Shell is Top Bidder in Gulf of Mexico Lease Sale
The latest U.S. oil and gas lease Sale (247) for Gulf of Mexico acreage garnered $274,797,434 in high bids for 163 tracts covering 913,542 acres offshore Louisiana, Mississippi and Alabama.
Shell Offshore was the top bidder, offering 20 bids totaling $55,856,380, including one for over $24 million for a deepwater block in Atwater Valley. Shell already holds interest in 335 offshore leases in the Gulf of Mexico.
28 offshore energy companies submitted 189 bids, totalling $315,303,884. This amount is significantly higher than the $179 million in bids generated during the last central Gulf of Mexico lease sale. The number of high bids also increased from the previous sale which attracted $156.4 million.
Other high bidders included:
• Statoil Gulf of Mexico submitted 13 high bids totaling $44,500,688.
• Hess Corporation submitted 12 high bids totaling $43,873,740.
• Chevron U.S.A. submitted 20 high bids totaling $35,566,603.
• ExxonMobil submitted 19 high bids totaling $21,910,475.
• Anadarko US Offshore submitted 16 high bids totaling $18,941,629.
• TOTAL E&P USA submitted four high bids totaling $15,000,000.
• Walter Oil & Gas submitted four high bids totaling $6,268,088.
• Ridgewood Energy submitted eight high bids totaling $4,773,962.
• LLOG Exploration Offshore submitted four high bids totaling $3,279,524.
• Houston Energy submitted nine high bids totaling $2,082,090.
• Talos Energy Offshore submitted six high bids totaling $2,319,000.
• Red Willow Offshore submitted six high bids totaling $1,489,454.
“Today’s strong sale reflects continued industry optimism and interest in the Gulf’s Outer Continental Shelf, a keystone of the Nation’s offshore oil and gas resources and a vital part of President Trump’s plan to make the United States energy independent,” Secretary of the Interior Ryan Zinke said. “Expanded Gulf production is critical to America’s economic and energy security, and will play a greater role as we move to break our dependence on foreign oil and strengthen the Nation’s energy independence.”
The lease sale, which included all unleased and non-protected areas in the Central Gulf of Mexico Planning Area, is the final to be held in the Gulf of Mexico under the current Outer Continental Shelf Oil and Gas Leasing Program for 2012-2017 (Five Year Program). The first eleven sales in the Five Year Program offered nearly 73 million acres for development and garnered more than $3 billion in bid revenues.
BOEM estimates the lease sale could result in the production of 460 to 890 million barrels of oil, and 1.9 trillion cubic feet to 3.9 trillion cubic feet of natural gas.
As of March 1, 2017, about 16.9 million acres on the U.S. OCS are under lease for oil and gas development (3,194 active leases) and 4.6 million of those acres (929 leases) are producing oil and natural gas. More than 97 percent of the leases are in the Gulf of Mexico; about three percent are on the outer continental shelf off California and Alaska.
Industry body NOIA’s President Randall Luthi said: “We are very pleased with the results of today’s Central Gulf of Mexico lease sale, which not only reflect an improving offshore oil and gas market, but also optimism for increased opportunities for offshore leasing, exploration and development under the Trump administration.
“Today’s sale demonstrates that the offshore oil and gas industry remains committed to staying in U.S. waters and underscores the importance of offshore development to the U.S. economy and domestic energy security. The offshore oil and gas industry provides tremendous economic and energy benefits for our nation.
“Over the years, offshore lease sales in the Gulf of Mexico have contributed billions of dollars to the U.S. Treasury ($80 billion between 2005 and 2014) and recently that revenue stream began flowing to Gulf of Mexico states as well. What’s more, the Energy Information Agency predicts that U.S. oil production in the Gulf of Mexico will reach record highs in 2017, which will continue to boost Gulf state economies.”