The Interior Department’s Bureau of Ocean Energy Management (BOEM) this week awarded 153 tracts to companies that bid in March to explore for oil and natural gas in the Gulf of Mexico (GOM), but 10 high bids were rejected.
Central Planning Area Lease Sale 247 offered 9,118 unleased blocks, covering 48 million acres. The auction attracted two high bids for more than $20 million and four others for $10 million-plus.
The 10 rejected high bids totaled close to $10.85 million and covered more than 56,365 acres. “The value of those bids was insufficient to provide the public with fair market value for the tracts,” BOEM said. The tracts are to be re-offered in August in Lease Sale 249.
In the March sale, 28 producers participated, submitting 189 bids on 163 tracts offshore Louisiana, Mississippi and Alabama in the 12th and final Outer Continental Shelf lease sale of the 2012-2017 program.
BOEM received a total of $274.797 million in high bids that covering 913,542 acres. Of the tracts receiving bids, 22 were in water depths less than 200 meters and 141 were in water depths of more than 200 meters.
The highest bid accepted of $24.0567 million was submitted by Shell Offshore Inc. for Atwater Valley 64. The tract receiving the most bids was Garden Banks 1006 with five bids.
BOEM’s twin agency, the Bureau of Safety and Environmental Enforcement (BSEE), said oil production from submerged federal lands in the Outer Continental Shelf (OCS) accounted for 72% of all oil production from federal lands last year. Natural gas production from the OCS represented 27% of all gas produced on federal lands.
In 2016, 1.25 Tcf of natural gas and 592.5 million bbl of oil were produced from the three U.S. offshore regions, Alaska, the GOM and the Pacific Ocean, federal officials said.
More than 85 oil and gas companies operate on federal submerged lands, BSEE noted. An estimated 2,100-plus offshore production platforms and about 26,800 miles of pipelines transport oil and gas to shore.