1. MMS Offshore Alaska Program
Overview
MMS Offshore Alaska Program
Getting Back to the Resources
AAPL OCS Workshop
The Woodlands, Texas
John Goll
U.S. Minerals Management Service
January 2004

2. Today’s Topics Access Lease Sales Economic Incentives
Beaufort Sea
Cook Inlet
Economic Incentives
North Aleutian Basin
Permitting
Info Sources

3. Alaska OCS Potential (Risked, Undiscovered, Conventionally Recoverable) Low to High Estimates
Oil Gas
billions barrels TCF
Alaska OCS Total
Chukchi
Beaufort
Hope
Norton
Cook Inlet
(MMS 2000 National Assessment)

4. Access: The OCS 5 Year Plan 2002-2007-- Alaska
Traditional Sales
Beaufort Sea
2003, 2005, 2007
Cook Inlet
2004, 2006
Interest Based Sales
(annual calls)
Chukchi Sea/Hope Basin
Up to 2 sales
Norton Basin
1 sale

5. Beaufort Sea Sale 186 September 2003

6. Beaufort Sea Economic Incentives
Royalty Suspension volumes/per lease
Up to 30 or 45 Million barrels, (depending on Zone A or B)
With price floor $18/barrel
With price ceiling ($28/barrel 1994 inflation adjusted)
Royalty rate 12.5%
Primary Term 10 years
Minimum bid $15/$10
Rental rate sliding
$3 – 12.50/acre (Zone A)
$1 – 8/acre (Zone B)

8. Beaufort Sea

9. Request for Information out now – due 1/30
Beaufort Sea Planning Area Oil (billion barrels) Gas (trillion cubic ft)
CRR – 32.1 – 63.3
ECR ($18/bbl; $2.11/mcf) – – 9.7
ECR ($30/bbl; $3.52/mcf) –
Beaufort Sea models assume that oil is transported through TAPS and on to West Coast markets. Natural gas produced with oil would be reinjected for enhanced oil recovery until oil depletion and then produced and transported by a future gas pipeline to outside markets.
Request for Information out now – due 1/30
Next Sale: March 2005

10. Alaska Permitting State//MMS MOU
Recent Beaufort Sea permitting successes

11. Working with the Communities
North Slope Borough
Tribes - Government-to-government
AEWC
Keep communities informed
Visits
Consultation on Projects
Nuiqsut Paisanich:  Nuiqsut Heritage:  A Cultural Plan
In this Place:  A Guide for Those Who Would Work in the Country of the Kaktovikmuit.

12. Cook Inlet Sale 191 November 2003 April 2004 May 19, 2004
Letter to Governor
FEIS
Coastal Zone Consistency Determination
PNOS
Defer 2 areas
April 2004
Final Notice of Sale
May 19, 2004
The Sale

13. Cook Inlet Sale 191 Proposed Economic Incentives
Royalty
12.5% fixed
Royalty Suspension Volume
30 Million BBls Oil Equivalent (includes natural gas)
with floor & ceiling
Minimum Bid
$10/acre (was $25)
Rental Rate
$2/acre (was $5)
Initial Lease Term
8 years (was 5 yrs)

14. Cook Inlet

15. Cook Inlet Planning Area. Oil (billion barrels)
Cook Inlet Planning Area Oil (billion barrels) Gas (trillions cubic ft)
CRR – 1.4 – 2.5
ECR ($18/bbl; $2.11/mcf) – 0.6 – 1.3
ECR ($30/bbl; $3.52/mcf) – 1.0 – 1.7
Cook Inlet models assume oil and gas production is sent to local refineries and markets in Alaska.
Sale 191:
May 19, 2004
2nd Sale:
May 2006

16. The 5 Year Plan – Chukchi Sea/ Hope Basin – Norton Basin
Keeping Options Open
Local Use (?)
Interest approach:
Chukchi/Hope
2 sales
Local use?
Call #2 – early 2004
Norton Basin
gas for locals?
Call #3 – early 2004

17. Chukchi Sea Planning Area. Oil (billion barrels)
Chukchi Sea Planning Area Oil (billion barrels) Gas (trillions cubic feet)
CRR – 60.1 – 154.3
ECR ($18/bbl; $2.11/mcf) not available
ECR ($30/bbl; $3.52/mcf) not available
Chukchi Sea models assume that oil is transported through TAPS and on to West Coast markets. Natural gas was not assessed owing to lack of gas transportation system and availability of known gas reserves close to current facilities at Prudhoe Bay.

18. Hope Basin Planning Area. Oil (billion barrels)
Hope Basin Planning Area Oil (billion barrels) Gas (trillions cubic ft)
CRR – 3.4 – 11.1
ECR ($18/bbl; $2.11/mcf) < – 0.6 – 4.9
ECR ($30/bbl; $3.52/mcf) < – 1.5 – 6.0
Hope Basin models assume a local market exists for natural gas.

19. Norton Basin Planning Area. Oil (billion barrels)
Norton Basin Planning Area Oil (billion barrels) Gas (trillions cubic ft)
CRR < – 2.7 – 8.7
ECR ($18/bbl; $2.11/mcf) <0.1 – – 1.0 – 5.0
ECR ($30/bbl; $3.52/mcf) <0.1 – – 1.6 – 6.4
Norton Basin models assume local consumption of gas and gas-products.

20. North Aleutian Basin Moratoria Gas Prone Oil Presidential
[Congressional]
Gas Prone
7 TCF Mean
17 TCF (5%)
Oil
230 MMB Mean
570 MMB (5%)

21. Lift Moratoria? Before Consideration: Congress State
Lift appropriations ban
State
Request from Governor
Support in the Communities

22. MMS Geological Information
Geological Reports
Beaufort Sea
Chukchi Sea
Norton Basin
Gulf of Alaska
Summary packages
Beaufort Sea
Chukchi
Cook Inlet
Norton Basin

23. MMS Research University of Alaska Technology and Assessment Program
Walrus haulout
Technology and Assessment Program
engineering and oil spill response
Environmental Studies Program
University of Alaska
CMI
Marine Minerals Technology Center
Monitoring

24. DOI/State/UAA Whatever Information you need on resources
Moving to UAA Library this summer

25. Upcoming MMS OCS Sales www.mms.gov/alaska/ 907-271-6010
Cook Inlet 191
May 19, 2004
Beaufort Sea 195
March 2005
Alaska DNR:
BLM Alaska:
MMS