The Minerals Management Service will evaluate a second sale in the federal waters of Cook Inlet. The MMS issued a Request for Information and Notice of Intent to Prepare an Environmental Assessment for Cook Inlet Sale 199. Cook Inlet Sale 199 is tentatively scheduled for May 2006. This is the second Cook Inlet sale held under the 2002-2007 Five Year Plan.

The federal OCS area in Cook Inlet remains relatively unexplored, with the last exploration well drilled in 1984. Cook Inlet is important for the State of Alaska and those who live in Anchorage and the Kenai Peninsula Borough, where residents and industries need a stable supply of energy and fuel.

The goal of this sale is to supplement energy supplies needed in south-central Alaska. According to MMS Regional Director, John Goll, "MMS's goal is to keep options open both nationwide and in the state in the search for new energy. By holding predictable sales in the federal portion of Cook Inlet, we will complement the state's strong program to find the energy and raw materials to keep the state's economy growing. We hope this sale will be an added incentive for someone to bring a drill rig into Cook Inlet."

MMS is proposing to let leases in the federal waters of Alaska's Cook Inlet between three and 30 nautical miles offshore. The area covers 2.5 million acres extending just south of Kalgin Island to just northwest of Shuyak Island. Water depths in the area range from about 30 to 650 feet.

"Our proposed sale includes a set of stipulations that we have used successfully in the past to safeguard the fishing and tourism which is so vital to the economy of the Cook Inlet area," Goll says. MMS has a comprehensive regulatory program in place that covers all aspects of the industry's drilling procedures that have successfully minimized risk. Several requirements are attached to the sale to supplement these rules, including provisions for fisheries, biological resources and use of pipelines to transport any discovered production.

The MMS is evaluating a package of economic incentives for Federal leases in Cook Inlet. This includes a longer primary term of eight years, lower minimum bid of $10 per acre, annual rental rates of $2 per acre, and royalty suspension volumes (RSVs). The RSVs would relieve royalty payments on a producing lease up to the first 30 MMboe. The suspension applies to both oil and natural gas and includes price floor and ceiling thresholds.

The MMS has more than 20 planned or ongoing studies applicable to Cook Inlet information needs. Information on the status of these studies is available at.

12/28/04