The director of the Alaska Department of Natural Resources (ADNR) Division of Oil and Gas has made a final finding that holding annual Beaufort Sea areawide oil and gas lease sales from 2009 to 2018 is in the best interest of the state. ADNR has proposed to offer for lease all available state-owned acreage in Beaufort Sea Areawide oil and gas lease sales over the 10-year period.

The lease sale area contains approximately two million acres in 573 tracts ranging in size from 640 to 5,760 acres within the North Slope Borough and consists of state-owned tide and submerged land in the Beaufort Sea between the Canadian border and Point Barrow, AK. The area is adjacent to both the National Petroleum Reserve-Alaska (NPR-A) and the Arctic National Wildlife Refuge (ANWR). The southern fringe of the lease sale area includes some state-owned uplands lying between the NPR-A and ANWR.

While the area “has all the geologic conditions favorable for a recoverable accumulation of hydrocarbons,” ADNR said it expects current market conditions to make remaining undiscovered reservoirs “noneconomic to marginally economic.”

The complete final finding is available at www.dog.dnr.alaska.gov/oil.

The Beaufort Sea is estimated to contain 8.22 billion bbl of oil and 27.64 Tcf of natural gas (undiscovered technically recoverable mean estimate).

Since the first North Slope lease sale in 1964, Alaska has held 56 oil and gas lease sales involving North Slope and Beaufort Sea acreage. More than 11.5 million acres in 3,065 tracts have been leased. Of the leased tracts, 407 (about 13%) were drilled and only 292 tracts, or about 10% of those leased, have been commercially developed, according to ADNR.

Last month the Department of Interior’s Minerals Management Service (MMS) approved, with conditions, Shell Offshore Inc.’s plan to explore two leases in the Beaufort Sea (see Daily GPI, Oct. 20). The two leases were obtained by Shell during Beaufort Sea oil and gas lease sales 195 and 202 in 2005 and 2007, respectively (see Daily GPI, Sept. 3). The sales were included in the 2002-2007 five-year oil and gas leasing program and are not affected by a recent court decision on the current leasing program which sent the 2007-2012 program back to MMS for additional analysis under Section 18 of the Outer Continental Shelf Lands Act (see Daily GPI, April 20).

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