ConocoPhillips last Wednesday bid $103.2 million for a tract in the western Gulf of Mexico (GOM), making it the highest bidder in the first auction held by the federal government in the region since the Macondo well blowout in 2010 (see see NGI, April 26, 2010).

ConocoPhillips submitted the bid for Block 95 in Keathley Canyon. The Houston-based producer was the apparent high bidder on 75 blocks, the most for any company, and had the most in bonus bids, $157.8 million, said the Interior Department’s Bureau of Ocean Energy Management (BOEM), which conducted Lease Sale 218 in New Orleans.

The lease sale attracted a total of $337.7 million in high bids and included 20 companies submitting 241 bids on 191 tracts comprising more than one million acres offshore Texas in the areas of Matagorda Island, Brazos, Galveston, High Island, West Cameron, East Breaks, Garden Banks, Alaminos Canyon and Keathley Canyon. The sum of all bids received totaled $712.7 million, BOEM said.

Sale 218, the last remaining sale in the Western Gulf Planning Areas in the 2007-2012 Outer Continental Shelf leasing program, made available 3,913 unleased blocks covering more than 21 million acres. The blocks are located from nine to about 250 miles offshore, in water depths ranging from 16 to more than 10,975 feet.

In addition to ConocoPhillips, some of the other bidders were Hess Corp., Apache Corp., ExxonMobil Corp. Shell Offshore Inc., Anadarko US Offshore Corp., BP Exploration & Production, Plains Exploration & Production Co. and Arena Energy LP.

“From our point of view, the most important thing today is that this lease sale [218] took place,” said Randal Luthi, president of the National Ocean Industries Association, which represents the offshore industry.

“After nearly two years without a sale in the Gulf, companies are understandably eager to secure new leases for new projects, and we saw that today in the number of bids submitted and the healthy mix of majors and independents. Clearly interest in the deepwater areas remains high, with nearly 85% of bids on deepwater tracts.

“This sale is a step in the right direction toward getting companies back to work producing new vitally important domestic domestic offshore oil and gas,” Luthi said.

The American Petroleum Institute (API), which represents major oil and natural gas producers, echoed the sentiment. “Holding the first oil and natural gas lease sale in the western Gulf of Mexico in two years is a positive step,” said Erik Milito, API’s group director of upstream and industry operations.

In related action, environmental groups filed a complaint last Tuesday in federal court in Washington, DC, challenging the supplemental environmental impact statement (SEIS) that cleared the way for Lease Sale 218.

The Southern Environmental Law Center brought the lawsuit on behalf of Oceana, Defenders of Wildlife, Natural Resources Defense Council (NRDC) and the Center for Biological Diversity in the U.S. District Court for the District of Columbia. It asked that the SEIS be vacated. “We think it doesn’t comply with the National Environmental Policy Act,” said Catherine Wannamaker, senior attorney at the Southern Environmental Law Center, which will represent the groups in court.

Specifically the environmental groups contend that BOEM has ignored the impact of BP plc’s 200 million-gallon oil spill in its assessment of the risks and precautions for the GOM before conducting the first auction of oil and gas leasessince the Deepwater Horizon disaster.

In moving forward with this lease sale, “the federal government is failing to learn from one of the most environmentally and economically destructive incidents in U.S. history,” said David Pettit, senior attorney with NRDC.

“BOEM is continuing the same irresponsible approach that led to the BP Deepwater Horizon disaster and harm still being felt in the Gulf,” Wannamaker said.

“Failing to fully analyze the effects of the Deepwater Horizon oil disaster and the potential of future spills before moving forward with drilling in the Gulf of Mexico is asking for another drilling catastrophe,” agreed Sierra Weaver, attorney for Defenders of Wildlife.

“The administration has buried its head in the sand, ignoring the devastating impact of the BP spill, and acting as if nothing ever happened. But the spill’s impacts on endangered and commercially important species must be considered,” noted Jacqueline Savitz, senior campaign director for Oceana.

©Copyright 2011Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.