US Gulf lease sale nets USD 275 million

NEW ORLEANS, March 23, 2017 – The US Department of the Interior (DOI) and Bureau of Ocean Energy Management (BOEM) announced the results of the federal government’s latest Gulf of Mexico lease offering on Tuesday.

Lease Sale 247 in the Central Planning Area of the Outer Continental Shelf, offshore Louisiana, Mississippi and Alabama, attracted 189 bids from 28 offshore oil and gas companies, according to the DOI.

The high bids, which were for 163 tracts covering 3,697 square kilometres, totalled USD 274.8 million. All bids will be evaluated during a 90-day process to ensure fair market value was offered before the leases are officially awarded.

More than 85% of the bid monday came from the top seven bidders: Shell, Statoil, Hess, Chevron, ExxonMobil, Anadarko and Total. Royal Dutch Shell’s Gulf-based subsidiary Shell Offshore was the top bidder, submitting 20 bids amounting to USD 55.9 million. The company already has interests in 335 leases in the Gulf of Mexico.

BOEM estimates that this week’s auction could eventually result in 460 million-890 million barrels of oil and 53.8 bcm-110.4 bcm (1.9 tcf-3.9 tcf) of natural gas of production.

The sale was the final of 12 in the BOEM’s Gulf of Mexico Outer Continental Shelf Oil and Gas Leasing Program (2012-2017). The first 11 sales generated USD 3 billion in bid revenue for the federal government. Aside from sales in the Gulf of Mexico, the only other federal waters to be offered during the period are in the Cook Inlet of Alaska. That sale is scheduled for June 2017.

Earlier this month, the DOI announced the next five-year programme will begin in August of this year with Lease Sale 249, an offering of 295,421 square kilometres offshore Texas, Louisiana, Mississippi, Alabama and Florida for oil and gas E&P.

The new programme will run until 2022 and offer acreage in all unleased and unprotected federal waters in the Gulf of Mexico twice per year, along with one sale in the Cook Inlet planned for 2021. In the past, lease sales in the Gulf were restricted to geographic planning areas.

US Secretary of the Interior Ryan Zinke commented on the new programme at the time of the announcement.

“Opening more federal lands and waters to oil and gas drilling is a pillar of President Trump’s plan to make the United States energy independent,” Secretary Zinke said.

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