US nets $700 million for Gulf of Mexico leases

The US Department of the Interior's Minerals Management Service said it accepted high bids valued at $700 million and awarded 328 leases to the successful high bidders who participated in the Central Gulf of Mexico Oil and Gas Lease Sale 208.

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, July 14 -- The US Department of the Interior's Minerals Management Service said it accepted high bids valued at $700 million and awarded 328 leases to the successful high bidders who participated in the Central Gulf of Mexico Oil and Gas Lease Sale 208.

MMS said funds from the total high bids will be distributed to the general fund of the US Treasury, shared with the affected states, and set aside for special uses that benefit all fifty states.

It said the leases were awarded following the completion of an extensive, two-phase bid evaluation process to ensure that the Federal government receives a fair monetary return for the public mineral resources it makes available.

Seventy companies submitted 476 bids on 348 tracts in the sale, held on Mar. 18. The total for high bids submitted on all tracts was $703,048,523. Using the bid evaluation process, MMS rejected high bids totaling $12,673,983 on 19 tracts as insufficient for fair market value.

In addition, MMS said that a successful high bidder forfeited the lease and the 1/5th bonus which was submitted with the bid. As a result, $52,836.40 of the $264,182 bid on the forfeited tract has been collected.

The highest bid accepted on a tract was $ 65,611,235 submitted by Shell Gulf of Mexico Inc. for Mississippi Canyon Block 721. This tract lies in 800-1,600 m of water and received two bids.

The top five companies with the highest number of accepted high bids for Sale 208 were Shell Gulf of Mexico Inc., 39 for $154 million; BHP Billiton Petroleum (Deepwater) Inc., 28 for $50 million; BP Exploration & Production Inc., 25 for $77 million; Ecopetrol America Inc., 22 for $19 million; and Noble Energy Inc., 22 for $54 million.

Contact Eric Watkins at hippalus@yahoo.com.

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