The U.S. Department of the Interior’s Minerals Management Service (MMS) published in the Federal Register its final notice for Eastern Gulf of Mexico (GOM) Sale 189. The lease sale, which will be held at 9 a.m. on Dec. 10, in New Orleans, encompasses 256 blocks in the Eastern GOM Planning Area and covers 1.47 million acres. Available unleased blocks in the planning area number 138 and cover 794,880 acres.

“This sale area is the same as Eastern GOM Sale 181 held in December 2001,” said MMS Regional Director Chris Oynes. “It remains one of great interest because of the potential oil and gas in the area. There is already production inside the sale area at BP’s Kings Peak project in Desoto Canyon 133, and MMS has received 20 exploration plans for leases in the area.”

The 138 unleased blocks are located from 100 to about 196 miles offshore in water depths of about 1,600 to more than 3,425 meters. The MMS estimates that undiscovered economically recoverable hydrocarbons in this proposal range from 65 to 85 million boe and 0.265 to 0.34 Tcf of natural gas. The MMS estimates the net economic value for this sale to be between $100-500 million in 2003 dollars. Each block lease is for 10 years.

The MMS said the final notice includes a continuation of a deepwater royalty relief measure recently adopted in other planning areas of the GOM for the purpose of increasing domestic natural gas and oil production to meet energy needs. It includes a provision for royalty suspension of 12 million boe for a lease in water depths of 1,600 meters and deeper, subject to given price thresholds. In addition, the MMS noted that lessees can apply for added discretionary royalty relief on these leases, if needed.

The lease sale also includes a recently revised Protected Species Stipulation designed “to minimize or avoid potential adverse impacts to federally protected species,” the MMS said. The stipulation resulted from recently completed consultations with the National Oceanic and Atmospheric Administration?Fisheries and the U.S. Fish and Wildlife Service.

Other previously adopted lease stipulations include a stipulation to reduce potential conflicts between oil and gas activities and military operations in military areas; a stipulation to provide for evacuation of oil and gas facilities in certain circumstances in the Eglin Water Test Areas (EGWTA’s); and a stipulation to require coordination and consultation by oil and gas operators in the EGWTA’s.

For more information on the sale, interested bidders can contact the MMS at 1-800-200-GULF.

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