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FILE PHOTO: An oil and gas drilling platform stands offshore in Alabama, October 5, 2013. REUTERS/Steve Nesius/File Photo

FILE PHOTO: An oil and gas drilling platform stands offshore in Alabama, October 5, 2013. REUTERS/Steve Nesius/File Photo

Gulf of Mexico Lease Sale Nets $382 Million, Most Since 2015

Reuters
Total Views: 1261
December 21, 2023
Reuters

Dec 20 (Reuters) – A Biden administration auction of Gulf of Mexico drilling rights raised $382 million on Wednesday as oil companies claimed offshore acreage for what is set to be the last time until 2025.

The auction total was the highest of any federal offshore oil and gas lease sale since 2015, according to a Reuters tally.

Shell, Hess, Anadarko, BP, Chevron, Repsol and Equinor were among the 26 companies that participated in the sale. 

Anadarko had the auction’s highest bid of more than $25 million for a block in the deepwater Mississippi Canyon area, according to an online broadcast of the sale by the U.S. Bureau of Ocean Energy Management (BOEM).

The sale will likely be the last opportunity for oil and gas companies to bid on Gulf of Mexico acreage until 2025, according to the administration’s five year schedule, which includes a historically low number of planned lease auctions.

An oil and gas industry group said the sale results underscored the Gulf of Mexico’s role as an economic engine and called on Congress to require more leasing.

“The U.S. offshore oil and gas industry is stepping up and making the investments vital to enhance our energy, economic, and national security for decades to come,” National Ocean Industries Association President Erik Milito said in a statement.

The sale of more than 72.7 million acres on the Outer Continental Shelf included 6 million acres that Interior Department officials had tried to withdraw months ago to protect the habitat of the Rice’s whale.

A federal judge ordered that the sale be expanded after oil and gas companies sued.

An environmental group said the oil industry was prioritizing profits over the environment.

“Perpetual leasing, new fossil fuel export projects and oil spills are creating a hellish situation for marine life and Gulf communities,” Center for Biological Diversity’s oceans legal director, Kristen Monsell, said in a statement.

About 2.4% of the acreage offered received bids, according to a document of pre-sale statistics posted on BOEM’s web site. More than three-quarters of the tracts that received bids were in water more than 800 meters (2,625 feet) deep.

President Joe Biden has sought to limit new oil and gas leasing as part of his climate change agenda, but a new federal law made offshore wind leasing contingent on offering oil and gas drilling rights. 

The Biden administration sees offshore wind development as important to decarbonizing the U.S. power sector. 

The sale comes days after the United States and nearly 200 other nations agreed to begin reducing consumption of fossil fuels to avert the worst impacts of climate change.

(Reporting by Nichola Groom; Editing by Nick Zieminski and David Gregorio)

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