Four Companies Bid $14M for Alaska Oil, Gas Lease Tracts

WASHINGTON Sep 28, 2006 (Dow Jones Newswires)

Four companies bid $13.8 million for the rights to develop 81 oil and gas blocks on 940,000 acres of the National Petroleum Reserve-Alaska, the U.S. Bureau of Land Management said Wednesday.

The BLM said it has 90 days to evaluate the bids offered by Anadarko Petroleum Corporation (APC), ConocoPhillips (COP), FEX LP, and Petro-Canada (PCZ).

The BLM originally intended to also offer nearly 400,000 acres around Lake Teshekpuk in the reserve, but a lawsuit and subsequent court ruling found the agency had violated environmental laws by not adequately conducting impact assessments.

The BLM said the largest bid of $2.28 million was offered by FEX LP and Petro-Canada for tract 272, and the two companies jointly bid more than $10.3 million - the highest total amount - to acquire 48 tracts. Anadarko Petroleum had 25 successful bids and ConocoPhillips had eight successful bids, the agency said.

According to government estimates, the 23-million acre NPRA contains between 5.9 billion and 13.2 billion barrels of recoverable oil and 39 trillion to 83 trillion cubic feet of natural gas.

The new oil and gas auction comes at a time when federal regulators and Congress are investigating both insufficient government pipeline regulations and shortfalls in BP PLC's (BP) maintenance of its Alaskan Prudhoe Bay pipeline system. Oil leaks caused by systematic corrosion discovered there earlier this month forced the partial shutdown of production from the largest producing oil field in the U.S.

Part of the lease covers new acreage in and around the Prudhoe Bay area, located in the North Slope, the heart of Alaska's oil industry.

The lease also follows calls to increase domestic production in order to reduce reliance on international supply from politically unstable areas such as the Middle East.

Copyright (c) 2006 Dow Jones & Company, Inc.

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