Yesterday’s oil and gas lease sales for federal waters in the Gulf of Mexico garnered over $872 million in high bids on 329 tracts covering 1.7 million acres.
The Department of the Interior’s Bureau of Ocean Energy Management (BOEM) offered nearly 40 million acres covering tracts in the Central and Eastern planning areas of the Gulf of Mexico, and opened bids from previously offered acreage in the Western planning area. Yesterday’s lease sales build on the first three sales held under the Obama administration’s Outer Continental Shelf Oil and Gas Leasing Program for 2012-2017 (Five Year Program) that offered more than 60 million acres for development and garnered $1.4 billion in bid revenues.
“While domestic energy production is growing rapidly in the United States, the Central Gulf of Mexico, as demonstrated by today’s lease sale, will continue to be one of the cornerstones of the nation’s energy portfolio,” BOEM Director Tommy P. Beaudreau said in a statement. “The Gulf of Mexico is one of the most productive basins in the world, and the Obama Administration supports the development of our nation’s offshore oil and gas resources in the Gulf of Mexico while protecting the human, marine and coastal environments, and ensuring a fair return to the American people.”
Domestic oil production is currently higher than any time in two decades, natural gas production is at its highest level ever, and renewable electricity generation from wind, solar, and geothermal sources has doubled, BOEM said. Combined with recent declines in oil consumption, foreign oil imports now account for less than 40 percent of the oil consumed in the U.S. – the lowest level since 1988.
Lease Sale 231 for the Central Planning Area attracted $851 million in high bids on 326 blocks covering 1.7 million acres on the U.S. Outer Continental Shelf (OCS) offshore Louisiana, Mississippi and Alabama. A total of 50 offshore energy companies participated in submitting 380 bids.
Lease Sale 225, the first of two lease sales proposed for the Eastern Planning Area under the Five Year Program, is the first sale offering acreage in that area since 2008. The sale encompassed 134 whole or partial unleased blocks covering approximately 465,000 acres 125 miles south of eastern Alabama and western Florida. Though the sale did not receive any bids, continued interest in this area is evidenced by ongoing and planned activity on existing leases from past sales as well as from similar activity on existing leases immediately adjacent to this area within the Gulf’s Central Planning Area. The area will be offered to industry again in 2016 under the current Five Year Offshore Oil and Gas Leasing Program.
In addition to opening bids for these two sales, BOEM opened three pending bids submitted by a company in the August 2013 Western Planning Area Lease Sale 233 for blocks located or partially located within three statute miles of the maritime and continental shelf boundary with Mexico (U.S.-Mexico TransBoundary Area). Approximately $21.3 million in high bids was submitted on three tracts by one company. Leases awarded as a result of these bids will be subject to the terms of the U.S.-Mexico Transboundary Hydrocarbons Agreement, which was approved by Congress in the Bipartisan Budget Act of 2013 and recently signed by the president.
Each bid will go through a strict evaluation process within BOEM to ensure the public receives fair market value before a lease is awarded.