June 29, 2011 / 12:43 AM / 8 years ago

Gas, oil abundant in Alaska's Cook inlet-report

ANCHORAGE, Alaska, June 28 (Reuters) - Alaska’s Cook Inlet basin still has potential for abundant natural gas and oil discoveries even after five decades of production, according to a federal report issued on Tuesday, signaling potential revenue for the state and more interest from developers.

In the first resource assessment issued since 1995, the U.S. Geological Survey said the inlet area likely holds 19 trillion cubic feet of recoverable natural gas — nearly nine times the last estimate — and 600 million barrels of recoverable crude oil.

The new report is much more optimistic about remaining natural gas in the inlet than the assessment issued 16 years ago, a difference the USGS attributed to improved data, new geologic information and better technology for recovering the oil and gas.

In 1995, the USGS estimated that Cook Inlet likely had 2.14 trillion cubic feet of gas remaining to be discovered.

The new report includes the first-ever estimates for unconventional natural gas in Cook Inlet, most of which is coal gas and which accounts for a quarter of total estimated undiscovered natural gas resources. That was not included in the 1995 report as it was not then considered recoverable.

The Cook Inlet basin, in production since the 1950s, is older than the more prolific North Slope. Since 1958 the Cook Inlet basin has produced 1.3 billion barrels of oil and 7.8 trillion cubic feet of natural gas, according to the USGS. Oil has been mostly refined for regional markets, while natural gas has fueled regional utilities and been liquefied for export to Japan and other countries.

The new USGS report comes a week after a state-sponsored oil and gas lease sale for Cook Inlet drew brisk bidding, including $9 million from Apache Corp (APA.N). The total $11.1 million in high bids made it the fourth most lucrative Cook Inlet lease sale in state history.

Alaska political leaders hailed the USGS report as good news for the mature basin.

“On the heels of last week’s strong Cook Inlet lease sales, drill rigs potentially headed to the Inlet this summer, and now a resource assessment that multiplies the 1995 estimate of natural gas reserves by nearly a factor of 10, prospects are strong for the industry in Cook Inlet,” U.S. Senator Mark Begich said in a statement. (Additional reporting by Bill Rigby; editing by Carol Bishopric)

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