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Gulf of Mexico Oil and Gas Lease Sale Rakes in $263 Million

Mike Schuler
Total Views: 1487
March 29, 2023

The U.S. Bureau of Ocean Energy Management (BOEM) has conducted Gulf of Mexico Lease Sale 259, which resulted in $263,801,783 in high bids for 313 tracts spanning 1.6 million acres in the federal waters of the Gulf of Mexico.

The sale marks the highest grossing U.S. government oil and gas lease sale since March 2015.

A total of 32 companies participated in Lease Sale 259, collectively submitting bids worth $309,798,397. Lease Sale 259 offered approximately 13,600 unleased blocks, totaling around 73 million acres, in the Western, Central, and Eastern Planning Areas of the Gulf.

To address potential environmental concerns, leases awarded through this sale will incorporate stipulations aimed at mitigating any adverse effects on protected species and preventing conflicts with other ocean uses in the region.

The lease sale is the third oil and gas sales held by the Biden Administration after he had initially paused oil and gas leasing as part of his administration’s effort to combat climate change. A judge’s ruling in 2021 forced lease sales to continue, leading to a November 2021 sale in the Gulf of Mexico that attracted $189 million in high bids. A few months later, a judge nullified the results of that sale, ruling that the Biden Administration failed to properly account for the auction’s impact on climate change. However, the Biden Administration eventually reinstated the results as mandated by the Inflation Reduction Act, which also required BOEM to hold a lease sale in Cook Inlet, Alaska and two in the Gulf of Mexico, including Lease Sale 259 and a second one (261) tentatively scheduled to be held in September 2023.

Two previous high-grossing lease sales were held in 2019, 252 and 253, which attracted $244 million and $159 million in high bids, respectively, but 259’s final amount is the highest since a March 2015 sale in the Gulf of Mexico generated $539 million in high bids.

Revenues generated from offshore oil and gas leases, which include high bids, rental payments, and royalty payments, are allocated to the U.S. Treasury, certain Gulf Coast states (Texas, Louisiana, Mississippi, and Alabama), local governments, the Land and Water Conservation Fund, and the Historic Preservation Fund.

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