By the Journal of Commerce

The Minerals Management Service will hold a lease sale of 9.4 million acres in Alaska's Beaufort Sea on March 30, the latest in the federal agency's periodic offering of offshore tracts beyond the state of Alaska's three-mile territorial limit.

Areas off Barrow and Kaktovik that are used for subsistence whaling are excluded from the sale.

"The Beaufort Sea remains the best near-term potential for offshore petroleum reserves on the Alaska Outer Continental Shelf that can be vital to our nation's economy," said Johnnie Burton, director of the MMS, in a press release.

The lease sale stipulations include possible requirements to conduct biological surveys and bowhead-whale monitoring programs.

Industry interest in the Beaufort Sea has been lukewarm, although several companies have acquired tracts nearer shore, in shallow waters. In deeper waters farther offshore, drilling and production operations are challenged by heavy moving pack-ice in the winter.

Discoveries have been made, however. Unocal Corp. made an oil discovery at Hammerhead, a location in the eastern Alaska Beaufort Sea. ARCO Alaska Inc. made another discovery at Kuvlum, also in the eastern Alaska Beaufort.

Both discoveries are still considered uneconomic given their distance from shore, and the leases have been returned to the government.

Closer to shore, discoveries on OCS submerged lands have been made at Liberty, a prospect BP Exploration Alaska Inc. is considering for development, and Tern, a smaller oil accumulation discovered several years ago by Shell Western E&P.

NorthStar, a producing field operated by BP, straddles the boundary between state-owned and federal OCS acreage. Royalities from North Star production are split between the state and federal governments.