Alaska, the second-largest oil producer among U.S. states in 2010 behind Texas according to the U.S. Energy Information Administration, is planning a lease sale for October that may exceed the size of any other U.S. lease sale in 2011 as the state looks to bolster oil production amid declining output at maturing fields.
The state of Alaska plans to sell oil and gas leases for 14.7 million acres in the Beaufort Sea, on the North Slope and in the North Slope foothills, according to Bloomberg News. Alaska wants to increase output to secure the future of the Trans Alaska Pipeline, which may only have a decade of service left if the state's production continues to slump at the current rate, Reuters reported on Wednesday.
The U.S. Energy Department says Alaska's oil production has been in decline every year since 2002, but producers still see value in the state. Last week, Apache (APA), the largest U.S. independent oil and natural gas company, was the most active buyer at an Alaskan lease sale.
On Wednesday, Royal Dutch Shell (RDS-A), Europe's largest oil company, reiterated its commitment to commencing drilling in Beaufort and Chukchi Seas in Alaska's Arctic coast. The state's outer continental shelf may hold up to 30 billion barrels of recoverable oil reserves, according to some estimates.