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Are Oil And Gas Drillers Still Interested In Lease Sales?

The U.S. Administration is holding this week an oil and gas lease sale in New Mexico while American producers curtail production in response to low oil prices and environmentalists and indigenous groups protest lease sales and drilling plans.

The Bureau of Land Management (BLM) has scheduled the oil and gas lease sale in New Mexico for the week starting May 18, and the online auction is set to begin on May 20 and end on May 21. BLM proposes to offer 95 parcels totaling 45,446 acres in Chaves, Eddy, and Lea counties in New Mexico; and Wise County in Texas.

The oil and gas lease sale in the state home to the westernmost part of the Permian basin will be the first auction for drilling on federal land since U.S. benchmark prices flipped negative in April a day before the expiry of the May futures contract of WTI Crude.

While BLM says that the lease sale is keeping with the Administration’s goal of promoting American energy security, environmentalists and other groups have protested against the sale, saying that public comments on the auction have been hampered by the COVID-19 outbreak.

WildEarth Guardians also said earlier this month that BLM and the Bureau of Indian Affairs (BIA) denied requests to suspend the public comment period on a controversial drilling plan for the Greater Chaco region.

“Ignoring these requests, the Bureau of Land Management is refusing to relent on the Trump’s Administration’s “energy dominance agenda,” despite record low oil prices questioning whether oil and gas drilling is now revenue negative for communities and New Mexico at-large,” WildEarth Guardians said.

In March, after oil prices crashed, the U.S. Administration held oil and gas lease sales in four states, despite calls for immediate suspension of oil and gas drilling lease sales on federal land amid slumping prices. The lease sale of 75 parcels in Wyoming raised more than $3.4 million, BLM said.

By Tsvetana Paraskova for Oilprice.com

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