6196

Views

Gulf of Mexico Lease Sale Reaffirms Industry Recovery

file photo
file photo

By MarEx 2018-08-15 18:27:05

Wednesday's region-wide Gulf of Mexico Lease Sale 251 generated $178,069,406 in high bids for 144 tracts covering 801,288 acres in federal waters of the Gulf of Mexico. A total of 29 companies participated in the lease sale, submitting $202,667,923 in bids.

Lease Sale 251 included 14,622 unleased blocks, located from three to 231 miles offshore, in the Gulf’s Western, Central and Eastern Planning Areas in water depths ranging from nine to more than 11,115 feet (three to 3,400 meters). Many of the blocks offered had been offered many times before, and the results are generally being viewed as a positive sign for the industry. 

National Ocean Industries Association (NOIA) President Randall Luthi said: “While not a barn burner, Lease Sale 251 tops the previous Gulf sale in terms of increased participation, increased competition for offerings and bid amounts. In addition, bidding activity demonstrates both continued interest in deepwater tracts and renewed interest in shallow water tracts.

“The operating environment in the U.S. Gulf of Mexico shows tangible signs of improvement pointing to an industry that is poised to shift into high gear,” he said. “Oil prices are higher, revisions to overly burdensome regulations are in the works, rig rates and supply chain prices are more competitive, and companies have improved the efficiency of their operations. The results of today’s sale reaffirm the paradoxical state of an offshore energy industry in slow recovery mode; the future is bright, but shifting out of reverse takes time.”   

In a separate move, however, the Natural Resources Defense Council has launched a new digital tool to help the U.S. public to track where their governors and members of Congress stand on the Trump administration’s proposal to expose nearly all of the nation's coast to offshore oil and gas drilling.

Franz Matzner, Director of Federal Affairs for the Natural Resources Defense Council, said: “Drilling is the last thing Florida needs. The state is already reeling from climate change, not to mention toxic algae and rising sea levels. Producing dirty energy offshore would lock in decades of carbon pollution, putting its coasts and communities at even greater risk.”

Matzner cites the 2010 BP Deepwater Horizon spill which spanned 1,300 miles, coated many Florida beaches and inflicted nearly $700 million in lost recreational use and $250 million in commercial fishing losses.

Lease Sale 251 was the third offshore sale held under the 2017-2022 Outer Continental Shelf Oil and Gas Leasing Program. Under this program, 10 region-wide lease sales are scheduled for the Gulf, with two held each year.