Editorial: Of auctions and interest
The US Bureau of Ocean Energy Management (BOEM) on Nov. 7, 2025, released the final notice for a Gulf of Mexico (GoM) lease sale to be held Dec. 10. The sale would be the first of 30 required between now and 2040 as part of the Trump administration’s taxation and spending law. The first of six lease sales over the same period in Alaska’s Cook Inlet was also announced.
The GoM sale will include about 80 million acres, roughly half of the Gulf’s US offshore continental shelf (OCS).
BOEM set a 12.5% royalty rate—the lowest rate permitted by statute—for both shallow and deepwater leases. The Trump administration pegs US Gulf Coast OCS reserves at 29.59 billion bbl of undiscovered, technically recoverable oil, and 54.84 tcf of natural gas.
BOEM acting director Matt Giacona described the agency’s actions as “moving forward with a predictable, congressionally mandated leasing schedule that will support offshore oil and gas development for decades to come.”
Predictable is certainly the case. Following the Dec. 10 sale, they’ll be held every March and August through 2039, and then again in March 2040. Cook Inlet sales will be held each March in the years designated.
Congressionally mandated is also true. How much support they’ll provide is open to question.
The last US Gulf lease sale, Lease Sale 261, held Dec. 20, 2023, resulted in bids on 311 tracts covering 1.7 million acres and included lease blocks that previously had been excluded due to potential impacts to the Rice’s whale population. A total of 13,482 blocks covering 72.7 million acres had been offered, meaning roughly 2% of the resources made available received interest.
Crude oil prices were higher—West Texas Intermediate spot prices were $73.87/bbl that day versus $60.94/bbl as of Nov. 11, 2025—and US commercial inventories were within 10 million bbl of the same levels. The US was also a net exporter of roughly 3 million b/d of crude oil and refined products in each of the timings under discussion.
The deepwater royalty rate for the last sale was 18.75%, so maybe that will lure a few more buyers to the table. But the participation rates described above are not an anomaly. They were much the same (or lower) in Lease Sale 259, held March 2023, and November 2021’s Lease Sale 257.
Cook Inlet
The Cook Inlet sale, to be held Mar. 4, 2026, will be the first for that area in more than 3 years and makes about 1 million acres available for leasing. It is the first of six, to be scheduled annually from 2026 to 2028, and again from 2030 to 2032.
On Dec. 30, 2022, as directed by the Inflation Reduction Act passed earlier that year, BOEM held Cook Inlet OCS Oil & Gas Lease Sale 258. The reading of the bids was conducted via livestream. One bid was received on one block. The bid, in the amount of $63,983, was submitted by Hilcorp Alaska LLC. More than 958,000 acres were on offer. The lot awarded comprised 5,691 acres.
When the time to bid in the new auctions comes, the operators, as is their right and wont, will do whatever’s in their best business interests. This will be guided by their perception of the global market. To the very limited degree the current administration can affect this, it will likely attempt to do so; free markets seeming to be an inconvenience to large parts of its agenda.
Only time will tell if this approach is effective or performative.