Hilcorp sole bidder in Cook Inlet lease sale

Hilcorp Alaska was the only company taking part in the Cook Inlet Lease Sale 244 – the first lease sale held in Alaska’s federal waters since 2008.

The sale on Wednesday garnered $3,034,815 in high bids for 14 tracts covering roughly 76,615 acres in Cook Inlet, off Southcentral Alaska. All bids were submitted by Hilcorp Alaska.

Cook Inlet Lease Sale 244 is the final to be held under the 2012-2017 Outer Continental Shelf (OCS) Oil and Gas Leasing Program (Five-Year Program). It offered 1.09 million acres in Cook Inlet, comprising 224 blocks stretching roughly from Kalgin Island in the north to Augustine Island in the south.

“This sale represents an important step forward for energy development in Alaska,” said Dr. Walter Cruickshank, Bureau of Ocean Energy Management’s (BOEM’s) acting director. “It demonstrates our commitment to environmentally responsible energy development that provides economic opportunities and generates jobs. Expanded oil and gas production is critical to America’s economic and energy security, as we move to strengthen the Nation’s energy independence in accordance with the administration’s goals.”

Prior to today’s sale, twelve lease sales were held under the 2012-2017 Five Year Program, which offered about 73 million acres for development and generated about $3.275 billion in bid revenues.

The 2017-2022 Program is set to begin this summer and will be in effect until BOEM completes a new National OCS Oil and Gas Leasing Program.

Following the Cook Inlet sale, each bid will go through a 90-day evaluation process before a lease is awarded.

Conservation group slams Hilcorp’s safety record

The Center for Biological Diversity, a conservation group, has criticized Hilcorp’s participation in the lease sale, pointing to the fact that the company’s existing  Cook Inlet offshore drilling infrastructure “was plagued by an oil spill and gas pipeline leak earlier this year.”

“After Hilcorp’s struggle with oil and gas leaks into Cook Inlet this year, it’s disturbing to see the company given more chances to drill and spill in this fragile place,” said Center for Biological Diversity attorney Kristen Monsell. “Allowing this company to expand could have devastating effects on Cook Inlet beluga whales and their prey.”

The center has further highlighted the Alaska Oil and Gas Conservation Commission’s list showing Hilcorp’s for violation of safety regulations for its oil and gas operations in the state. In March 2017, the center said, the commission fined Hilcorp $200,000 for failing to maintain a safe work environment in accordance with good oilfield engineering practices, among other issues.

“Hilcorp’s disdain for regulations and history of spills could spell disaster for Cook Inlet and the Arctic,” Monsell said. “The Trump administration is setting the table for more accidents in these treacherous waters. We’ll be fighting to make sure Cook Inlet beluga whales and other Alaskan wildlife are protected from dangerous offshore drilling.”

Offshore Energy Today Staff