Day: March 30, 2026

By: Max Graham, Northern Journal

Global energy leaders have convened here this week, spiffed up in dark suits and polished shoes, to discuss the industry’s most pressing issues: war in the Middle East, Venezuela, artificial intelligence.

But behind the scenes at this annual conference of industry executives — known formally as CERAWeek by S&P Global but nicknamed the “Super Bowl of energy” — a big story about Alaska oil is unfolding.

It involves a massive lease sale in the Arctic, a remarkable show of interest from global oil giants that had faded from Alaska’s frontlines and an emerging race to find deposits potentially worth billions of dollars. Industry proponents say a flood of crude from the largely undeveloped western Arctic, if companies can locate and produce it, could open a new era for the state’s industry.

In what was by far the highest-value federal lease sale in the vast National Petroleum Reserve–Alaska in more than two decades, oil companies last week snatched up more than 1 million acres across the western Arctic.

The scale of interest, with 11 companies participating and a record $163 million spent on bids, was itself notable. But so were the identities of some of the bidders. Two, in particular, surprised even industry insiders: ExxonMobil and Shell.

Both supermajors have a history in Alaska.

ExxonMobil still owns shares of existing Arctic oil fields and the trans-Alaska pipeline. But Shell no longer operates in the state and hasn’t drilled a well in Alaska since its failed offshore exploration campaign more than a decade ago. And ExxonMobil hadn’t bid on leases in years.

Their renewed interest — along with continued investment from established players like ConocoPhillips and Colorado-based wildcatter Bill Armstrong — accelerates an industry revival that was already playing out on the North Slope.

Just a few years ago, new production and investment in the region lagged as some companies struggled to raise money and even pulled out of Alaska amid successful advocacy campaigns against Arctic drilling.

But major geologic discoveries by Armstrong — and a pair of big new oil fields now under construction — have made the North Slope a more attractive investment. And the industry also has political tailwinds coming from a Trump administration keen to boost resource extraction in Alaska.

“This sale absolutely shows the world the potential for Alaska,” Armstrong, one of the primary bidders, said in an interview at CERAWeek. “This could be a game-changer for the state.”

The region still faces obstacles to development, like high costs and competition from other basins where drilling is cheaper.

And the lease sale is just a preliminary step, far from an assurance of future production: No new wells have been drilled yet, and companies often spend years doing exploratory work before deciding whether to start pumping oil.

Conservation groups, meanwhile, continue to fight the industry’s expansion in the reserve — where, they note, federal law instructs policymakers to not only to oversee oil development but also to protect the environment and cultural values. Multiplelawsuits are challenging the Trump administration’s oil-friendly policies in the Arctic, and advocates have asked a judge to invalidate leases set to be awarded after last week’s sale.

“What we saw last week were companies pushing into some of the most sensitive areas of the reserve,” said Suzanne Bostrom, an attorney with a conservation-focused Anchorage law firm, Trustees for Alaska, that represents some of the organizations suing the administration. “We and the groups that we work with are going to continue to fight for this area, and fight for the protections that it deserves,” Bostrom added.

But even amid the pending legal questions, the sale’s results are still a step toward new development; further investment and competition in the petroleum reserve are likely to follow, conference participants told Northern Journal in Houston this week.

A surprising sale

Leading up to the sale, there were signs that oil companies could show up in force.

It was the first auction in NPR-A in seven years, and more acreage was up for grabs than in many previous sales. The offerings included large swaths of tundra and wetlands that Democratic administrations had designated off-limits to drilling.

And after years of comparatively tepid industry interest, recent oil discoveries have expanded the known resources on the North Slope, said Bob Fryklund, a top oil and gas analyst at S&P Global Energy, a research firm.

“It’s kind of been a sleeper basin,” he said.

A decade ago, the petroleum reserve was beyond the western edge of the North Slope’s oil infrastructure, making it more expensive to bring in equipment and drill.

But the industry has been moving in its direction: Construction is now underway at two big new oil fields in the area — ConocoPhillips’ Willow project and Santos’ Pikka project. Both will tap into a long-overlooked oil-rich geologic formation, known as the Nanushuk, that Armstrong initially discovered near the reserve’s eastern boundary.

It was no surprise, then, that ConocoPhillips, Santos and Armstrong all showed up at the recent auction, analysts said.

Few people, however, predicted that so many other companies would put in bids, or that major corporations like ExxonMobil and Shell would participate.

ExxonMobil, committing more than $7 million on some 138,000 acres, came as a particularly big surprise.

That company, headquartered in Houston, owns shares in the existing Point Thomson and Prudhoe Bay oil fields on the North Slope. But it doesn’t manage either field, and the company has not been active in exploration and new development in the state: Until last week, ExxonMobil had not bid on a federal or state oil and gas lease in Alaska in more than a decade, according to data provided by Welligence, an industry research firm.

Meanwhile, Shell, in a partnership with a Spanish company, Repsol, submitted some of the highest bids. The two companies offered more than $2 million on many individual tracts, and committed more than $90 million in total.

Experts said the return of those players was likely influenced by the ongoing development in the area.

Although neither the Willow nor Pikka project is producing yet, the multibillion-dollar investments by ConocoPhillips and Santos may have given other companies more faith in the surrounding geology and the ability to pump oil in the area, analysts said.

“What you saw Shell do, and even Exxon, was validation of the work done by other players on the North Slope in recent years,” an oil company executive said in Houston, speaking on the condition of anonymity because he was not authorized to speak publicly.

Industry headwinds subside

Shell’s interest represents a reversal from its announcement a decade ago that it was pulling out of Alaska. The company had spent some $7 billion on its failed effort to drill for oil offshore in the Chukchi Sea, citing Obama administration policies and high costs when it departed the state.

In 2020, another major, BP, also pulled out of Alaska, selling its assets to Hilcorp, a privately owned Texas business.

Those decisions both seemed like signals of the industry’s decline in the state, as the daily flow through the trans-Alaska pipeline shrank to 500,000 barrels from a high of 2 million decades earlier. An era of oil giants spending freely on big new projects was giving way to one of smaller companies wringing the last drops of crude out of aging fields.

At the time, companies were contending not only with the usual impediments to drilling in Alaska, like high costs and opposition from environmental groups, but also with growing political pressure from climate-minded shareholders and activists opposed to expanding fossil fuel production. Even oil executives acknowledged that advocacy against the oil industry, which is a major driver of climate change, was deterring investment in Alaska.

But even as the burning of fossil fuels continues to warm the planet, global demand for oil remains high — and industry confidence in the North Slope’s potential appears only to be growing.

The newly discovered oil deposits there “have proven that Alaska is not over,” Fryklund said.

ConocoPhillips, ExxonMobil and Santos declined to make officials available for on-record interviews. Shell did not respond to a request for comment.

“This marks an important step in our continued commitment to responsible energy development in Alaska and the U.S.,” an Exxon spokesperson said in an emailed statement.

Once the company’s leases are finalized, ExxonMobil will work with the state and local communities as it evaluates “potential next steps for the area,” the statement said.

“I wish I were 30 years younger” 

For those who work in the oil industry, the central plank of Alaska’s economy, the sale stirred excitement, and some relief: New activity in the federal reserve could bring more gigs for contractors that have long wondered if there would be enough development on the North Slope to sustain their businesses.

“We’ve all had this little worry of, ‘Well, what’s next?’” said Greg Miller, vice president of operations at Cruz Construction, a Palmer-based company with oil-related contracts on the Slope. “Now, there’s a little bit of reason to be a little bit more hopeful and positive about the next 10, 20 years.”

The sale won’t lead to immediate growth for Miller’s business, he said. But new exploration activity, if and when it happens, will create jobs: A single project can provide a year’s worth of wages for as many as 100 employees at Cruz, Miller added.

For the president of another Alaska oil services company, Kevin Durling, the hype around the petroleum reserve is reminiscent of the boom days when oil started flowing through the trans-Alaska pipeline, in the 1970s and 1980s.

“I wish I was 30 years younger,” he said.

The state’s conservation community, meanwhile, has reacted with disappointment, and concern for the western Arctic ecosystem.

The vast, largely undeveloped region contains important habitat for migratory birds, and it sustains tens of thousands of caribou, some of which calve around Teshekpuk Lake, a major water body in the northern part of the petroleum reserve.

“I’ve had better weeks at work. No question about that,” said Andy Moderow, senior policy director at Alaska Wilderness League, one of the environmental groups suing the Trump administration. But, he added: “The war is still well in front of us.”

One potential hurdle for development is a legally disputed conservation area around Teshekpuk Lake. The protections, across about 1 million acres, were set aside by the Biden administration for the nearby Iñupiaq village of Nuiqsut, where many people still depend on caribou and other wildlife for food.

The Trump administration canceled the protections late last year, touting the area’s oil and gas potential and aiming to authorize leasing there. Nuiqsut’s leaders then sued, saying the move violated a prior agreement and threatened the village’s subsistence traditions.

Two days before the lease sale results were announced, a federal judge restored the Teshekpuk protections while the lawsuit played out.

But the area still attracted bids from a few companies — including ExxonMobil.

The administration has not said whether it plans to award leases in the disputed area to high bidders — or how, exactly, it intends to navigate the apparent conflict between the sale results and the court ruling.

Nathaniel Herz contributed reporting from Anchorage.

Northern Journal contributor Max Graham can be reached at max@northernjournal.com. He’s interested in any and all mining related stories, as well as introductory meetings with people in and around the industry.

This article was originally published in Northern Journal, a newsletter from Nathaniel Herz. Subscribe at this link.