U.S. to offer 70 million acres in Gulf of Mexico lease sale in March 2019

The U.S. authorities have proposed to offer 78 million acres in a Gulf of Mexico lease sale scheduled for March 2019. The sale would include all available unleased areas in federal waters of the Gulf of Mexico.

U.S. to offer 70 million acres in Gulf of Mexico lease sale in March 2019
A Gulf of Mexico oil platform (Image source: U.S. Department of the Interior

The Lease Sale 252 will include approximately 14,696 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).

Excluded from the lease sale are: blocks subject to the congressional moratorium established by the Gulf of Mexico Energy Security Act of 2006; blocks 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 boundaries of the Flower Garden Banks National Marine Sanctuary.

“The development of our offshore energy resources is a major pillar of this Administration’s energy strategy,” said Deputy Secretary Bernhardt. “We all benefit from a strong offshore energy program, which provides thousands of well-paying jobs, as well as affordable and reliable energy Americans need to heat homes, fuel our cars, and power our economy.”

As previously reported, U.S. Lease Sale 251 held in August 2018 attracted $178 million in high bids for 144 tracts covering 801,288 acres in federal waters of the U.S. Gulf of Mexico as part of region-wide leased sale held on Wednesday. The Department of the Interior had offered 14575 blocks, of which 144 attracted bids.

Slow recovery

Commenting on the Lease Sale 251, National Ocean Industries Association (NOIA) President Randall Luthi said:”While not a barn burner, Lease Sale 251 tops the previous Gulf sale in terms of increased participation, increased competition for offerings, and bid amounts.”

He said the bidding activity demonstrated both continued interest in deepwater tracts and renewed interest in shallow water tracts, and that the sale showed signs of slow recovery of the offshore energy industry:”…the future is bright, but shifting out of reverse takes time.”

The Gulf of Mexico OCS, covering about 160 million acres, is estimated to contain about 48 billion barrels of undiscovered technically recoverable oil and 141 trillion cubic feet of undiscovered technically recoverable gas.

The Lease Sale 252, scheduled to be live-streamed from New Orleans in March, will be the fourth offshore sale under the 2017-2022 Outer Continental Shelf Oil and Gas Leasing Program (2017-2022 OCS Program). Under this program, ten region-wide lease sales are scheduled for the Gulf. 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.