The Interior Department said Thursday it will offer 38.6 million acres offshore Louisiana, Mississippi and Alabama for oil and natural gas exploration and development in the Central Gulf of Mexico Lease Sale 227 to be held in March. The sale could potentially result in almost 4 Tcf of natural gas production and nearly one billion bbl of oil production, according to the agency.

The sale, which will be held at the Mercedes-Benz Superdome in New Orleans on March 20, will include all unleased areas in the Central Gulf of Mexico (GOM) Planning Area. It will be the second sale under the Obama administration’s 2012-2017 Outer Continental Shelf (OCS) leasing program and will be the first of five Central GOM lease sales to be held under the program (see Daily GPI, June 29, 2012).

The offshore auction may very well be the swan song for Ken Salazar, who is set to step down as secretary of Interior in March. President Obama Wednesday named Sally Jewell, CEO of Recreational Equipment Inc., as his nominee to succeed Salazar, highlighting her experience in oilfields in Oklahoma and Colorado, and her work as an energy expert in banking (see Daily GPI, Feb. 7).

The lease sale encompasses 7,299 blocks located from three to about 230 miles offshore, in water depths ranging from nine to more than 11,115 feet. Interior’s Bureau of Ocean Energy Management estimates that gas production will range from 1.9 Tcf to 3.9 Tcf, while oil production will will be between 0.46 and 0.89 billion bbl.

The scheduled 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. 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.

More information about the sale is on the BLM website.

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