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Central GOM Lease Sale Attracts $1.6B in Bids
Dozens of companies cast 407 bids totaling $1.6 billion for 320 blocks covering more than 1.7 million acres offshore Louisiana, Mississippi and Alabama for oil and natural gas exploration and development in the Central Gulf of Mexico Lease Sale 227, held in New Orleans Wednesday.
High bids in the lease sale totaled $1.21 billion, according to Bureau of Ocean Energy Management (BOEM) Director Tommy Beaudreau. The highest bid — $81.8 million for Walker Ridge block 271 — was submitted jointly by Statoil Gulf of Mexico LLC and Samson Offshore LLC.
“Today’s activity serves as a reminder that the Gulf of Mexico, and in particular the deepwater Gulf, will continue to play a major role in the future of energy development in this country,” Beaudreau said following the lease sale. “The Gulf of Mexico remains one of the cornerstones of the United States’ domestic energy portfolio, and it will stay that way for many, many years to come…I don’t think there’s any other way to characterize today’s sale than an extremely successful and extremely robust sale.”
“We’re delighted, of course, with the level of bidding,” said BOEM Regional Director John Rodi. “Certainly, the amount of the high bids and the amount of all bids are significant indications of continued interest in the Gulf of Mexico, particularly in the deepwater area, and we believe that that interest is spurred, of course, by…drilling activity that has happened recently, as well as new seismic information and interest based on that new drilling. That’s really a great sign of a good future, and the present and future value of the Gulf of Mexico.”
The Interior Department had offered 38.6 million offshore acres with the potential for almost 4 Tcf of natural gas production and nearly 1 billion bbl of oil production (see Daily GPI, Feb. 8). The lease sale encompassed 7,299 blocks located from three to about 230 miles offshore, in water depths ranging from nine feet to more than 11,115 feet.
Bidders in the lease sale included some of the biggest names in the industry, including ConocoPhillips, Chevron USA, ExxonMobil Corp. and 49 others, but not BP plc, according to BOEM. The Department of Interior had said BP, which is suspended from obtaining new federal contracts, would be allowed to bid on Sale 227, but it would be disqualified if it was the highest bidder and remained under suspension when the lease was awarded (see Daily GPI, March 18).
The Central GOM sale follows two sales held in 2012. The Western Gulf Lease Sale 229, held in November, received high bids on tracts covering about 650,000 acres, garnering nearly $134 million in high bids (see Daily GPI, Nov. 29, 2012). And the Central Gulf Lease Sale 216/222, held in June, attracted more than $1.7 billion in high bids on more than 2.4 million acres (see Daily GPI, June 21).
Interior Secretary Ken Salazar opened the sale Wednesday, one of the few remaining items on his agenda before stepping down from that position. President Obama has named Sally Jewell, CEO of Recreational Equipment Inc., as his nominee to succeed Salazar (see Daily GPI, Feb. 7). The Senate Energy and Natural Resources Committee is expected to vote Thursday on whether to send the nomination to the full Senate for consideration (see Daily GPI, March 20).
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