Lloyds List: Shell leads a subdued take-up for Beaufort Sea blocks

ALASKA’s latest Beaufort Sea exploration licensing round attracted attention from oil majors, but only a fraction of the blocks available were taken up, writes Martyn Wingrove.

Oil majors Shell and Total were by far the most active players in lease sale 202, which attracted $42.3m in high bids for the federal government’s Minerals Management Service.

Of the 1,654 blocks offered in the lease sale, only 92 were selected by oil companies worthy of bids.

Around 502m acres of the Beaufort Sea off Alaska’s northern coast have moved into the hands of the oil companies.

‘We are pleased with the sale results. The oil and gas resources present in the Beaufort Sea are vital to the Alaskan economy and we hope this will boost future supplies into the Trans-Alaska pipeline,’ said MMS regional director John Goll.

Shell was the most active in lease sale 202, applying for 49 blocks with combined high bids of $39.25m, and France’s Total offered high bids of $2.2m for 32 tracts.

Italian firm Eni went for seven blocks with high bids of $466,000, while BP and ConocoPhillips took one block each and independent player Keith Forsgren collected two.

Shell may see real potential for hydrocarbons in the Flaxman Island area in the Beaufort Sea, 50 km east of Prudhoe Bay and the entrance to the Trans-Alaska pipeline, as it put in the top 10 high bids for blocks in that area.

The Anglo-Dutch major is planning a heavy exploration campaign in the region over the next three years.

It has booked its own Kulluk submersible drilling platform and Frontier’s ice-class drillship Discoverer for drilling in the summer months this year, 2008 and 2009.

This year the London-listed firm plans to drill four wells in the Sivulliq area and then it intends to drill in other continental shelf areas, including off Flaxman Island, in 2008 and 2009.

Ice-class offshore support vessels will assist in these operations.

Marine surveys on each drill site and oil spill response preparations will be undertaken before the drilling begins.

Total said it was awarded 32 offshore exploration blocks covering 750 sq km.

These are around 40 km offshore in water depths to 35 m.

The Paris-based firm is planning to shoot seismic surveys over the blocks to identify drilling locations.

Published: Apr 24, 2007

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