The largest oil and gas lease sale for waters in the Gulf of Mexico in U.S. history will occur on March 21st, according to an announcement by the Trump administration on Friday.
Less than a year ago, a similar auction in the same body of water generated little interest from energy companies.
The Interior Department, which oversees all onshore and offshore licensing activities, says the auction will include 77.3 million acres of offshore waters in the Gulf for energy development.
The round had been previously announced in October, but an exact date had not been assigned. It is part of President Donald Trump’s America First Offshore Energy Strategy, which promises to expand fossil fuel activity to lower imports and create jobs.
Oil prices have been low for three years, so expensive offshore drilling projects are not a top priority for energy companies.
Last month, analysts said the oil and gas industry’s response to the Trump administration plan to open almost all of the U.S. continental shelf for drilling leases is due to be slow.
The draft program, which would replace President Barack Obama’s leasing plan through 2022, which restricted drilling in the Arctic and other federal waters, fulfills the White House’s promise to encourage the American fossil fuel sector, even as the international community opts for renewable and alternative energies in the fight against climate change.
If the proposal is adopted, 47 potential lease sales could open up 25 of 26 planning areas, with the exception being Alaska’s North Aleutian Basin, which was deemed off limits by President George W. Bush, according to a report by Oil and Gas Investor. Nineteen sales would still proceed in offshore Alaska, seven in the Pacific, twelve in the Gulf of Mexico and nine in the Atlantic.
By Zainab Calcuttawala for Oilprice.com
More Top Reads From Oilprice.com:
- OPEC And Shale Keep Oil Prices Between $60-$75
- Iran Fails To Comply With OPEC Deal
- Offshore Oil Is Poised For Significant Growth
