US announces sale of oil and gas leases

US Secretary of the Interior Ryan Zinke announced the sale of new offshore oil and gas leases in the Gulf of Mexico on Thursday. The move represents the first offshore sale under the National Outer Continental Shelf Oil and Gas Leasing Program for 2017 – 2022.

According to Zinke, the sale is scheduled to take place on August 16, 2017, with 306,752 square kilometres offered for oil and gas exploration and development off the coasts of Texas, Louisiana, Mississippi, Alabama and Florida.

The announcement also included reduced royalty rates for some of the new leases, with companies expected to pay 12.5% for leases in less than 200 metres of water, instead of a rate of 18.75% that had previously been proposed.

The sale follows last week’s news that Zinke had signed an order to hold more lease sales and speed up the permit approval process for oil and gas exploration. Reduced royalty rates encourages drilling by oil companies who have suffered lower profits from a global downturn in oil prices and demonstrates the Trump administration’s commitment to increase the domestic supply of hydrocarbons in the USA.