Western Gulf of Mexico (GOM) Lease Sale 248, which offered 23.8 million acres offshore Texas for oil and natural gas exploration and development, attracted only a handful of bids Wednesday, and -- unlike several other recent lease sales -- no interruptions by protesters, thanks to a Bureau of Ocean Energy Management (BOEM) decision to broadcast the event live on the internet.
Just 24 of the 4,399 blocks offered were bid on by a total of three companies for a total of $18.1 million in winning bids, BOEM said following the lease sale. All of the bids submitted were also high bids for their respective blocks, according to BOEM.
BHP Billiton Petroleum (Deepwater) Inc. submitted 12 bids for nearly $10 million; BP Exploration & Production Inc. submitted 10 bids for $6.32 million; and ExxonMobil Corp. submitted two bids totaling $1.75 million. Bids were submitted for blocks in East Breaks, Alaminos Canyon and Garden Banks.
The high bid on any block came from ExxonMobil, which bid $1.12 million for NG15-01 East Breaks. At $195.14/acre, it was also the highest bid per acre.
Lease Sale 248 included all available unleased areas in the Western GOM Planning Area, with all blocks located from nine to 250 nautical miles offshore, in water depths ranging from 16 to more than 10,975 feet (five to 3,340 meters). BOEM estimated a range of economically recoverable hydrocarbons to be discovered and produced of 116-200 million barrels of oil and 538-938 Bcf of natural gas.
"The relatively modest results of today's Western Gulf of Mexico lease sale are indicative of the current market conditions and regulatory environment," said National Ocean Industries Association President Randall Luthi.
Last month, BOEM announced that Lease Sale 248 would be the first federal offshore oil and gas auction broadcast live on the internet (see Daily GPI, July 25). The bid opening in New Orleans, was offered in real-time to the public exclusively on BOEM's website via internet broadcast. BOEM said it expected to deliver "pertinent bid information immediately to a much broader national and international audience. Through this approach, BOEM aims to promote greater government efficiency and transparency, eliminating the need for the public to physically attend the bid reading at the Mercedes-Benz Superdome."
The internet-only lease sale appeared to stymie anti-drilling protesters, who have marred several recent BOEM and Bureau of Land Management (BLM) lease sales (see Daily GPI, Feb. 12; March 9). Protesters demonstrating at a BOEM office in New Orleans Tuesday weren't able to delay the lease sale Wednesday.
"It's hard to miss the irony of activists traveling to such protests in gasoline fueled vehicles, or the fact that oil and natural gas provide low cost fuel to the income disadvantaged populations that these activists claim to protect," Luthi said. "Should the 'keep it in the ground' movement stop federal leasing, we can all expect to pay far more for our basic energy needs and we will witness the loss of thousands of jobs in the Gulf of Mexico region. Billions of dollars to state and federal treasuries will also be left in the ground."
In March, a group of protesters attempted to disrupt two GOM lease sales (see Daily GPI, March 23). At the time, Luthi said that lease sale "teetered on the verge of being a circus." In January, BLM postponed an oil/gas lease sale in Billings, MT, the third time since November the agency delayed an auction (see Daily GPI, Jan. 19, Dec. 7, 2015; Nov. 17, 2015). And in July, BLM postponed an oil and gas lease sale of Permian Basin property, saying it wanted to provide adequate public notice of the sale, but environmental groups claimed credit for forcing the change (see Daily GPI, July 18).
Lease Sale 248 was the eleventh offshore sale in the GOM and the final sale for the Western Planning Area, under the Obama administration's Outer Continental Shelf Oil and Gas Leasing Program for 2012-2017 (see Daily GPI, June 29, 2012). The first ten sales in the five-year program offered more than 60 million acres and netted nearly $3 billion, according to BOEM.
Leases issued from the sale will be the first for which BOEM will accept requests for extended initial periods, while confirming if the lessee has earned such extension, a duty previously performed by the Bureau of Safety and Environmental Enforcement.