Paltry Bidding for Alaska Oil Lease Sale

Credit: Anton Balazh/AdobeStock
Credit: Anton Balazh/AdobeStock

Alaska oil and gas lease sales offering tracts on the North Slope and Beaufort Sea drew almost no bids, state officials said Wednesday.

Only six bids were submitted for onshore tracts in the central North Slope, and no bids were submitted for tracts in the Beaufort Sea or the Brooks Range foothills, the Alaska Division of Oil and Gas reported.

It was the fewest bids submitted for a North Slope auction since 1999, when the state began its annual leasing program that offers all available state-owned territory in designated basins.

In this sale, about 5 million acres were offered on the central North Slope, the core area for Alaska oil operations. In the sale for the Brooks Range foothills, which are south of the established oil fields, about 4.3 million acres were offered, and the Beaufort Sea sale offered about 1.7 million acres of state offshore state territory.

However, the only bidders were Louisiana-based independent Lagniappe Alaska LLC, which submitted bids for five North Slope tracts, and Savant Alaska LLC, operator of the Badami field on the eastern North Slope, which bid on the sixth tract.

The six bids totaled $467,609.60, the division reported, on 14,080 acres.

In a statement, Tom Stokes, director of the Alaska Division of Oil and Gas, noted that 40% of the state’s North Slope acreage and 45% of its Beaufort Sea acreage is already under lease.

“When you combine that fact with the limited available acreage around known exploration targets throughout the North Slope, and some banks’ current hesitance to lend money for Arctic exploration, it’s understandable that the modest interest in today’s lease sale focused on opportunities close to development infrastructure,” Stokes said in the statement.

The state’s annual North Slope areawide auctions are usually held in November or December and typically result in leases of 50 to 200 tracts. The annual Beaufort Sea and Brooks Range foothills sales have generated much less industry interest and have sometimes received no bids at all, as was the case on Wednesday.

 (Reporting By David Gaffen Editing by Chizu Nomiyama)

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