Date Set for 1st GOM Lease Sale Post Macondo

Department of the Interior Secretary Ken Salazar and Bureau of Ocean Energy Management Director Tommy P. Beaudreau announced that BOEM will hold the first oil and natural gas lease sale in the Gulf of Mexico since the Deepwater Horizon accident in 2010. This oil and natural gas sale, Sale 218, trails BOEM’s completion of a supplemental environmental impact statement analyzing the effects of the Deepwater Horizon spill on the western Gulf of Mexico.

The last lease sale, WPA Gulf of Mexico Lease Sale 215, was cancelled on May 27, 2010. The Department of Interior said the cancellation allowed time to develop and implement measures to improve the safety of oil and gas development in federal waters. As well as provide greater environmental protection and substantially reduce the risk of catastrophic events.

"This sale is an important step toward a secure energy future that includes safe, environmentally-sound development of our domestic energy resources that will continue to reduce our dependence on foreign oil and create jobs here at home," Secretary Salazar said. "Since the Deepwater Horizon spill, we have strengthened oversight at every stage of the oil and gas development process, including deepwater drilling safety, subsea blowout containment, and spill response capability. Exploration and development of our Western Gulf’s vital energy resources will continue to help power our nation and drive our economy."

The sale will include all available un-leased areas in the western gulf planning area offshore Texas, which is the last remaining western gulf planning area sale in the scheduled 2007 to 2012 Outer Continental Shelf Oil and Natural Gas Leasing program in the Central and Western Planning Area. The un-leased areas can be viewed in the leasing maps and Official Protraction Diagrams (OPD’s).

The Department stated that Sale 218 includes five changes from WPA Sale 210 in August 2009:

  1. BOEM revised the initial period of the lease term for blocks in water depths of 400 meters to less than 1,600 meters,
  2. The minimum bonus bid has increased for blocks in water depths of 400 meters or deeper,
  3. No deepwater royalty suspension provisions will be offered for leases issued from this sale,
  4. Bids submitted for blocks within the U.S.-Mexico “Boundary Area” will be held unopened until on or before 30 days following a Transboundary Agreement that is executed or June 14, 2012, and
  5. The lease form has been revised.

The department said that these changes are based on a rigorous historical analysis of the last 15 years of lease sales in theGulf of Mexico. The analysis, adjusted for energy prices at time of each sale, demonstrates that leases that received high bids of less than $100 per acre have experienced virtually no exploration and development activities. They feel that by raising the minimum bid, it will discourage companies from inventorying offshore acreage that they are unlikely to explore during the lease term.

BOEM estimates that the lease sale could result in the production of 222 to 423 MMbbl of oil and 1.49 to 2.65 Tcf of natural gas. Lease Sale 218 includes 3,913 un-leased blocks spanning more than 21 million acres; and the areas reside nine to about 250 miles offshore in water depths ranging from 16 to more than 10,975 feet.

All terms and conditions for Western Sale 218 are detailed in the FNOS information package. The FNOS can also be viewed in the Federal Register.

The Louisiana Superdome in New Orleans will host lease sale 218 on Dec. 14, 2011. Public bid reading will begin at 9am.


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