The Minerals Management Service has scheduled its only EasternGulf of Mexico sale in its current five-year leasing plan — andthe first proposed sale in the eastern section of the Gulf in morethan 12 years. Proposed lease sale 181, scheduled December 2001,would include 1,033 blocks covering 5,949 million acres — about8% of the total area in the Eastern Gulf Planning Area.

Participation is expected to be high for a couple of reasons.MMS may not hold another lease sale for that particular area until2012. And then there are the high reserves estimated to be there.MMS estimates the sale area could contain “significant oil and gasresources that are largely unexplored at this point.” MMS estimatesthe resources to be developed could hold as much as 240 MM bbl ofoil and 1.8 Tcf of gas. The entire lease sale area could contain upto 370 MM bbl of oil and 3.2 Tcf of gas.

The proposed lease sale area includes 120 blocks in a narrowstrip in the western portion of the eastern Gulf, beginning about15 miles offshore Alabama. Another 913 blocks are in deeper water,nearer to Louisiana than to Florida. “The deeper water area isimmediately adjacent to the prolific energy area in the CentralGulf of Mexico called Mississippi Canyon,” said MMS, area thatalready has yielded large discoveries by several companies,including Shell, BP and Pioneer Natural Resources Co. (see DailyGPI, Oct. 24, Sept. 28, May 4, Feb. 16).

Several companies told MMS they are particularly interested indeveloping leases near the Mississippi Canyon area, specifically inthe DeSoto Canyon region and the Destin Dome areas, which fallalong the boundary between the central and eastern Gulf. There,water depths are 108 to 10,980 feet.

Because of Florida’s objection to drilling within 100 miles ofits coastline, none of the blocks are within that restrictedregion. However, the region falls close to the disputed Destin Domeregion. There, nine leases remain under development by Chevron,Conoco and Murphy Exploration & Production. The field containspotential reserves of up to 2.6 Tcf, but years after the nineleases were sold and drilled, Florida moved to ban all offshoredrilling within 100 miles of its coastline.

The three exploration partners filed a lawsuit over the Destin Domeleases in July, claiming the federal government has tied theirdevelopment plans into a “proverbial Gordian Knot” because theCommerce Department and the Environmental Protection Agency has frozenthe review process and prevented projects from ever beingapproved. Each agency reviewing the project has said it cannot moveforward without a favorable decision by the other (see Daily GPI, July 25).

Because of the controversy surrounding Florida-relateddevelopment, MMS will hold two of its four public hearings nextmonth in Florida on the Draft Environmental Impact Statementconcerning Sale 181. The hearings are set for Jan. 23 in NewOrleans, Mobile AL, Pensacola, FL and Tallahassee, FL. Followingthe hearings, a final EIS would be issued in June, and the noticeof sale would be posted in July 2001. A final notice for the salewould then be released in October 2001, with the sale three monthslater. All of the dates could change depending on the outcome ofthe hearings. To review the Draft EIS, or for information on thepublic hearings, contact MMS’s Public Information Office in NewOrleans at (800) 200-GULF.

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