Millions of acres up on lease sale block

Posted: Wednesday, May 07, 2003

About 4 million acres stretching most of the length of Cook Inlet went on the block Monday in a competitive lease sale state officials hope will generate interest from oil and gas companies.

Bids on the sale, called the Cook Inlet Areawide 2003, will be opened and read publicly beginning at 8:30 a.m. today at the Loussac Public Library in Anchor-age. The Alaska Division of Oil and Gas then will review bids. No bids will be accepted or rejected until that process is completed.

The acreage includes an area lying between Houston and Homer in the north and south, and the Chugach and Kenai mountains in the east and the Aleutian Range in the west. It covers portions of the Kenai Peninsula Borough, the Matanuska-Susitna Borough and the municipality of Anchorage, and includes some 815 tracts ranging in gross area from 640 to 5,760 acres.

The Alaska Division of Oil and Gas said only those lands within the sale area not covered by existing leases as of Feb. 5 would be considered available for leasing. Territory that becomes eligible for leasing after that date will be offered in Cook Inlet Areawide 2004, scheduled for May of next year, the division said.

Certain tracts identified by the National Marine Fisheries Service as important habitat for Cook Inlet's population of beluga whales have been removed from the sale. They include tracts on the Chuitna, Beluga, Ivan, Kenai, Chickaloon, Drift, Big, Kustatan, McArthur, Middle, Susitna and Little Susitna rivers, as well as the Knik Arm, Turnagain Arm and some tracts within Anchorage.

A state superior court ruling stayed leasing in those tracts in the current sale. According to a division press release, those tracts would be included in future Cook Inlet areawide lease sales upon a supplemental finding by the Department of Natural Resources that a plan was in place to address concerns over beluga whale habitat.

All leases will have a fixed state royalty rate of 12.5 percent and an initial primary term of seven years, the state said.

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