Sale of State North Slope...
Date Listed: February 8
Newspaper ID #190634
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Sale of State North Slope Royalty Oil and Public Hearing of the Royalty Oil and Gas Development Advisory Board The Division of Oil and Gas is seeking comments regarding the Commissioner's Preliminary Finding and Determination of the State's Best Interest for the sale of approximately 18,000 to 30,000 barrels per day of North Slope royalty Oil to Flint Hills Resources Alaska, LLC. This sale will provide a supply of crude oil for the FHR refinery at North Pole, Alaska. The deadline for comments on the draft Commissioner's Finding is 4:30 PM AST, March 11, 2013. FHR currently has a ten-year contract that will expire on March 31, 2014. 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 commence on April 1, 2014 and continue until March 31, 2019. The price provision in the proposed contract is based on a formula that relies on accepted industry price reporting services and is similar to the formulas applied to the calculation of the royalty value paid to the State by the North Slope producers. The Commissioner's Preliminary 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. These findings are preliminary; 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, and if so, whether changes are needed. 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. On February 7, 2013, DNR published a legal notice in the Anchorage Daily News, the Fairbanks News-Miner, the Juneau Empire, and on February 10, 2013 in the Peninsula Clarion to invite the public to a hearing of the Alaska Royalty Oil and Gas Development Advisory Board and to provide oral comment on the proposed sale. The Royalty Board will meet on February 26, 2013 in the auditorium at the Noel Wien Library, 1215 Cowles Street, Fairbanks, Alaska, at 1:00 PM AST. At this hearing the Royalty Board will determine whether the proposed royalty oil sale contract meets the criteria set out in AS 38.06.070. The Board will also prepare a recommendation to the legislature. In addition to oral comments from the public, the Royalty Board will accept written comments if received by 4:30 PM AST on Friday, February 22, 2013. FOR INFORMATION CONCERNING THIS PROPOSED ROYALTY OIL SALE OR TO RECEIVE COPIES OF THE COMMISSIONER'S PRELIMINARY BEST INTEREST FINDING AND THE DRAFT PROPOSED CONTRACT, PLEASE CONTACT: Kevin Banks Division of Oil and Gas 550 W. 7th Avenue, Suite 1100 Anchorage, Alaska 99510-3560 Phone: (907) 269-8781 Email: kevin.banks@alaska.gov or see the Division of Oil and Gas website at http://dog.dnr.alaska.gov/ 13G-10-074 Published: February 8, 2013
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