Shell, Conoco Bid to Drill in Chukchi Sea

Royal Dutch Shell led a handful of petroleum companies in bidding Wednesday for leases in the Chukchi Sea off Alaska’s northwest shore, AP reported.

The sale went forward over the protest of conservation and Native Alaska groups, plus objections by Congressional members outside the state, who said the federal agency, the Minerals Management Service, should have delayed the sale until a decision was made on protections for polar bears.

Shell’s vice president for exploration for the Americas, Annell Bay, said the lease sale was an opportunity to move into an undeveloped region that could help meet an increasing demand for energy. “There’s not many areas like this in the United States,” Ms. Bay said.

Seven companies offered bids totaling nearly $3.4 billion. High bids added up to nearly $2.7 billion on 2.76 million acres The federal agency estimates the area contains 15 billion barrels of conventionally recoverable oil and 77 trillion cubic feet of conventionally recoverable natural gas.

A second company, ConocoPhillips, submitted 98 high bids adding up to $506 million and competed with Shell for dozens of others. ConocoPhillips was unsuccessful on 47 tracts for which it bid $593.6 million. Shell was unsuccessful on 27 tracts for which it had bid another $82 million.

Other bidders included Repsol E&P USA, with 93 high bids that added up to $14.4 million; Eni Petroleum US, with 17 bids for $8.9 million; and Statoil Hydro USA E&P, with 16 for $14.4 million.

The federal agency will take about 90 days to review bids. It can reject bids that do not meet fair market value.