By Yereth Rosen
Oil company bidding for the acreage being offered by the federal government's Minerals Management Service surpassed the previous record set in the early 1980s, underscoring how high oil prices have transformed undesirable high cost regions into exploration hotspots.
"It is now worth the money to explore some of these areas that were so expensive and are still so expensive to get into," Luthi told reporters after the bids were opened.
Shell was pleased to pick up the territory, which included areas that Shell had explored in about 25 years ago but relinquished as uneconomic, said Annell Bay, the company's vice president for exploration in the Americas.
ConocoPhillips, Eni, StatoilHydro and Repsol YPF were also active bidders. Conoco offered several millions of dollars for many individual tracts, often in direct competition with Shell. ConocoPhillips' highest bid for a single tract was $71.1 million, though Shell outbid it for that tract, according to preliminary results.
The MMS believes up to 15 billion barrels of recoverable oil reserves and 77 trillion cubic feet of recoverable gas reserves lie beneath the Chukchi Sea.
The auction of 5,355 exploration blocks covering 29.7 million acres, 25 to 50 miles (40 to 80 km) offshore, has been opposed by environmentalists who say too little is known about the possible impact of drilling on populations of polar bears and walruses in the area.
A small group of protesters, one dressed in a polar bear costume, braved temperatures of -24 degrees Celsius (-11 Fahrenheit) outside the public library in Anchorage where the lease sale was being held.
Kingik said he was dismayed at the intense interest in drilling the waters off his village.
Alaska native groups and environmentalists are already fighting Shell's plans to drill on acreage in the adjacent Beaufort Sea.
Oil production from the Chukchi Sea is at least a decade away, MMS officials said, citing the need for an undersea pipeline to connect the remote area with the Trans Alaska Pipeline.
