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Alaska oil, gas lease sales draw only one bid (complete article from source)
Source: reuters.com, by Yereth Rosen
March 01, 2007
ANCHORAGE, Alaska (Reuters) - An oil and gas lease sale for state territory on the Alaska Peninsula drew a single bid Wednesday, and a sale offering vast amounts of territory on the North Slope drew no bids at all.
The sole bidder, the apparent winner of exploration rights to a tract of land on the peninsula that juts out from Alaska's southwestern corner, was Hewitt Mineral Corp. of Ardmore, Oklahoma. The company picked up the tract to add to others acquired in a 2005 state lease sale.
The Alaska Peninsula lease sale had offered 5.8 million acres of state territory, mostly onshore. The region has never had any commercial oil or gas production and is unconnected to any existing petroleum development or even the state's road system.
"Only a very large find is going to be developed because it's got to carry the costs of an absolutely frontier development," said Kevin Banks, acting director of the Alaska Division of Oil and Gas.
The North Slope Foothills lease sale had offered 7.6 million acres of state territory south of existing oil infrastructure in and around Prudhoe Bay. A sale in the same area drew $1.27 million in bids nine months ago. But little bidding was expected Wednesday because of the short interval since the previous lease sale, a result of a schedule shuffle within the division, Banks said.
In both the Alaska Peninsula and the North Slope foothills, energy companies that might be interested in exploring for oil and gas are waiting for action from the federal government, Banks said.
Onshore exploration in the Alaska Peninsula would likely heat up if the U.S. Minerals Management Service decides to allow oil and gas leasing in adjacent federal territory offshore, he said.
The MMS has proposed including the North Aleutian Basin, the marine area that includes salmon-rich Bristol Bay, in its upcoming five-year leasing plan.
Bryan Sralla, a geologist with Hewitt mineral, said his company is indeed speculating that offshore development will be authorized by the federal government, making it more economically feasible to develop the onshore tracts it has leased.
"If there were some significant exploration (offshore), it might be good to test and find these structures onshore," he said.
Much of the otherwise prospective land in the North Slope Foothills, meanwhile, remains subject to ownership disputes, Banks said. Claims to the land by the state government and by the Inupiat Eskimo-owned Arctic Regional Native Corp. have yet to be resolved by the federal government.
"The land has cloudy title and for that reason there is a lack of access to what I think should be prospective land," Banks said.
Click here for complete article from reuters.com
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