Central Gulf sale to offer first blocks in Western Gap since 1997

Fifty-three partial or entire lease blocks in the Western Gap area were added to the proposed notice for Central Gulf of Mexico Lease Sale 178, the US Minerals Management Service announced. A June treaty between the US and Mexico drew a dividing line through the gap, freeing the MMS to resume lease offerings in the region.

WASHINGTON�The US Minerals Management Service will include blocks in the Western Gap of the Gulf of Mexico in a lease sale next year for the first time since 1997.

MMS officials added 53 partial or entire blocks from the Western Gap area to the proposed notice for Central Gulf of Mexico Lease Sale 178, scheduled March 28 in New Orleans.

MMS first began offering leases in the Western Gap, which falls just beyond the US exclusive economic zone, in 1983, but suspended offering the blocks in 1997 following complaints from Mexico, which claimed that the leases were premature before signing a treaty to formally divide the gap area.

A treaty between the US and Mexico last June drew a dividing line through the gap, freeing the MMS to resume lease offerings in the region. Under the treaty, Mexico was awarded control of 62% of the region, or 3,179 square nautical miles, while the US has 38%, or 1,913 nautical miles. The two governments also agreed on a 1.4-mile wide buffer zone along the border, which will remain free from development by either side for 10 years.

Lease Sale 178 will include 4,366 unleased blocks covering 23.07 million acres. Primary lease terms will include a 5-year term for the 1,362 blocks in less than 400 m of water; 8 years for 141 blocks in 400-799 m; and 10 years for blocks in 800 m of water or greater.

Blocks eligible for royalty relief include 1,290 blocks in less than 200 m of water, 406 blocks in 800-1,599 m of water, and 2,457 blocks in 1,600 m of water or greater.

The size of the zone was statistically calculated by the US and Mexico to encompass essentially all potential trans-boundary deposits.

Although no wells have yet been drilled in the immediate vicinity of the Western Gap, many companies have picked up leases nearby and are actively studying the region for prospective deposits.

According to Robert Hobbs, vice-president of interpretation technologies at seismic data and interpretation specialists Veritas DGC, most of the leasing has aimed at subsalt plays just north and east of the western gap. "Companies have been chasing structural plays up underneath these salt canopies southwest from some key discoveries up to the northeast, like Crazy Horse and Mad Dog, along the Compressional Fold Belt trend." said Hobbs. "The idea is to chase that play farther up underneath these extensive salt sheets in the western gap area," where the target would be upper Tertiary reservoirs.

"I think interest in the Western Gap is going to be as strong as it has been in other deepwater areas out there like Walker Ridge and Keathley Canyon," said Hobbs. "There's nothing to say that the geological trends these companies are chasing don't extend into the western gap, and we think they do."

A second potential play in the Western Gap region is basin floor sand fans sitting in mini-basins created by the squeezing movement of the salt.

The northern portion of the Western Gap contains a portion of the Sigsbee Escarpment, a steep undersea slope marking the edge of the US continental shelf as well as the southern extension of the salt canopy.

While the portion of the Sigsbee Escarpment in the Western Gap falls mostly on the US side of the new treaty line, a section of it is on the Mexican side. South of the Sigsbee Escarpment, the gulf floor drops to an abyssal plain at around 3,000 m.

Little is known about the hydrocarbon prospectivity of the abyssal plain region, or any other possible salt formations on the Mexican portion of the Western Gap.

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