Biden Gulf of Mexico Lease Sale Results Are In

The Bureau of Ocean Energy Management (BOEM) has announced that Gulf of Mexico Lease Sale 257 generated $191,688,984 in high bids for 308 tracts covering 1.7 million acres in federal waters of the Gulf of Mexico (GOM).

A total of 33 companies participated in the lease sale, submitting $198,511,834 in total bids, BOEM revealed. ExxonMobil Corporation submitted the highest number of total bids at 94 and Chevron U.S.A. Inc submitted the largest value of total high bids at $47,128,011, lease sale 257’s final notice of sale information package shows. Other companies participating in the sale included Shell Offshore Inc, BP Exploration & Production Inc and Equinor Gulf of Mexico LLC.

Revenues received from offshore oil and gas leases are directed to the U.S. Treasury, certain Gulf Coast states and local governments, the Land and Water Conservation Fund and the Historic Preservation Fund. Lease Sale 257 offered approximately 15,148 unleased blocks located from three to 231 miles offshore, in the GOM’s Western, Central and Eastern Planning Areas, in water depths ranging from nine to more than 11,115 feet.

Back in June this year, a federal judge restrained the Biden administration from implementing the pause of new oil and natural gas leases on public lands and offshore waters as set forth in Section 208 of Executive Order 14008 back in January. It was also ordered that the administration would be restrained from implementing the pause with respect to Lease Sale 257, Lease Sale 258 and all eligible onshore properties. 

BOEM noted that the latest sale was consistent with the U.S. District Court’s preliminary injunction, while the government appeals the decision. The Biden-Harris administration is continuing its comprehensive review of its offshore and onshore oil and gas leasing programs and initiating reforms, BOEM stated.

In February, BOEM announced that it was rescinding the record of decision for GOM Oil and Gas Lease Sale 257. The decision, which BOEM noted had been made in response to Biden’s Executive Order 14008, paused planning for the proposed sale, which was initially expected to occur in March.

National Ocean Industries Association Response

Commenting on the latest GOM lease sale, National Ocean Industries Association (NOIA) President Erik Milito said, “lease Sale 257 reflects the U.S. Gulf of Mexico’s record as a low carbon energy basin”.

“Energy companies are increasingly making decisions that incorporate climate and ESG factors and want to produce oil from regions with a low carbon intensity. With its world class infrastructure and prospective resources, the Gulf of Mexico provides an incredible value proposition in society’s efforts to tackle climate change while preserving jobs and economic growth and mitigating against inflationary energy prices,” Milito added in the statement, which was sent to Rigzone.

“While providing a lower carbon energy alternative to oil produced by foreign, higher emitting producers, like Russia and China, the Gulf of Mexico supply chain is also contributing to the build-out of the American offshore wind sector and is investing in emissions mitigation solutions such as carbon capture and storage,” he went on to say.

Milito noted that the benefits that flow from the GOM oil and gas sector are vast.

“The Gulf of Mexico supports hundreds of thousands of high paying and accessible jobs, generates vital government revenues for conservation and recreation programs, including ones in economically distressed urban areas, and provides home grown energy to help avert inflationary risks and proactively ensure affordable energy for all walks of life, especially low-income communities,” he stated.

“Regardless of party, policymakers should embrace the Gulf of Mexico and recognize it as a national strategic energy asset. Continued leasing is critical to our energy future; good decisions today will benefit America tomorrow,” Milito added.

With the current leasing program expiring this coming summer, the Biden administration must expeditiously finalize the next five year program for OCS oil and gas leasing, Milito warned.

“Not only is the development of a new leasing program required by law, but continued lease sales will advance climate progress, stimulate continued economic growth, support high-paying jobs throughout the country, and strengthen our long-term national security,” he said.

To contact the author, email andreas.exarheas@rigzone.com