U.S. pulls in over $93 million in high bids from Gulf of Mexico sale

The U.S. Bureau of Ocean Energy Management (BOEM) has generated over $93 million in high bids for 71 tracts in Federal waters of the Gulf of Mexico.

Gulf of Mexico Lease Sale 254 map; Image: BOEM

BOEM said that the region-wide Gulf of Mexico Lease Sale 254 generated $93,083,453 in high bids covering 397,285 acres.

According to BOEM, a total of 22 companies participated in the lease sale, submitting over $108 million in total bids.

Lease Sale 254 included 14,594 unleased blocks located from three to 231 miles offshore, in the Gulf’s Western, Central and Eastern Planning Areas in water depths ranging from 3 – 3,400 meters.

The Bureau noted that blocks subject to the congressional moratorium established by the Gulf of Mexico Security Act of 2006, blocks that are adjacent to or beyond the U.S. EEZ in the area known as the northern portion of the Eastern Gap, and whole blocks and partial blocks within the boundaries of the Flower Garden Banks National Marine Sanctuary were excluded from the lease sale.

BOEM’s Gulf of Mexico office regional director, Mike Celata, said: “The development of oil and gas assets in the GoM is a highlight of the Outer Continental Shelf (OCS). The continued presence of large deposits of hydrocarbons in the region will draw the interest of the industry for decades to come.

Revenues received from OCS leases are directed to the U.S. Treasury, certain Gulf Coast states – Texas, Louisiana, Mississippi, and Alabama – and local governments, the Land and Water Conservation Fund, and the Historic Preservation Fund.

Leases resulting from this sale will include stipulations to protect biologically sensitive resources, mitigate potential adverse effects on protected species, and avoid potential conflicts associated with oil and gas development in the region.

BOEM also included appropriate fiscal terms that take into account market conditions and ensure taxpayers receive fair market value for use of the OCS. In recognition of current hydrocarbon price conditions and the marginal nature of the remaining Gulf of Mexico shallow water resources, fiscal terms include a 12.5 percent royalty rate for leases in less than 200 meters of water depth and a royalty rate of 18.75 percent for all other leases issued under the sale.

Lease Sale 254 was the sixth offshore sale held under the 2017-2022 National Outer Continental Shelf Oil and Gas Leasing Program.

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

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