The U.S. Department of the Interior will hold an oil and gas lease sale for 78 million acres in the Gulf of Mexico on August 15, the department said in a press release. The amount includes all hitherto unleased areas in the U.S. section of the Gulf.
This is the third offshore lease sale under the National Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2017-2022 out of a total ten for the Gulf of Mexico, to be held at the rate of two per year.
The U.S. OCS in the Gulf of Mexico contains an estimated 48 billion barrels of technically recoverable crude oil as well as 141 trillion cu ft of technically recoverable natural gas. The August tender will include 14,622 blocks at depths ranging from nine to more that 11,000 feet. The royalty rates set by the Bureau of Ocean Energy Management are 12.5 percent for blocks at depths of less than 200 meters and 18.75 percent for all the rest.
The last lease sale for the Gulf of Mexico took place in March and did not cause particular enthusiasm. With just 1 percent of the blocks on offer finding a suitor, the tender brought in just US$124.8 million. The results of that lease sale also suggested big oil producers were not willing to risk exploration in new, untapped parts of the Gulf, preferring instead to stay close to brownfield developments. Related: Spare Capacity: The Biggest Mystery In Oil Markets
The opening up of greater parts of the U.S. continental shelf is part of President Donald Trump's America-First Offshore Energy Strategy, which raised environmentalists' hackles as soon as it was first mentioned. Yet the administration has not been deterred by the opposition as it works to reduce reliance on oil imports by boosting local production.
This has indeed been growing at a steady and impressive rate, reaching 10.9 million bpd last month. Yet the United States is also the second-largest importer of crude, accounting for 15.9 percent of global imports in terms of value, at US$139.1 billion.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
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