The Interior Department’s Minerals Management Service (MMS) has tentatively scheduled its controversial Lease Sale 181 in the eastern Gulf of Mexico for Dec. 5 in New Orleans, LA.

The decision came after a Senate bipartisan coalition led by Louisiana lawmakers voted 67-33 last Thursday to hold the sale as scheduled, even though the House earlier had rejected the idea. The House last month had adopted a measure by the Florida delegation to defer the sale until April 2002, which some critics saw as part of the state’s strategy to get the lease sale cancelled.

The sale has been hanging in limbo because of the Florida’s opposition to drilling off its coasts, despite the fact that the tracts are more than 100 miles away from the Sunshine State’s shoreline.

In a major concession to the state, the Bush administration earlier this month scaled back the amount of acreage that will be offered to producers in the lease sale — to 1.5 million acres from 5.9 million acres. The acreage to be available in the downsized lease site is located more than 100 miles from the Florida-Alabama state line and more than 285 miles west of Tampa, FL. Future drilling in the eastern Gulf will be limited principally to deep-water areas located more than a 100 miles from the Alabama coastline. The gas potential of the lease area has been estimated at 1.25 Tcf, while the oil potential has been put at 185 million barrels.

MMS released the terms and conditions of the offshore blocks that will be offered to producers. They will have primary lease terms of 10 years; minimum bids will be $37.50 per acre or faction thereof; annual rental rates will be $7.50 per acre or fraction thereof; royalty rates are 12.5%; and royalty suspension applies to 12 million barrels of oil equivalent.

There will be a 60-day comment period on the proposed Notice of Sale for Lease Sale 181, which was published in Friday’s Federal Register. A complete package of information related to the proposed sale is available from the MMS website at

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