The Bureau of Ocean Energy Management (BOEM) will conduct the first oil and gas lease sale in the Gulf of Mexico (GOM) since the Macondo well blowout in April 2010.

Department of the Interior (DOI) Secretary Ken Salazar and BOEM Director Tommy Beaudreau said the Western Gulf sale, Lease Sale 218, will be held at the Louisiana Superdome in downtown New Orleans on Dec. 14 and will include all of the available unleased areas in the Western Gulf Planning Area (WGPA), which lies off the coast of Texas.

Salazar and Beaudreau said the upcoming sale was consistent with the Obama administration’s announcement in May that it would let oil and gas lease sales proceed (see NGI, May 23).

“This sale is an important step toward a secure energy future that includes safe, environmentally sound development of our domestic energy resources that will continue to reduce our dependence on foreign oil and create jobs here at home,” Salazar said.

According to the BOEM, Lease Sale 218 will encompass 3,913 unleased blocks covering more than 21 million acres, and will be the last WGPA sale for the 2007-2012 Outer Continental Shelf Oil and Natural Gas Leasing Program. The blocks are located from nine to about 250 miles offshore, with water depths ranging from 16 to more than 10,975 feet (5 to 3,346 meters).

The BOEM estimates the lease sale could result in the production of 222 to 423 million bbl of oil and 1.49 to 2.65 Tcf of natural gas.

Lease terms and economic conditions for Lease Sale 218 are provided in the final notice of sale, which was also published in Thursday’s Federal Register. Among the terms is an increase in the minimum bid amount for blocks in water depths of 1,312 feet (400 meters) and greater from $37.50 to $100/acre. The minimum bid amount for leases in the shallower water depths will remain unchanged at $25/acre.

The BOEM said it changed the minimum bid amount after an analysis of the last 15 years of lease sales in the GOM revealed that virtually no exploration and development activities occurred on leases where the high bid was less than $100/acre. “Raising the minimum bid will discourage companies from inventorying offshore acreage that they are unlikely to explore during the lease term,” the BOEM said.

Copies of Lease Sale 218’s terms and conditions can also be obtained from the BOEM’s Gulf of Mexico Region’s public information unit, 1201 Elmwood Park Boulevard, New Orleans, LA 70123, or at 800-200-GULF (4853).

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