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Wednesday, April 18, 2007Breaking News
Shell bids aggressively in federal Beaufort Sea lease sale
By Tim Bradner
Alaska Journal of Commerce
Shell Gulf of Mexico Inc. dominated bidding Wednesday in the federal
Outer Continental Shelf Lease Sale 202 in the Alaska Beaufort Sea,
winning 49 of 92 tracts leased by the U.S. Minerals Management Service
and offering the highest bids of the sale.
There was significant competition in bidding, however, from Total USA
Inc., the U.S. subsidiary of the Paris-based company. Total acquired 32
tracts, most of them adjacent to offshore areas on which Shell offered
the high bids of the sale.
Eni Petroleum Inc., subsidiary of the Italian firm Eni, acquired seven
leases that were in nearshore waters adjacent to where the company is
working on development of a discovery.
Most bids in the sale, including those from Total, were near the
minimum requested by the MMS. Shell bid the highest offers, including
$14.1 million for Tract 6609, $4.2 million for Tract 6460 and $2.1
million for Tract 6406.
Total's bids for leases nearby were for near-minimums, typically $58,102.
John Goll, Alaska region director for the MMS, said high bids in the
sale totaled $42.1 million. There were 95 bids on 92 tracts sold, Goll
said. Three leases brought bids from both Shell and Total.
The most intense bidding came in an area near where Unocal Corp. made
its Hammerhead offshore discovery in the 1980s, and where ARCO Alaska
Inc. made a discovery on the Kuvlum prospect. The location is
approximately 20 miles offshore, north of the large Point Thomson gas
and condensate field, an onshore field.
Neither Hammerhead or Kuvlum were considered economic at the time, and
the leases were eventually relinquished by Unocal and ARCO to the
federal government.
Shell acquired leases in the area in a March 2005 OCS sale and plans exploration drilling this summer.
Total's bids in the sale indicate a renewed interest in Alaska after
the company drilled a costly, but unsuccessful, onshore exploration
well in the National Petroleum Reserve-Alaska several years ago.
Tim Bradner can be reached at tim.bradner@alaskajournal.com.
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