Industry barely touches Gulf of Mexico leases

Thirteen companies submitted bids for 116 of 3,873 blocks offered in the Nov. 28 Western Gulf of Mexico Lease Sale 229 in New Orleans.

The federal government offered 20.75 million acres or all unleased areas in the Western Gulf of Mexico planning area, but the industry bid on slightly more than 3% of the area.

Seventy of the tracts that drew bids are in 800 to 1,600 m of water, and another 35 are in 1,600 m of water or more. High bids totaled $133.7 million out of a total $157.6 million exposed.

East Breaks Block 546 drew the sale’s highest bid of $17.2 million by Chevron USA Inc. Second was Chevron’s $12.5 million bid for East Breaks Block 545. Both tracts drew three bids, the most for any tracts in the sale.

Submitting the most high bids were ConocoPhillips 62, Chevron 28, BHP Billiton Petroleum (Deepwater) Inc. 10, ExxonMobil Corp. 4, Apache Corp. and Tana Exploration Co. LLC 3 each, and 1 each for Arena Energy LP, Castex Offshore Inc., Plains Exploration & Production Co., and Walter Oil & Gas Corp.

LLOG Exploration Offshore LLC and Northstar Offshore Group LLC made a single high bid each, and Anadarko US Offshore Corp. lodged two failed bids.

Interior Sec. Ken Salazar said Sale 229 represented the Obama administration’s “comprehensive, all-of-the-above energy strategy, expanding domestic production, reducing our dependence on foreign oil, and supporting jobs.” The sale is the first under the administration’s 2012-17 Outer Continental Shelf Oil and Gas Leasing Program.

But US Sen. David Vitter, R-Metairie, La., noted that the sale was the year’s second and the third since the 2010 drilling moratorium enacted after the BP oil spill, whereas the previous 5-year lease sale plan that Obama withdrew would have provided at least 10 lease sales in the same period.

The administration said Sale 229 “included all of the offshore areas with the highest conventional resource potential.” But the National Ocean Industries Association said it would like to see other areas opened, including the US east and west coasts.

Randall Luthi, NOIA president, said, “By restricting activity to the same 15% of the Outer Continental Shelf that the industry has been picking over for decades, the administration is ensuring that our offshore energy resources are being underdeveloped. We are all losing as a result. A true ‘all-of-the-above’ energy policy would include opening up access to new offshore areas for exploration and development of oil and natural gas.”

The next Gulf of Mexico lease sale, for the Central Gulf of Mexico, will take place on Mar. 20, 2013, making 38 million acres available offshore Louisiana, Mississippi, and Alabama.

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