Oil and gas companies snap up North Slope leases on state and federal lands

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Ted Murphy, associate state director of the Bureau of Land Management in Alaska, reads off winning bids for the 2016 oil and gas lease sale for the National Petroleum Reserve-Alaska. (Photo by Elizabeth Harball/Alaska’s Energy Desk)

State and federal oil and gas lease sales held Wednesday in Anchorage saw an unexpected surge of interest in the North Slope.

“The bids started to come in and they kept running down to my office going, ‘you’re not believing this,'” said Ted Murphy, associate state director of the Bureau of Land Management in Alaska. “We were surprised.”

The high bids in today’s federal oil and gas lease sale totaled $18.8 million. That’s a huge increase from last year’s total of about $790,000.

The sale was for land in the National Petroleum Reserve-Alaska, where ConocoPhillips recently began developing the first two projects on the 24-million-acre chunk of federal land. Today, ConocoPhillips snapped up the lion’s share of federal leases. But unlike last year, the company had some competition. It had to outbid a few smaller players like Colorado-based Armstrong Oil and Gas. Armstrong Oil and Gas is also pursuing development of what could be a major oil field on the North Slope with its partner Repsol, a Spanish company. Armstrong and ConocoPhillips also placed successful bids for state land on the North Slope. The Houston-based company Burgundy Xploration, LLC also bought up a significant number of state tracts.

According to officials, this year’s state lease sale is one of the most significant Alaska has seen in nearly two decades. The division saw 402 bids for tracts on the North Slope, and winning bids totaled nearly $17 million. Including lease sales in the Beaufort Sea area, the state took in nearly $17.8 million. Last year, the state took in $9.5 million. The state said it was the second largest sale by acreage since 1998.

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Protesters with the Center for Biological Diversity in front of BLM offices in downtown Anchorage. (Photo by Elizabeth Harball/Alaska’s Energy Desk)

State Natural Resources Commissioner Andy Mack said he is very pleased with the results.

“Very exciting stuff and it seems to be continuing the intense interest in that region,” said Mack.

Governor Bill Walker also praised this year’s lease sale, calling it “great news for the state and the industry.”

But several environmental groups objected to today’s lease sales. Nicole Whittington-Evans of the Wilderness Society says she’s worried about how oil development on BLM land could affect one North Slope community in particular.

“The leases that were sold today are further surrounding the community of Nuiqsut in important subsistence use areas,” said Whittington-Evans.

Another group, the Center for Biological Diversity, gathered outside BLM’s offices to protest the federal lease sale, saying it was inconsistent with the Obama administration’s goal to curb climate change.

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