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As BP leaves Alaska, first ANWR lease sale could soon begin

(WNDU)
Published: Aug. 29, 2019 at 7:37 PM AKDT
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As BP prepares to leave Alaska, the first of two planned lease sales for oil development in the Arctic National Wildlife Refuge’s Coastal Plain could soon begin.

“I’m not sure that BP leaving is an indication of a broader lack of interest,” said Alaska Republican Sen. Dan Sullivan on Thursday. “We’re going to work hard to try to make sure that it’s going to be a successful lease sale, it’s going to be very important for our state and for our country.”

Under a law passed by the U.S. Congress in 2017 that would open parts of ANWR to development, the first lease sale has to take place before the end of 2021.

A final environmental impact statement (EIS) will need to be released before that sale takes place. According to the Bureau of Land Management officials, that final EIS will be ready in several weeks.

Barring

that could delay the process, the U.S. Department of the Interior has expressed a desire to hold that first sale before the end of the year.

Whether a company will participate or not in a competitive bidding process for oil leases is a closely guarded secret.

“I have no idea who is going to be part of that lease sale,” said Kara Moriarty, the CEO and President of the Alaska Oil and Gas Association, on Wednesday. “We won’t know who’s interested in the Coastal Plain until the lease sale is held.”

Representatives from ExxonMobil and Hilcorp did not respond to a request for comment about whether they will make bids.

“We would consider ANWR leasing against other exploration opportunities in our portfolio, just as we do with exploration opportunities worldwide,” read an emailed statement from Natalie Lowman, a spokesperson for ConocoPhillips.

Sullivan says he has been personally pitching to companies, inviting them to Alaska and describing the regulatory and tax structure that’s currently in place.

“They never tell you if they’re coming or not,” he said wryly. “It’s part of the strategy, a very close hold. I made my pitch, and we’ll see.”

Long-time industry analyst Larry Persily said it was “all speculation” to ask whether BP Alaska leaving the state would have an impact on the sale process. He said it would likely take a group of companies working together to develop the Coastal Plain as the price tag would be in the billions of dollars.

Some opponents of drilling in ANWR have latched onto BP selling its Alaska assets as evidence of a lack of commercial interest in the area.

“If BP thought it could have squeezed a nickel out of drilling in the Arctic Refuge, it wouldn’t have hesitated to annihilate it,” read a Tweet posted by Sen. Ed Markey, D-Massachusetts, on Tuesday. “Their exit is further evidence that there is absolutely no reason to turn the Refuge over to the oil and gas industry. All risk, no reward.”

For Hilcorp, the company could soon have more knowledge about ANWR’s potential than most. BP Alaska will sell all its data and exploration leases in ANWR to the relative newcomer to the North Slope.

Among that data are the findings from the only exploratory well ever dug in the region in 1986.

reported earlier in the year that the findings from the well may have been disappointing.

Sullivan read that story but suggested that some in the national news have had an agenda to discredit development in ANWR. “It’s an area most geologists believe is one of the most potentially prolific spots for large-scale oil and gas literally anywhere in the world,” he said.

However, companies won’t have new seismic data for the Coastal Plan after the Interior Department shelved plans to gather more this past winter.

If the first lease sale is disappointing, a second one is legally required before 2025. “The next one will likely have seismic data which could make it very successful,” Sullivan said.

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