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Department of Natural Resources
Oil & Gas Development
Results Summary | Details | Questions/Comments
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| | The Division of Oil and Gas manages oil and gas lands in a manner that assures both responsible oil and gas exploration and development and maximum revenues to the state.
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| | - Make prospective lands available for oil and gas exploration, development, and production on a predictable basis.
- Administer conventional oil and gas leases and exploration licenses, as well as exploration incentive programs.
- Maximize the economic and physical recovery of hydrocarbon resources through unitized or cooperative operations, exploration, and development.
- Ensure that the state receives full value from the extraction and sale of state oil and gas resources.
- Develop marketing strategies and negotiate agreements for the sale of royalty oil and gas to provide in-state benefits and revenue enhancements.
- Ensure that bonus, rental, license fees, net profit, and royalty payments are correct, allocated to the proper revenue fund, and received when due.
- Ensure that shared federal bonus, rent, and royalty revenues are properly received and allocated to the proper revenue fund.
- Ensure that exploration, leasehold, and unit-related operations are conducted in a timely and environmentally sound manner.
- Provide technical and policy support for the Alaska congressional delegation, the governor's office, the legislature, and the commissioner of DNR.
- Provide publicly available existing and new oil and gas related information to technical users, the general public, and the press through technical publications, informational pamphlets, the web site, or personal contact.
- Advocate responsible oil and gas development throughout the state.
- Adjudicate exploration and development permits effectively and maintain a proactive inspection program.
- Ensure that the state's resource ownership interests are effectively represented in the AGIA process.
- Evaluate the geological, geophysical, and engineering aspects of unit and participating area applications and calculate tract factors to determine the state's royalty share.
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 End Result: |
Strategies to Achieve End Result
| | A: Promote oil, gas, and geothermal exploration in Alaska. Details > |
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| A1: Market Alaska's proven and potential oil, gas, and geothermal resources. Details > | |
| | End Result: |
Strategies to Achieve End Result
| | B: Maximize benefits of resource development to the state. Details > |
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| B1: Timely evaluation of complete applications received for exploration and development. Details > | |
| | End Result: |
Strategies to Achieve End Result
| | C: Maximize financial benefits of oil and gas production to the state.
Details > |
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| C1: Record royalty report information for accuracy in accounting and auditing. Details > | |
| | End Result: |
Strategies to Achieve End Result
| | D: Ensure the state’s interests are represented in the AGIA process through technical and commercial support. Details > |
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| D1: Authored and submitted laws to encourage expedited development and maximize value to the state. Details > | |
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| A:
Result - Promote oil, gas, and geothermal exploration in Alaska. |
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Target #1: Award oil, gas, and geothermal leases within nine months of sale.
Status #1: In FY09, 100 percent of leases were awarded within nine months. Overall average award time was seven months, up one month from FY08.
Average award time for each sale
| Year |
Aver # months |
| 2009 |
7
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| 2008 |
6
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| 2007 |
7
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Analysis of results and challenges: FY09: 100 percent of leases awarded within nine months of sale. Leases resulting from North Slope sale awarded within seven months; Beaufort Sea awarded within nine months and Cook Inlet awarded within two months.
FY08: 100 percent of leases awarded within nine months of sale. Leases resulting from North Slope and Beaufort Sea sale awarded within eight months; North Slope Foothills awarded within six months; and Cook Inlet leases awarded within three months.
In 2008, the division implemented a new policy of pre-adjudicating lease tracks prior to requesting title reports in order to reduce the overall processing time. The pre-adjudication combined with the below average turnout reduced the overall cycle time necessary to award leases.
FY07: 100 percent of leases awarded within nine months of sale. Leases resulting from North Slope and Beaufort Sea sale awarded within nine months; and Alaska Peninsula leases awarded within five months.
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Target #2: Issue exploration permits, both drilling and seismic, within timelines established by the Alaska Coastal Management Program (ACMP).
Status #2: In FY09, 95 percent of exploration permits were issued within the ACMP timelines, same as FY08.
Permits issued on time.
| Year |
YTD Total |
| 2009 |
95%
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| 2008 |
95%
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| 2007 |
98%
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Analysis of results and challenges: FY09: 95 percent of exploration permits were issued within the ACMP timeline.
FY08: 95 percent of exploration permits were issued within the ACMP timeline.
FY07: 98 percent of exploration permits were issued within the ACMP timeline.
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| A1:
Strategy - Market Alaska's proven and potential oil, gas, and geothermal resources. |
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Target #1: Publish annually a five-year oil and gas lease schedule program.
Status #1: In FY09, the State of Alaska Five-Year Program of Proposed Oil and Gas Lease Sales was published and distributed in January, same as FY08.
Publish a five-year lease sale schedule annually
| Fiscal Year |
Pub & Dist |
| FY 2009 |
January
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| FY 2008 |
January
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| FY 2007 |
January
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Analysis of results and challenges: FY09: The State of Alaska Five-Year Program of Proposed Oil and Gas Lease Sales was published and distributed in January 2009.
FY08: Five-year program was published and distributed in January 2008.
FY07: Five-year leasing program published and distributed in January of 2007.
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Target #2: Hold five areawide lease sales according to most recent schedule published in the five-year program.
Status #2: In FY09, five lease sales held according to schedule, same in FY08.
Lease Sales held according to schedule
| Year |
Scheduled Sales |
| 2009 |
5
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| 2008 |
5
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| 2007 |
5
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Analysis of results and challenges: FY 09: Five lease sales held on schedule. Lease sales for the North Slope and Beaufort Sea were held in October 2008 with a combined sale total of $49,913,849.35 in valid bids. Lease sales for the Alaska Peninsula and Cook Inlet were held in May 2009 with a combined sale total of $98,711.92 (no bids received for the Alaska Peninsula area).
FY08: Five lease sales held on schedule. Lease sales for the North Slope and Beaufort Sea were held in October 2007 with a combined sale total of $1,928,248.44. Lease sales for the Alaska Peninsula and North Slope Foothills were held in February 2008 with a combined sale total of $359,424.00 (no bids received for the Alaska Peninsula area). Lease sale for the Cook Inlet area was held in May 2008 with a sale total of $625,026.16.
FY07: Five lease sales held on schedule. Lease sales for the North Slope and Beaufort Sea (2006A) were held in October 2006 with a combined sale total of $2,925,587.45. Lease sales for the Alaska Peninsula and North Slope Foothills were held in February 2007 with a combined sale total of $38,778.56 (no bids received for the North Slope Foothills area). Lease sale for the Cook Inlet area was held in May 2007 with a sale total of $2,113,068.62.
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| B:
Result - Maximize benefits of resource development to the state. |
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Target #1: Issue determinations on applications filed for exploration and development within establishes timelines.
Status #1: In FY09, 96 percent of complete applications evaluated received a determination within established timelines, down from 100 percent in FY08.
Percent of determinations issued on time
| Year |
YTD Total |
| 2009 |
96%
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| 2008 |
100%
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| 2007 |
100%
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Analysis of results and challenges: FY09: On average, 96 percent of complete applications received are issued a determination within the established timelines.
FY08: 100 percent of complete applications for exploration and development received a determination within the established timelines.
FY07: 100 percent of complete applications for exploration and development received a determination within the established timelines.
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Target #2: Inspect permitted operations once every three years for compliance.
Status #2: In FY09, 90 percent of active operations were inspected and 100 percent of seismic and exploratory operations inspected, down from 95 percent of active operations inspected in FY08.
Percent of permitted operations inspected every 3 years
| Year |
YTD Total |
| 2009 |
95%
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| 2008 |
95%
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| 2007 |
90%
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Analysis of results and challenges: FY09: 90 percent of active production operations were inspected and 100 percent of seismic and exploratory operations inspected. Ongoing development of an internal operations tracking system will contribute to future program benefits.
FY08: 95 percent of active production operations were inspected.
More complex applicant and application issues are increasing the need for inspections and compliance oversight. Accordingly, a program of comprehensive inspection of new and ongoing exploration and production activities over a three-year horizon will allow proper scheduling of seasonal inspections and follow-up inspections of exploration or production projects.
FY07: 95 percent of active production operations inspected.
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| B1:
Strategy - Timely evaluation of complete applications received for exploration and development. |
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Target #1: Evaluate each complete plan of exploration received within 30 days.
Status #1: In FY09, 100 percent of complete applications received have been evaluated within 30 days, same in FY08.
Percentage of plan of exploration evaluated within 30 days.
| Year |
YTD Total |
| 2009 |
100%
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| 2008 |
100%
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| 2007 |
100%
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Analysis of results and challenges: FY09: 100 percent of complete applications received have been evaluated within 30 days of receipt.
FY08: 100 percent of complete applications received evaluated within 30 days.
FY07: 100 percent of complete applications received evaluated within 30 days.
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Target #2: Evaluate each complete plan of development received within 60 days.
Status #2: In FY09, 100 percent of complete applications received have been evaluated within 60 days, same in FY08.
Percent of plan of development evaluated within 60 days.
| Year |
YTD Total |
| 2009 |
100%
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| 2008 |
100%
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| 2007 |
100%
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Analysis of results and challenges: FY09: 100 percent of complete applications received have been evaluated within 60 days of receipt.
FY08: 100 percent of complete applications received evaluated within 60 days.
FY07: 100 percent of complete applications received evaluated within 60 days.
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Target #3: Evaluate each complete lease plan of operation and unit plan of operation received within Alaska Coastal Management Program (ACMP) timelines.
Status #3: In FY09, 95 percent of complete plans received were evaluated within ACMP timelines, down from 100 percent in FY08.
Percent of plans issued within timelines.
| Year |
YTD Total |
| 2009 |
100%
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| 2008 |
100%
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| 2007 |
100%
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Analysis of results and challenges: FY09: Ninety-five percent of lease plans of operation and unit plans of operation were issued within the ACMP timeline. Offshore development projects continue to be permitting challenges due to increased environmental and oil spill response issues.
FY08: 100 percent of permits were issued on time.
Routine ongoing operational permits are being issued on time. Recent developments in and near the Beaufort Sea and smaller onshore accumulations require permit solutions that do not fit the traditional pattern of plans of operation approvals. Approvals for off-unit pipelines and facilities, and sharing of facilities with other units, issued as AS38.05.850 easements, have significantly larger administrative processes and present new issues that transcend routine procedures.
FY07: 100 percent of permits were issued on time.
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| C:
Result - Maximize financial benefits of oil and gas production to the state.
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Target #1: Accurately account for royalty payments received from operators and lessees monthly.
Status #1: In FY09, $2,518,783,114.05 was accurately accounted for and collected.
Accountability for Royalty Payments
| Year |
YTD Total |
| 2009 |
$2,518,783,114.05
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| 2008 |
$3,184,823,044.53
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| 2007 |
$2,163,341,763.48
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Analysis of results and challenges: FY09: Accounted for a total of $2,518,783,114.05 in royalty revenue.
FY08: Accounted for a total of $3,184,823,044.53 in royalty revenue.
FY07: Accounted for a total of $2,163,341,763.48 in royalty revenue.
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Target #2: Complete four audits per year.
Status #2: In FY09, completed three audits, down from ten completed in FY08.
Number of Audits Completed
| Year |
YTD Total |
| 2009 |
3
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| 2008 |
10
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| 2007 |
7
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Analysis of results and challenges: FY09: Three audits were completed.
FY08: Ten audits were completed.
FY07: Seven audits were completed.
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| C1:
Strategy - Record royalty report information for accuracy in accounting and auditing. |
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Target #1: Enhance data management software that accurately records volume and value reports for accounting monthly.
Status #1: In FY09, data management software is still in development.
Accurately records reports for monthly accounting
| Year |
Monthly recorded reports |
| 2009 |
Still in development
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Analysis of results and challenges: FY09: Still in development.
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| D:
Result - Ensure the state’s interests are represented in the AGIA process through technical and commercial support. |
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Target #1: Develop regulations for royalty valuation.
Status #1: In FY09, the commercial section is currently on time and on budget with the preparation of regulations related to the royalty valuation inducement in AS 43.90.010(990).
Analysis of results and challenges: FY09: The Commercial section has selected a contractor to prepare regulations related to the royalty valuation inducement in AS 43.90.010.990, in conjunction with the Dept. of Law. The target for the project deliverable is the AGIA open season ending July 31, 2010 this FY09 project is currently on time and on budget.
The state has selected a contractor to co-author the detailed royalty regulations for the Alaska Gasline Project.
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Target #2: Develop regulations for RIK/RIV switching for natural gas.
Status #2: In FY09, the commercial section is currently on time and on budget with the preparation of regulations.
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| D1:
Strategy - Authored and submitted laws to encourage expedited development and maximize value to the state. |
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Target #1: Work collaborativelty with the gasline office and two contractors to develop regulations for royalty valuation.
Status #1: In FY09, the commercial section is currently on schedule for public noticing proposed regulations for end project deadline of AGIA open season in FY11.
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Current as of Nov 16 2009 9:00:57 |
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