Oil and gas lease sale in Central Gulf of Mexico draws more than $1.7B in high bids for more than 2.4M acres; Shell, Statoil, BP top high bidders
21 June 2012
The US Department of the Interior held a 39-million acre lease sale in the Gulf of Mexico. Secretary of the Interior Ken Salazar announced that the Central Gulf of Mexico oil and gas lease sale attracted $1,704,500,995 in high bids for tracts on the US outer continental shelf offshore Louisiana, Mississippi and Alabama. A total of 56 offshore energy companies submitted 593 bids on 454 tracts covering more than 2,402,918 acres. The sum of all bids received totaled $2,602,563,726.
Shell was the leading high bidder by value, with $406,594,560 for 24 high bids. Statoil came in second, with $333,259,056 for 26 high bids, followed by BP with $239,502,916 for 43 high bids. The highest bid on a single tract was $157,111,000, submitted by Statoil for Mississippi Canyon, Block 718.
The Central Gulf of Mexico Lease Sale 216/222, conducted by the Bureau of Ocean Energy Management (BOEM), offered more than 39 million acres for oil and gas development on the US Outer Continental Shelf. The acreage included 7,434 tracts from three to more than 230 miles off the coast, in depths ranging from 10 to more than 11,200 feet (3 to 3,400 meters). BOEM estimates the economically recoverable hydrocarbons that could be produced as a result of the acreage offered ranges from 0.8 to 1.6 billion barrels of oil and 3.3 to 6.6 trillion cubic feet of natural gas.
The latest sale builds on the Western Gulf of Mexico lease sale held by BOEM in December 2011 that made available more than 21 million acres, attracted more than $337 million in high bids, and included 20 companies submitting 241 bids on 191 tracts comprising more than a million acres offshore Texas. In 2010, DOI offered nearly 37 million offshore acres to industry for oil and gas leasing.
Lease terms for sales included escalating rental rates to encourage faster exploration and development of leases as well as shorter lease terms for shallower water in order to encourage timely development. BOEM has increased its minimum bid requirement in deepwater to $100 per acre, up from $37.50 in previous Central lease sales.
Lessees will have to comply with a series of environmental stipulations, including requirements to protect biologically sensitive features, as well as marine mammals and sea turtles, and employ trained observers to ensure compliance and restrict operations when conditions warrant. These terms will help ensure an appropriate balance of responsible resource development with protection of the human, marine and coastal environments.
Each high bid on a tract will now go through an evaluation process within BOEM to ensure the public receives fair market value before a lease is awarded. This is the final Gulf Lease Sale scheduled in the current Outer Continental Shelf Oil and Gas Leasing Program: 2007-2012.