ANCHORAGE, Alaska - Five companies bid $30.9 million Wednesday for rights to search for oil and gas in the National Petroleum Reserve of Alaska, a vast but lightly explored federal land holding on Alaska's North Slope.
The lease sale is the fifth held in the region by the U.S. Bureau of Land Management over the past decade. The 1999 lease sale, the first in the series, drew $104.6 million in high bids; subsequent lease sales drew between $63.8 million and $13.7 million in high bids.
Four of the companies that were successful bidders Wednesday --- ConocoPhillips (COP.N: Quote, Profile, Research, Stock Buzz), Anadarko (APC.N: Quote, Profile, Research, Stock Buzz), Petro-Canada PCA.T and Talisman Energy's TLM.T Alaska unit FEX LLP --- already hold leases in the petroleum reserve and have been exploring there.
Also entering the basin with heavy bidding in the lease sale was Dallas-based Petro-Hunt LLC. The company was the apparent winner of more than a third of the 150 tracts that received bids.
Tom Lonnie, Alaska state director of the BLM, said he was pleased with the results of the lease sale, which offered about 4.8 million acres of land that had been previously available.
"I think it was quite successful," he told reporters after the bids were unsealed.
Although the petroleum reserve was established in 1923 by President Warren Harding as a source of energy for the military, there has never been any commercial oil or gas production there.
The first oil production is likely to come in about 2012, when ConocoPhillips and partner Anadarko start operating their Mooses Tooth field on the far northeastern corner of the reserve, Lonnie said.
Development of the reserve has been challenging as the area is remote from existing oil-field infrastructure, which lies to the east on state land, he said.
The petroleum reserve, about the size of Indiana, is believed to hold 9.3 billion barrels of recoverable oil and 59.7 trillion cubic feet of recoverable natural gas, according to a 2002 U.S. Geological Survey estimate.
But Lonnie said it is likely that the oil and gas is scattered in small to moderate accumulations that will require a gradual westward expansion of infrastructure. "There's not one giant field, an elephant resource, that's going to bring everything into the area," he said
Many of the big-money bids unsealed Wednesday were for a region north of the Colville River and near the Brooks Range foothills, an area considered more likely a source of natural gas than oil.
For ConocoPhillips, the lease sale was an opportunity to pick up extra acreage around the company's Mooses Tooth unit, a company official said. The company won 33 of the tracts on which it had bid, said David Brown, land manager for ConocoPhillips Alaska Inc.
"We're looking for oil on most of them," Brown said. ConocoPhillips also bid on gas-prone sections in the southern part of the lease sale area that might be valuable if a massive natural gas pipeline is built, he said. "We're kind of speculating for the future with the gas pipeline coming down," he said.
The lease sale excluded certain ecologically sensitive wetlands near vast Teshekpuk Lake in the northeast section, pleasing environmentalists and the region's Inupiat Eskimo residents.
The lease sale is the fifth held in the region by the U.S. Bureau of Land Management over the past decade. The 1999 lease sale, the first in the series, drew $104.6 million in high bids; subsequent lease sales drew between $63.8 million and $13.7 million in high bids.
Four of the companies that were successful bidders Wednesday --- ConocoPhillips (COP.N: Quote, Profile, Research, Stock Buzz), Anadarko (APC.N: Quote, Profile, Research, Stock Buzz), Petro-Canada PCA.T and Talisman Energy's TLM.T Alaska unit FEX LLP --- already hold leases in the petroleum reserve and have been exploring there.
Also entering the basin with heavy bidding in the lease sale was Dallas-based Petro-Hunt LLC. The company was the apparent winner of more than a third of the 150 tracts that received bids.
Tom Lonnie, Alaska state director of the BLM, said he was pleased with the results of the lease sale, which offered about 4.8 million acres of land that had been previously available.
"I think it was quite successful," he told reporters after the bids were unsealed.
Although the petroleum reserve was established in 1923 by President Warren Harding as a source of energy for the military, there has never been any commercial oil or gas production there.
The first oil production is likely to come in about 2012, when ConocoPhillips and partner Anadarko start operating their Mooses Tooth field on the far northeastern corner of the reserve, Lonnie said.
Development of the reserve has been challenging as the area is remote from existing oil-field infrastructure, which lies to the east on state land, he said.
The petroleum reserve, about the size of Indiana, is believed to hold 9.3 billion barrels of recoverable oil and 59.7 trillion cubic feet of recoverable natural gas, according to a 2002 U.S. Geological Survey estimate.
But Lonnie said it is likely that the oil and gas is scattered in small to moderate accumulations that will require a gradual westward expansion of infrastructure. "There's not one giant field, an elephant resource, that's going to bring everything into the area," he said
Many of the big-money bids unsealed Wednesday were for a region north of the Colville River and near the Brooks Range foothills, an area considered more likely a source of natural gas than oil.
For ConocoPhillips, the lease sale was an opportunity to pick up extra acreage around the company's Mooses Tooth unit, a company official said. The company won 33 of the tracts on which it had bid, said David Brown, land manager for ConocoPhillips Alaska Inc.
"We're looking for oil on most of them," Brown said. ConocoPhillips also bid on gas-prone sections in the southern part of the lease sale area that might be valuable if a massive natural gas pipeline is built, he said. "We're kind of speculating for the future with the gas pipeline coming down," he said.
The lease sale excluded certain ecologically sensitive wetlands near vast Teshekpuk Lake in the northeast section, pleasing environmentalists and the region's Inupiat Eskimo residents.
