Interior announces regionwide oil and gas lease sale for Gulf

The Interior Department and Bureau of Ocean Energy Management (BOEM) announced that BOEM will offer 78 million acres for a regionwide lease sale scheduled for March 20. The sale would include all available unleased areas in federal waters of the Gulf of Mexico.

Lease Sale 252, scheduled to be livestreamed from New Orleans, will be the fourth offshore sale under the 2017-2022 National Outer Continental Shelf Oil and Gas Leasing Program (National OCS Program). 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 will be held each year and include all available blocks in the combined Western, Central, and Eastern Gulf of Mexico Planning Areas.

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 9′ to more than 11,115′ (three to 3,400 meters). The following areas are excluded from the lease sale: 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 Gulf of Mexico OCS, covering about 160 million acres, is estimated to contain about 48 billion bbls of undiscovered technically recoverable oil and 141 trillion cubic feet of undiscovered technically recoverable gas.

Revenues received from OCS leases (including high bids, rental payments and royalty payments) are directed to the U.S. Treasury, certain Gulf Coast states (Texas, Louisiana, Mississippi, Alabama), the Land and Water Conservation Fund and the Historic Preservation Fund.

“Developing our nation’s offshore energy resources is vital to our economy and energy security,” acting BOEM director Dr. Walter Cruickshank said in a statement announcing the lease sale. “Our staff is committed to ensuring offshore development is done in an environmentally responsible manner.”

Leases resulting from this proposed sale would 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.

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

All terms and conditions for Gulf of Mexico Region-wide Sale 252 are detailed in the Final Notice of Sale information package. Copies of the maps can be requested from the Gulf of Mexico Region’s Public Information Unit at 1201 Elmwood Park Boulevard, New Orleans, LA 70123, or at 800-200-GULF (4853). The Notice of Availability was available Feb. 14, 2019, for inspection was published in the Federal Register Feb. 15, 2019.

About the author

Ken Hocke

Ken Hocke has been the senior editor of WorkBoat since 1999. He was the associate editor of WorkBoat from 1997 to 1999. Prior to that, he was the editor of the Daily Shipping Guide, a transportation daily in New Orleans. He has written for other publications including The Times-Picayune. He graduated from Louisiana State University with an arts and sciences degree, with a concentration in English, in 1978.

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