Gulf of Mexico Lease Sale Yields $274 Million in High Bids

A Maersk semisubmersible drilling rig in the Gulf of Mexico. Credit: Statoil
File photo. Credit: Statoil

The U.S. Department of the Interior has announced that Wednesday’s lease sale for all available oil and gas parcels in the central Gulf of Mexico yielded over $274 million in high bids.

U.S. Secretary of the Interior Ryan Zinke said Lease Sale 247 garnered $274,797,434 in high bids for 163 tracts covering 913,542 acres in the Central Planning Area of the Outer Continental Shelf offshore Louisiana, Mississippi, and Alabama. A total of 28 offshore energy companies submitted 189 bids. The sum of all bids received totaled $315,303,884.

Secretary Zinke said the sale reflects strong market conditions and industry interest in Federal offshore oil and gas resources under the new Administration.

“Today’s strong sale reflects continued industry optimism and interest in the Gulf’s Outer Continental Shelf, a keystone of the Nation’s offshore oil and gas resources and a vital part of President Trump’s plan to make the United States energy independent,” Secretary Zinke said. “In cooperation with the Gulf offshore industry, we are committed to responsible energy development that spurs economic opportunities, generates jobs for American workers, and produces revenues for local, state, and federal partners. Expanded Gulf production is critical to America’s economic and energy security, and will play a greater role as we move to break our dependence on foreign oil and strengthen the Nation’s energy independence.”

Wednesday’s sale included all unleased and non-protected areas in the Central Gulf of Mexico Planning Area. The two previous lease sales in the Central Planning Area yielded $156 million and $538 million in March 2016 and March 2015, respectively. 

The sale is the final to be held in the Gulf of Mexico under the current Outer Continental Shelf Oil and Gas Leasing Program for 2012-2017 (Five Year Program). The first eleven sales in the Five Year Program offered nearly 73 million acres for development and garnered more than $3 billion in bid revenues.

For Lease Sale 247, Department’s Bureau of Ocean Energy Management (BOEM) offered 9,118 unleased blocks, covering 48 million acres, located from three to 230 nautical miles offshore Louisiana, Mississippi, and Alabama, in water depths ranging from nine to more than 11,115 feet (three to 3,400 meters).

“The Gulf of Mexico is one of the most productive oil and gas basins in the world, and its mature offshore and onshore infrastructure supports safe and responsible development of our domestic energy resources,” Secretary Zinke said.

BOEM estimates the lease sale could result in the production of 460 to 890 million barrels of oil, and 1.9 trillion cubic feet to 3.9 trillion cubic feet of natural gas.

Earlier this month Secretary Zinke announced that the Department will offer 73 million acres offshore Texas, Louisiana, Mississippi, Alabama, and Florida for oil and gas exploration and development. The proposed region-wide lease sale scheduled for August 16, 2017 would include all available unleased areas in federal waters of the Gulf of Mexico.

“Opening more federal lands and waters to oil and gas drilling is a pillar of President Trump’s plan to make the United States energy independent,” Secretary Zinke said. “The Gulf is a vital part of that strategy to spur economic opportunities for industry, states, and local communities, to create jobs and home-grown energy and to reduce our dependence on foreign oil.”

As of March 1, 2017, about 16.9 million acres on the U.S. OCS are under lease for oil and gas development (3,194 active leases) and 4.6 million of those acres (929 leases) are producing oil and natural gas. More than 97 percent of the leases are in the Gulf of Mexico; about 3 percent are on the OCS off California and Alaska.