Shell Takes Top Bid Spot for Offshore Lease Sale

Shell Takes Top Bid Spot for Offshore Lease Sale
The auction generated $120,868,274 in high bids for 93 tracts covering approximately 79 million acres in federal GOM waters.

With $27,877,809 spanning 21 high bids, Shell Offshore Inc. took the top spot among companies vying for Gulf of Mexico (GOM) blocks at the U.S. Department of the Interior’s Bureau of Ocean Energy Management (BOEM) Lease Sale 256 Wednesday.

The auction generated $120,868,274 in high bids for 93 tracts covering approximately 79 million acres in federal GOM waters, BOEM reported in a written statement emailed to Rigzone. The bureau pointed out that 23 companies submitting bids totaling $135,558,336 participated in the sale, which included 14,862 unleased blocks from three to 231 miles (five to 372 kilometers) offshore. It noted that water depths for the blocks – located in the GOM Western, Central and Eastern planning areas – range from nine to more than 11,115 feet (three to 3,400 meters).

According to information supplied by BOEM, other companies rounding out the top five for Lease Sale 256 based on the sum of high bids include:

  • Equinor Gulf of Mexico LLC: $22,158,274 (seven high bids)
  • BP Exploration & Production Inc: $17,130,319.25 (10 high bids)
  • Chevron U.S.A. Inc: $17,098,072 (10 high bids)
  • EnVen Energy Ventures, LLC: $7,699,000 (13 high bids)

“The fact that all of the blocks offered today have been offered, many times over the last few decades and exceeded expectations by generating $120 million in high bids, demonstrates the long-term economic promise contained in the world’s preeminent offshore basin,” commented Deputy Interior Secretary Kate MacGregor.

The head of the National Ocean Industries Association (NOIA) said the increase in offshore lease bids at Sale 256 underscores GOM’s ongoing value in the energy realm.

“Today we saw the importance of the Gulf of Mexico to America’s energy realm,” stated NOIA President Erik Milito. “The past year has been tough, but the noted increase in winning bids and number of bid on tracts demonstrates the continued resilience of the U.S. Gulf of Mexico. Long-term projections still show rising energy demand, including for oil and natural gas, and with its world-class infrastructure, safety and environmental performance and positive environmental justice attributes, the U.S. Gulf of Mexico should remain the region of choice for energy production.”

Milito also highlighted the economic impact of offshore oil and gas activity.

“Every dollar spent today is just the start of additional investment in America,” he said. “Companies will spend millions of dollars exploring, evaluating and, hopefully, producing from many of today’s lease blocks. These dollars translate to hundreds of thousands of high-paying jobs across every U.S. state and billions of dollars of government revenues, as well as funding for critical programs like the Land & Water Conservation Fund and national park maintenance established by the bipartisan Great American Outdoors Act.”

As Rigzone reported Wednesday, BOEM has proposed another region-wide GOM lease sale in March 2021.

A full summary of company bid results from Lease Sale 256 appears on BOEM’s website.

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