Oil and gas exploration on native lands: resource-backed wealth shared among all Alaskan Natives.

• Author: Liles, Patricia
• Position: NATIVE BUSINESS

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Alaska's largest resource contributor to the state's economy is its maturing oil industry, with the bulk of development work and production revenues flowing from North Slope fields. Alaska Native corporations are also financially benefiting from that industry, not only as oilfield service providers, but also as recipients of royalty payments for ownership of subsurface mineral rights on land located on the North Slope and in Cook Inlet.

SHARING WEALTH

Thanks to record high prices for crude oil and increased production from the Alpine oil field on the North Slope, this segment of revenue is providing substantial increases in income for all Alaska Native corporations, as most of an individual corporation's revenues received from natural resource development are shared, according to the 7(i) and 7(j) provisions of the Alaska Native Claims Settlement Act.

While the bulk of that oil-backed revenue comes from the North Slope, through the Arctic Slope Regional Corp., two other Native regional corporations, Doyon Ltd. and Ahtna Inc., are taking steps they hope will someday translate into royalties from oil and gas development on their lands located in the Interior and Southcentral portions of Alaska.

Doyon initially partnered in 2002 with three other companies to explore the Nenana Basin, located about 50 miles west of Fairbanks and due west of the Tanana River community of Nenana. The consortium, which included ASRC, Usibelli Coal Mine and operator Andex Resources, an oil and gas exploration firm based in Houston and Denver, completed about 200 line miles of seismic surveys in the first part of 2005, but has not returned to the field for more advanced work since.

Although Andex has recently left the consortium, the remaining partners continue to work to advance the project. In late July, they were finalizing agreements to bring new industry partners into the group, with the goal of planning a winter exploration program for early 2009.

WORK CONTINUES

"We hope to drill in the spring," said Norm Phillips, Jr., president and CEO of Doyon. "The targets we have developed are very suitable for hosting an economic quantity of gas."

Doyon and its partners are working to locate and mobilize a drill rig to use in the Nenana Basin this winter, with plans to target the program's first well about 4 miles west of the Tanana River village of Nenana. As a drilling contractor with seven rigs on the North Slope, Doyon would ideally provide the...