Gulf Of Mexico Lease Sale Nets $315M in Bids, Feds Suggest Trump Bounce
Offshore energy companies ponied up more than $315 million in bids to lease 913,542 acres in the Gulf of Mexico off the coast of Louisiana, Mississippi and Alabama on Wednesday.
The lease sale is the final one in the GOM under the Obama Administration’s Five-Year Plan, which made available all offshore areas with the greatest resource potential from 2012 through 2017. The first 11 sales in the program netted more than $3 billion in bid revenue on almost 73 million acres for development, according to information from the Interior Department.
The top five bidders included major oil and gas companies:
- Shell Offshore – $61 million
- Statoil – $51 million
- Chevron Corp. – $50 million
- Hess Corp. – $44 million
- ExxonMobil – $22 million
The Bureau of Ocean Energy Management (BOEM) said it offered 9,118 unleased blocks, covering 48 million acres, located from three to 230 nautical miles offshore Louisiana, Mississippi, and Alabama, in water depths ranging from nine to more than 11,115 feet.
“The Gulf of Mexico is one of the most productive oil and gas basins in the world, and its mature offshore and onshore infrastructure supports safe and responsible development of our domestic energy resources,” Secretary Zinke said.
BOEM estimates the lease sale could result in the production of up to 890 million barrels of oil, and up to 3.9 trillion cubic feet (Tcf) of natural gas. Sale terms require the protection of biologically sensitive resources as well as the mitigation of potential adverse effects on protected species.
“The Gulf of Mexico is one of the most productive oil and gas basins in the world, and its mature offshore and onshore infrastructure supports safe and responsible development of our domestic energy resources,” said Secretary of the Interior Ryan Zinke.
Congressman Rob Bishop, R-Utah, chairman of the House Committee on Natural Resources, said the engagement in the Gulf of Mexico parcels proves there is still interest in developing offshore federal oil and gas resources.
“For years we witnessed the prior administration deliberatively cancel or limit lease sales and use a lack of industry interest as the excuse,” Bishop said. “With a new administration that is open to responsible development, we are seeing a strong indication of the exact opposite – a private sector eager to unleash domestic production and competitive investment in our federal lands.”
The results show both an improving offshore oil and gas market and an optimism brought on by the Trump Administration for offshore leasing, exploration and development, said National Ocean Industries Association (NOIA) President Randall Luthi.
“The offshore oil and gas industry remains committed to staying in U.S. waters and underscores the importance of offshore development to the U.S. economy and domestic energy security,” Luthi said in a statement. “The offshore oil and gas industry provides tremendous economic and energy benefits for our nation.”
Between 2005 and 2014, offshore lease sales in the Gulf of Mexico generated about $80 billion for the U.S. Treasury, he said.
“We wholeheartedly agree with the administration that responsible offshore oil and gas development and expanded Gulf production are critical to America’s economic and energy security,” Luthi said.
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