Author: alaskaadmin

A controversial oil and gas federal lease sale in the National Petroleum Reserve in Alaska generated a new bidding record, according to results released on Wednesday. It was the first auction held in that Arctic Alaska territory since 2019.

The lease sale produced $163 million in high bids, beating the $104 million mark set during the first competitive oil and gas lease sale in the Indiana-sized reserve, which was held in 1999 during the Clinton administration.

Eleven companies submitted bids for more than 1.3 million acres of the nearly 5.5 million acres offered in the auction.

Kevin Pendergast, Alaska state director for the U.S. Bureau of Land Management, called the results “historic.”

“This is the strongest sale we have ever had in the National Petroleum Reserve in Alaska by nearly every measure. It makes clear that for the NPR-A, despite all the successes to date, the best days are still ahead,” Pendergast said at the conclusion of the bid opening, which lasted about two hours.

In statements issued after the bid reading, federal and state officials hailed the results.

“Today’s lease sale underscores the National Petroleum Reserve in Alaska’s vital role in strengthening America’s energy security while fueling economic growth across Alaska,” Secretary of the Interior Doug Burgum said in a statement. “The Reserve was created to support our nation’s energy needs, and this successful sale demonstrates what’s possible when we align responsible development with that original purpose.”

Gov. Mike Dunleavy celebrated the results in a Facebook post that thanked President Donald Trump “for believing in the great State of Alaska.”

“Today’s record setting NPR-A lease sale is a major win for our state and our country. It reinforces Alaska’s role as a reliable energy producer, supports high-paying jobs for our families, generates additional revenue for the state, and strengthens American energy security at a time when energy security is more important than ever,” he said in the post. “Alaskans have demonstrated that we know how to unlock our vast resources while protecting the land for future generations. This is exactly the kind of balanced, commonsense progress Alaskans have been calling for.”

The lease sale was one of five mandated in the reserve over the next 10 years by the sweeping budget and tax bill called the “One Big Beautiful Bill Act.” That mandate calls for lease sales to be conducted under a Trump administration management plan that opened 82% of the reserve to oil development. Previously, the Obama administration held annual lease sales in the petroleum reserve, but that administration’s management plan protected about half of the land through the designation of “special areas” considered important to wildlife and to Native cultural practices.

Prominent bidders were energy giants ConocoPhillips and Repsol, which are already active in the area. ConocoPhillips is developing a huge project within the reserve, the Willow Ppoject, that is expected to produce up to 180,000 barrels a day after its expected startup in late 2029. Repsol is a partner in another huge oil field, Pikka, which is on state land bordering the reserve and is set to start production this year.

The petroleum reserve and adjacent state and Native-owned lands along its eastern border are considered highly prospective for new oil finds because of a geological feature called the Nanushuk Formation that underlies it.

Federal officials auctioned tracts of protected land

Much of the bidding in Wednesday’s sale was for territory that was previously off-limits to oil development under protections that date as far back as the Reagan administration.

The inclusion of long-protected land in the sale, predominantly the area around ecologically sensitive Teshekpuk Lake, made the lease sale contentious. It is the subject of two lawsuits filed by Native and environmental groups.

Bids were accepted even for tracts within an area encircling Teshekpuk Lake, the North Slope’s largest lake, despite a federal court order issued Monday that reinstated development prohibitions there.

U.S. District Court Judge Sharon Gleason on Monday issued an injunction reinstating a right-of-way agreement with Nuiqsut Trilateral Inc., a partnership of Nuiqsut’s city and tribal governments and Kuukpik Corp., the village for-profit Native corporation.

Nuiqsut, an Inupiat village of about 500, is the community closest to oil development occurring in the reserve, including the Willow project. Under the agreement, oil development is banned within the right-of-way territory, though the Nuiqsut Trilateral Inc. has the right to waive that ban.

The court ruling was not mentioned Wednesday when BLM officials in Alaska opened the bids.

But in a statement issued later in the day, the U.S. Department of the Interior acknowledged that BLM did sell tracts that lie within the Nuiqsut right of way and that legal issues concerning those tracts remain.

“We can confirm that lease offerings within the right of way are included in today’s sale. Any lease issuance for tracts within the right of way will be consistent with the court’s order,” the statement said.

DOI officials did not elaborate on how they would follow the court order. 

Criticism of expanded lease offerings, but praise as well

The Trump administration’s decision to auction off long-protected land, and especially its decision to press forward with leasing of tracts within the Nuiqsut right of way, dismayed critics.

Among them was Rosemary Ahtuangaruak, leader of one of the plaintiff groups suing the Department of the Interior over its management of the petroleum reserve. She criticized the Trump administration for abandoning protections deemed important for several generations of Indigenous North Slope residents.

She cited in particular a narrow corridor of land northeast of the lake that is important to migration of the Teshekpuk Caribou Herd. The BLM accepted a $2 million bid from a company called Epoch Oil and Gas LLC for a large block within that migration corridor.

“It’s very concerning that they’re not putting a better foot forward in protecting what’s important about this area,” said Ahtuangaruak, a resident of Nuiqsut and leader of the group Grandmothers Growing Goodness. “For me, it’s really important that we push back on the activities that are encroaching around us.”

She said it was hard for her to watch the latest lease sale unfold because it added to a pattern of development encroaching on the village and resulting problems like air pollution and the January accident that overturned a huge drill rig intended for ConocoPhillips work in the area.

“It’s painful every time I watch these because these are important traditional land use areas. And the further they get into the Teshekpuk Lake area, the more traditional land use areas are going to be impacted,” Ahtuangaruak said.

The Trump administration’s decision to press ahead with auctioning land within the area protected by the Nuiqsut Trilateral right-of-way agreement drew particular ire from critics.

A plain reading of the right-of-way agreement shows that leasing in that area is not allowed without a waiver from the Nuiqsut group, said Andy Moderow of the Alaska Wilderness League.

“For the administration to not even acknowledge that is absurd,” he said.

In contrast, a different organization representing Indigenous people of the North Slope, Voice of the Arctic Iñupiat, praised the Trump administration’s management of the lease sale and celebrated its results.

“Today’s lease sale proves what we have been saying for years: when there is meaningful policy in place supporting responsible onshore development, industry interest will follow,” Nagruk Harcharek, Voice of the Arctic Iñupiat’s president and chief executive, said in a statement. “Over the past year, we have supported the Trump-Vance administration and Congress’s efforts to build more durable policies affecting our homelands. This successful NPR-A lease sale is a gratifying reminder (of) our work that will strengthen our self-determination for generations to come.”

Half of the royalties derived from oil production in the National Petroleum Reserve are designated for North Slope communities through a grant program established in federal law.

A competitive auction

Lease sale bidding was competitive, with some tracts receiving as many as six different offers. ConocoPhillips focused much of its bidding on tracts near the eastern border of the lease sale area and closest to its Willow project.

ConocoPhillips did not bid for any tracts within the Nuiqsut Trilateral right of way, however,

Exxon Mobil was among the companies that bid for tracts within the right-of-way area, emerging as the apparent winner of tracts along the southern shore of the lake.

The lease sale marks a return to Alaska of sorts for Exxon.

While it maintains part ownership of the Prudhoe Bay field and the trans-Alaska oil pipeline, Exxon pared down its Alaska presence in recent years. In 2021, it transferred the operator position at the Point Thomson field to Hilcorp. Earlier that year, the company dropped its longtime corporate sponsorship of the Iditarod Trail Sled Dog Race.

Also returning to Alaska through the lease sale is Royal Dutch Shell. The bids submitted by Repsol were in partnership with Shell Frontier Oil and Gas Inc., a company subsidiary. Several of those Repsol-Shell winning bids were for over $2 million per tract.

Shell engaged in an expensive Arctic offshore exploration program in past years that turned out to be a failure. After spending at least $7 billion and wrecking a drill ship, Shell in 2015 abandoned its Arctic offshore program and eventually dropped its leases in the Chukchi and Beaufort Seas. The company in 2024 relinquished leases in state offshore territory.

Another active bidder was North Slope Exploration LLC, which is a unit of Denver-based Armstrong Oil and Gas. The company was the high bidder on over 70 tracts, according to preliminary results, adding to acreage in the reserve acquired during the 2019 lease sale.

The debate continues

While there is excitement among development supporters about the big sale, legal questions about the lease sale and the management plan under which it was conducted persist.

While Gleason on Monday issued the preliminary injunction reinstating the Nuiqsut Trilateral right of way, thus erecting a roadblock to any oil development in that approximately 1-million-acre area, on Wednesday she rejected the request from Ahtuangaruak’s group for a broader injunction that would have barred leasing in a wider region around Teshekpuk Lake.

Gleason, in her Wednesday ruling, said the Grandmothers Growing Goodness-Wilderness Society plaintiffs could try for another injunction should the BLM authorize any surface-disturbing activities in the formerly protected area.

That lawsuit remains active, as does the lawsuit filed by Nuiqsut Trilateral Inc., which is seeking a permanent reinstatement of the right-of-way agreement.

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