Record low take for Western GOM lease sale

The Bureau of Ocean Energy Management’s  Western Gulf of Mexico lease sale took in $18 million in high bids for 24 tracts covering 138,240 acres, a record low take. Yesterday’s sale in New Orleans was the first to be broadcast live on the internet.

Last year’s sale in the Western Gulf was responsible for the previous low, netting $22.7 million from five companies for 33 tracts. In 2014, a similar sale drew nearly $110 million from 14 companies for 81 tracts.

On Wednesday, more than 23 million acres were offered offshore Texas for oil and gas exploration in Lease Sale 248. Three offshore energy companies participated in the sale — Exxon Mobil, BHP Billiton, and BP — and each of the 24 tracts sold received only a single offer.

“Though this sale reflects today’s market conditions and industry’s current development strategy, the bidding confirms that there is continued interest in the deepwater areas of the Gulf,” said Abigail Ross Hopper, BOEM director.

After protesters disrupted a March lease sale held at the New Orleans Superdome, BOEM announced that this sale would be conducted online, marking the first time the agency has broadcast an oil and gas auction on the internet.

BOEM said this approach allows it to deliver “pertinent bid information immediately to a much broader national and international audience” and promote “greater government efficiency and transparency.”

The Associated Press reported that four people protesting the sale on environmental grounds were arrested Tuesday outside of the BOEM office.

In a statement, Randall Luthi, president of offshore trade group the National Ocean Industries Association, praised the companies that participated in the sale and condemned the protesters.

“Despite these challenging circumstances, the companies that participated in today’s sale are investing millions of dollars in the future of America’s energy and economic security with no guarantee of success or financial return,” Luthi said. “Should the ‘keep it in the ground’ movement stop federal leasing, we can all expect to pay far more for our basic energy needs and we will witness the loss of thousands of jobs in the Gulf of Mexico region.”

BOEM will evaluate the bids for 90 days before leases are awarded.

An August 2016 map showing BOEM's Gulf of Mexico planning areas.

An August 2016 BOEM map showing the agency’s Gulf of Mexico planning areas.

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Ashley Herriman

Ashley Herriman is WorkBoat's online editor.

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