Photo: Illustration. Source: BOEM

Gulf of Mexico lease sale attracts over $120 million in high bids

The U.S. government agency Bureau of Ocean Energy Management (BOEM) has held an oil and gas lease sale for acreage in the Gulf of Mexico, the last one under the Trump administration, yielding more than $120 million in high bids.

Gulf of Mexico Lease Sale 256 - BOEM
Gulf of Mexico Lease Sale 256; Source: BOEM

In support of President Donald J. Trump’s America-First Offshore Energy Strategy, Deputy Secretary of the Interior Kate MacGregor and the Bureau of Ocean Management’s Acting Director Walter Cruickshank on Wednesday announced that region-wide Gulf of Mexico Lease Sale 256 generated $120,868,274 in high bids for 93 tracts covering approximately 79 million acres in federal waters of the Gulf of Mexico.

A total of 23 companies participated in the lease sale, submitting $135,558,336 in total bids, according to BOEM.

Lease Sale 256 included 14,862 unleased blocks located from three to 231 miles offshore, in the Gulf’s Western, Central and Eastern Planning Areas in water depths ranging from nine to more than 11,115 feet (three to 3,400 meters).

“The continuation of safe and reliable oil and gas from the Gulf of Mexico is crucial for America’s economy and energy portfolio”, said MacGregor.

“Lease sales have been held in Gulf federal waters since 1954, and the sustained presence of large deposits of hydrocarbons in these waters will continue to draw the interest of the industry for decades to come”.

“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”, MacGregor concluded.

Last year was a record year for American offshore oil production, at 596.9 million barrels, or 15 per cent of domestic oil production, and $5.7 billion in direct revenues to the government.

Additionally, offshore oil and gas supported 275,000 total domestic jobs and $60 billion total economic contributions in the U.S.

“The Gulf of Mexico is one of the most productive basins in the world, and the development of its resources is essential to our national security”, said Cruickshank.

Lease Sale 256, which was live-streamed from New Orleans, was the seventh offshore sale held under the 2017-2022 National Outer Continental Shelf Oil and Gas Leasing Program.

See the list of blocks receiving bids by company here.

Under this program, 10 region-wide lease sales are scheduled for the Gulf, where resource potential and industry interest are high, and oil and gas infrastructure is well established.

Two Gulf lease sales are scheduled to be held each year and include all available blocks in the combined Western, Central and Eastern Gulf of Mexico Planning Areas.

As previously reported, BOEM is now also planning for the first Gulf of Mexico oil and gas lease sale for 2021, which outlines all available areas in the region-wide auction.

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Under this lease sale, BOEM will offer approximately 78.2 million acres for a region-wide Gulf of Mexico lease sale scheduled for March 2021.