ConocoPhillips only successful bidder at federal lease sale
In contrast to a state areawide lease sale held the same day, bidding was very light at a federal U.S. Bureau of Land Management sale in the National Petroleum Reserve-Alaska Nov. 18.
NPR-A is the large federal reserve west of state lands on the North Slope,.
Only six bids were submitted for six tracts, all by ConocoPhillips. The acreage bid on was adjacent to leases already held by ConocoPhillips and Anadarko Petroleum, a minority partner.
In total, BLM netted $788,680 in total high bids in the sale, half of which will be shared with the state of Alaska under terms of a 1975 federal law.
ConocoPhillips’ high bid per acre was $31.91, and the highest bid for a lease was $199,760, BLM officials said. The federal sale was area-wide, like the state sale, meaning that all unleased tracts in the area open for bidding were offered.
Most of the area open to bids in the sale was of moderate potential for oil and gas discoveries. Lands with higher potential to the north of the lands offered, and nearer the coast, were off-limits to bidding because of the environmental sensitivities of the area, which is a waterfowl breeding area during summer.
ConocoPhillips also announced Nov. 18 it would proceed with development of its Greater Moose’s Tooth, or GMT-1 project, in the area near the new leases acquired. The company is also working on a prospective GMT-2 a few miles further into NPR-A from GMT-1.
The 23-million-acre NPR-A was created in 1923 by President Warren Harding as a petroleum reserve for the U.S. Navy, although it had no known oil deposits at the time. Designated as Naval Petroleum Reserve No. 4, the region has had several phases of exploration beginning with a Navy-led effort in years following World War II that was followed by a program managed by the U.S. Geological Service.
In 1975 the reserve was transferred from the Navy to the U.S. Interior Department and re-designated the National Petroleum Reserve-Alaska.
In the 1980s, parts of NPR-A were opened to leasing by private companies and several exploration wells were drilled over the following years.
Modest oil and gas discoveries were made in the government-led exploration including a small oil field at Umiat, in the reserve’s southeast, and a gas field at Barrow, which now supplies gas to the community.
Federal government geologists now believe the NPR-A has only modest potential for oil discoveries but more substantial prospects for natural gas.
Tim Bradner can be reached at [email protected].