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.