Alaska tells BlueCrest to produce Cook Inlet gas by 2027 or give up the lease

Alaska has told an oil company to drill for gas in Cook Inlet by early 2027 or give up the lease.

BlueCrest Energy has held the Cosmopolitan unit for years without developing its gas, and has been in default on the lease since May 23, 2025. In an Aug. 14 letter, Natural Resources Commissioner John Crowther ordered the company to restart rig preparation, file a development plan showing a drilling date, and prove it has the money to carry that plan out. Gas production must begin by March 31, 2027. The filings are due within 30 days, about Sept. 13.

Without development, the letter says, the unit must be relinquished or transferred to an operator that can drill it.

Southcentral burns about 70 billion cubic feet of gas a year. Cook Inlet produced roughly 61 billion in 2025, down from 79 billion in 2016.

BlueCrest was supposed to show funding for the H10 well and the Tyonek gas project by August 2025, file status updates every two months and give the state a technical presentation. Crowther wrote that the company filed those updates and that his office met the investor several times, assurances that "prompted DNR to delay actions." Rig preparation began in late January and stopped in mid-May when the funding ran out.

The day before the letter, BlueCrest said it had reached an agreement in concept with a funding entity. Crowther called that positive and said it needs to become verifiable progress.

The unit produces oil, averaging 506 barrels a day in June. What gas comes up is incidental to those operations. The Tyonek gas project the state wants drilled has not been developed.

Sen. Bill Wielechowski said Aug. 10 the state needs to hear from the department about "why they have let BlueCrest sit on those leases for a decade."

Natural Resources disclosed the letter Thursday to the Legislature's Joint Resources Committee. BlueCrest's response is not part of that presentation.