, said Jonne Slemons, the division's petroleum land manager.
"It's certainly not unexpected when you consider the contraction in the economy and the fact that many companies are scaling back on drilling and exploration," said Slemons, who opened the sealed bids at a public event Wednesday.
Meanwhile, a lease sale offering onshore and offshore exploration rights in the Alaska Peninsula in the southwestern part of the state drew no bids. No bids were received in last year's Alaska Peninsula lease sale either, and only one bid was offered in the 2007 lease sale.
The state began holding annual lease sales for the Alaska Peninsula in 2005 at the initiative of then-Gov. Frank Murkowski, who said petroleum exploration offered an opportunity to diversity a regional economy that was heavily dependent on commercial salmon fishing. The area is also considered to be prospective for natural gas and small amounts of oil.
Energy companied did not share Murkowski's enthusiasm for development in the region, which is isolated from oil and gas infrastructure and the state's road system.
Only one company -- Hewitt Minerals Corp of Oklahoma - currently holds oil and gas leases in the region. Shell (RDSa.L), which spent about $1 million in 2005 acquiring exploration rights there, has relinquished all its leases.
Slemons said state officials have considered dropping the Alaskan Peninsula leasing program. But if the U.S. Minerals Management Service decides to lease its adjacent offshore territory in the North Aleutian Basin, state lands and waters of the Alaska Peninsula might become attractive to industry, she said.
"I doubt we would make any firm decision until we know what the five-year OCS (outer continental shelf) plan will be," she said.
(Reporting by Yereth Rosen; Editing by Lisa Shumaker)
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