Record Low Interest In US Gulf Of Mexico Leases Amid Oil Price Slump
NEW YORK, Aug 19 (Reuters) - A U.S. government sale of oil and gas drilling leases in the western Gulf of Mexico attracted the lowest number of bids on record on Wednesday as slumping oil prices kept producers from plowing money into expensive offshore prospects.
The yearly sale, held by the Bureau of Ocean Energy Management (BOEM), attracted $22.7 million in high bids, the smallest in the western Gulf since 1983 when leases were first broken down into regions, the BOEM said, reaping just one fifth of the value of last year's offers.
"The continuing drop in oil prices and low natural gas prices obviously affect industry's short-term investment decisions," BOEM Director Abigail Ross Hopper said in a statement, also stressing the long term potential of Gulf of Mexico oil and gas production.
"While this sale reflects today's market conditions...it underscores a steady, continued interest in developing deep water federal offshore oil and gas resources."
U.S. oil prices have slumped over the past year due to oversupply, from over $107 a barrel in June 2014 to $40 on Wednesday, denting oil producers' profits and leading to thousands of industry job cuts. Even cheaper onshore developments have stalled as companies reassess their yearly budgets.
In Wednesday's sale, five companies submitted 33 bids on 33 tracts covering 190,080 acres (76,923 hectares) in the western region, BOEM said.
Australia's BHP Billiton was the most active with 26 bids. BP made one bid, Colombia's Ecopetrol made four, three of which were made jointly with Anadarko Petroleum, and Houston-based Peregrine Oil and Gas made two.
Last year saw 93 bids on 81 tracts totaling $110 million in high bids. In 2012, when oil prices fluctuated between $100 and $80 a barrel, there were 131 bids on 116 tracts, with high bids hitting $133 million, a BOEM spokesman said.
(Reporting By Edward McAllister; Editing by Marguerita Choy)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- An Already Bad Situation in the Red Sea Just Got Worse
- USA Regional Banks Dramatically Step Up Loans to Oil and Gas
- Oil Markets Were Already Positioned for Iran Attack
- Valeura Makes Three Oil Discoveries Offshore Thailand
- North America Breaks Rig Loss Streak
- EU Offers $900MM in Funding for Energy Infrastructure Projects
- Germany to Provide $2.3B Aid for Decarbonization of Industrial Sectors
- Mexico Presidential Frontrunner Plans to Spend Billions on RE, Gas Power
- Chile's ENAP Says Working on Decarbonization Plan
- House Votes to Sanction China's Purchase of Iranian Oil
- Macquarie Strategists Warn of Large Oil Price Correction
- JPMorgan CEO Says LNG Projects Delayed Mainly for Political Reasons
- USA, Venezuela Secretly Meet in Mexico as Oil Sanctions Deadline Nears
- EIA Ups Brent Oil Price Forecast for 2024 and 2025
- Petrobras Discovers Oil in Potiguar Basin
- EIR Says Oil Demand Will Not Peak Before 2030
- Biden Plans Sweeping Effort to Block Arctic Oil Drilling
- Pantheon Upgrades Kodiak Estimates to 1.2 Billion Barrels
- Dryad Flags Red Sea 'Electronic Warfare' Alert
- USA Crude Oil Stocks Rise Almost 6MM Barrels WoW
- Oil and Gas Executives Predict WTI Oil Price
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Chinese Mega Company Makes Another Major Oilfield Discovery
- Oil and Gas Execs Reveal Where They See Henry Hub Price Heading
- Equinor Makes Discovery in North Sea
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Macquarie Strategists Warn of Large Oil Price Correction
- DOI Announces Proposal for Second GOM Offshore Wind Auction
- Standard Chartered Reiterates $94 Brent Call
- Chevron, Hess Confident Embattled Merger Will Close Mid-2024