BOEM hosting U.S. largest offshore lease sale
- Business & Finance
The U.S. will on Wednesday conduct the largest ever offshore lease sale, offering more than 77 million acres in the U.S. Gulf of Mexico.
Lease Sale 250 offers all unleased and non-protected areas in the federal waters offshore Texas, Louisiana, Mississippi, Alabama, and Florida for oil and gas exploration and development.
According to a report by the Department of the Interior, the estimated amount of resources projected to be developed as a result of the proposed region-wide lease sale ranges from 0.21 to 1.12 billion barrels of oil and from 0.55 to 4.42 trillion cubic feet of gas. Most of the activity (up to 83% of future production) from the proposed lease sale is expected to occur in the Central Planning Area.
Proposed Lease Sale 250 includes 14,375 unleased blocks, located from 3 to 230 miles offshore, in the Gulf’s Western, Central and Eastern planning areas in water depths ranging from 9 to more than 11,115 feet (three to 3,400 meters).
Excluded from the lease sale are blocks subject to the Congressional moratorium established by the Gulf of Mexico Energy Security Act of 2006; blocks that are adjacent to or beyond the U.S. Exclusive Economic Zone in the area known as the northern portion of the Eastern Gap; and whole blocks and partial blocks within the current boundary of the Flower Garden Banks National Marine Sanctuary.
According to a tweet by the Bureau of Ocean Energy Management on Tuesday, 27 companies submitted 159 bids on 148 tracts/blocks.
Randall Luthi, president of National Ocean Industries Association, said on Monday, ahead of the sale Mexico Lease Sale 250: “The historic size of tomorrow’s Region-wide Gulf of Mexico lease sale, combined with improving market conditions and a shallow water incentive, may draw more interest from industry than we have seen in recent years.
“Operators are global in nature and will bid where they believe they will get the most ‘bang for their buck’. The results of recent sales in the Mexican side of the Gulf of Mexico demonstrate that the United States cannot tread water by offering the same acreage time and time again without additional incentives.
The good news is that as commodity prices and market conditions have slowly improved, the Trump administration has worked to safely reduce regulatory burden and also incentivize industry investment by offering a 12.5% royalty rate for shallow water leases. We hope these positive factors will be reflected in bidding activity tomorrow.”
The bid reading begins at on Wednesday 9:00 AM Central Time.
Offshore Energy Today staff