Alaska Nets $28 Million from Oil and Gas Lease Sale

Published December 26, 2018

Alaska earned more than $28 million from oil and gas lease sales on state property in the North Slope and the Beaufort Sea in 2018.

Six groups submitted high bids totaling $27.3 million for 133 lease tracks consisting of 223,680 acres in the North Slope land auction. The North Slope is located between the National Petroleum Reserve–Alaska and the Arctic National Wildlife Refuge (ANWR).

Leasing 120 tracts in the North Slope, Lagniappe Alaska LLC purchased the largest number of tracts, including a large area of land west of ANWR.

Additionally, three other groups spent $848,000 to lease eight tracts consisting of 20,270 acres in Alaska’s Beaufort Sea, during the state’s auction in mid-November.

Alaska’s 2018 lease sale topped last year’s auction, which earned the state $21.2 million: $19.9 million for leases on the North Slope and $1.3 million for Beaufort Sea leases.

The lease sales show Alaska welcomes the energy industry, says outgoing Gov. Bill Walker, who scheduled the lease sales in December 2017.

“[A]s we have always said, Alaska is open for business,” Walker said in a press statement. “And this successful lease sale, following a banner year in 2017, is a perfect example of that.”

Oil Exploration Increasing

Opening new areas for oil and gas exploration is good for Alaskans, says Larry Barsukoff, director of operations at the Alaska Policy Forum.

“Alaska’s economy is primarily driven by resource extraction, including oil, mining, and fishing, so there’s definitely importance to opening new tracts to the market,” said Barsukoff. “ConocoPhillips has taken the lead. A couple of smaller companies have also been working there, with four, maybe half a dozen companies spending money on exploration.

“I think ConocoPhillips invested $1 billion in exploration activity last winter, and has committed to a similar amount this year,” Barsukoff said. “Their initial oil finds were made public, and they were pretty excited about it, with one of those leases already producing oil that is going into the Trans-Alaska Pipeline System.”

Barsukoff says despite the excitement surrounding the state’s oil and gas sales thus far, ANWR is the real prize.

“Everyone is keeping their eyes on ANWR,” Barsukoff said. “What the lease sales will bring from the federal lands which were opened up there last year is what people are really interested in.”

Kenneth Artz ([email protected]) writes from Dallas, Texas.