The Division of Oil and Gas is seeking comments regarding the Commissioner’s “Preliminary Best Interest Finding and Determination for the Sale of Alaska North Slope Royalty Oil to Petro Star Inc.” The Department of Natural Resources proposes to sell the State’s North Slope royalty in-kind oil to Petro Star Inc. for processing at its refineries in North Pole and Valdez. The amount of royalty oil contemplated under this proposed contract is as follows: approximately 12,500 barrels per day during the first two years and between 10,000 and 12,500 barrels per day during the remaining three years of the proposed five-year term of the contract. The deadline for comments on this Preliminary Best Interest Finding and Determination is 4:30 PM AST, March 2, 2022.
The Commissioner of the Department of Natural Resources proposes to sell royalty oil from the State oil and gas leases on the North Slope under a five-year contract. Deliveries of royalty oil under this proposed contract will have an estimated starting date of January 1, 2023 and continue until December 31, 2027. The price provision in the proposed contract is based on a formula that relies on accepted industry price reporting services and resembles the formulas used to calculate value of royalty oil paid to the State by the North Slope producers. The Commissioner’s Preliminary Best Interest Finding and Determination includes a draft of the sales contract, provides an analysis of its specific provisions, and how it will serve the best interests of the state under the criteria set out in AS 38.05.183 and AS 38.06.070.
The public can access this document at: https://dog.dnr.alaska.gov/Library/
These findings are preliminary; and final conclusions have not been reached. Comments received from the public and from the Royalty Board will be used to determine whether the proposed sales contract is in the state’s best interest. If the Commissioner determines that the proposed sale is in the state’s best interest and if the Royalty Board recommends that the sale go forward, a bill will be introduced in the legislature to approve the contract.
Comments should be emailed to: sean.clifton@alaska.gov
Or mailed to:
Division of Oil and Gas
550 W. 7th Avenue, Suite 1100
Anchorage, Alaska 99501-3563
Phone: (907) 269-8800