Offshore Texas draws only 33 bids

The US government’s licensing round for acreage offshore Texas has attracted the lowest interest since 1996, a sign of the restraints upstream companies are placing on exploration efforts as they struggle with a depressed energy market.

Only five companies signed up for Wednesday’s lease sale, which saw bids on just 33 out of the 4,083 blocks on offer. None of the 33 blocks will be contested, as they only received one bid each.

Deepwater blocks at depths greater than 1,600 metres accounted for 21 of the 33 bids, a surprising figure considering they are typically the most expensive to develop. Blocks between 800 and 1,600 metres received the next highest, with seven bids, while blocks between 400 and 800 metres and less than 200 metres got three and two bids, respectively.

The offshore Texas licensing round is typically the less popular of the two rounds designated for the US Gulf of Mexico. However, the second, which took place in March 2015 and covers acreage in the central part, also saw poor turnout, receiving the lowest number of bids since 1986.