The Department of the Interior released the results of the largest oil and gas lease sale in U.S. history Wednesday, reflecting the state of industry interest in offshore drilling in the Gulf of Mexico.
The results were similar to what experts expected, bringing in $124.7 million in high bids, slightly higher than the $121 million brought in last lease sale held in August. The stiffest competition and highest bids came from deep-water areas off the coast of Louisiana and a few spots near the Mexican border, according to S&P Global Platts.
Earlier in March, Interior Secretary Ryan Zinke said the results of the sale would serve as a “bellwether” for the future of offshore drilling in the Gulf of Mexico.
The National Ocean Industries Association (NOIA), a trade group for offshore industry and energy, was “encouraged” by the results of the lease sale, “which show a promising trajectory towards the future,” NOIA President Randall Luthi said in a statement.
Others slammed the Trump administration for placing 77 million acres of federal water leases up for auction.
“Trump is selling off our oceans and selling out coastal communities and marine life to the oil industry,” Center for Biological Diversity Oceans Program Legal Director Kristen Monsell said in a statement. “Whales, dolphins and Gulf seafood are already marinating in oil spills and industry wastewater. More drilling and less regulation will make the next Deepwater Horizon disaster only a matter of time.”
Total bids for the sale came out to $139 million, again higher than the last lease sale where $137 million in bids were submitted.
“Bonus bids are an indicator of the ability and confidence of producers to invest in the Gulf of Mexico,” Luthi said. “These are not new fields, and producers are attempting to pick the best of what is left. From that view, the bids demonstrate a solid commitment by the oil and natural gas industry to continue to invest in U.S. offshore energy and U.S. jobs.”
The outcome was far short of a March 2017 lease sale that brought in nearly $275 million worth of high bids.
“While the outlook is promising, it also comes with a note of caution that with companies looking globally for exploration opportunities, the United States must continue to evaluate how to keep the Gulf of Mexico and other parts of the U.S. outer continental shelf attractive in light of competition from Brazil and Mexico,” Luthi said.
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