• 4 minutes Will We Ever See 100$+ OIL?
  • 8 minutes Iran downs US drone. No military response . . Just Destroy their economy. Can Senator Kerry be tried for aiding enemy ?
  • 11 minutes Energy Outlook for Renewables. Pie in the sky or real?
  • 12 mins Shale Oil will it self destruct?
  • 1 day NYT: Mass Immigration Roundups in U.S. to Start Sunday
  • 7 hours White House insider who predicted Iran False Flag, David Goldberg found dead in his New York apartment
  • 38 mins Migration From Eastern Europe Raises German Population To Record High
  • 2 hours Excellent Choice: Germany's Von der Leyen Secures Powerful EU Executive Top Job
  • 13 hours Germany exits coal: A model for Asia?
  • 1 day Carrot And Stick: North Korea Suggests It Might Lift Weapons Test moratorium
  • 29 mins Washington Post hit piece attacking oil, Christians and Trump
  • 22 hours South Korea imports No Oil From Iran in June - First-Half Imports Fall 37%
  • 9 hours Starlink Internet Courtesy of Tesla
  • 13 hours A Silence is heard
  • 2 days U.S.- Taiwan: China Says Will Freeze Out U.S. Companies That Sell Arms To Taiwan
  • 1 day Trump vs. Xi Trade Battle, Running Commentary from Conservative Tree House
EV Giants Vie For Battery Dominance

EV Giants Vie For Battery Dominance

EV makers are pouring billions…

Big Oil Shuns Unexplored Acreage In Largest U.S Oil & Gas Lease Sale

offshore rig

The world’s biggest oil companies preferred to bid on areas close to existing infrastructure and largely stayed out of unexplored acreage in last month’s lease sale in the Gulf of Mexico, which drew bids on just 1 percent of the total area up for grabs, despite the U.S. Administration touting it as the largest oil and gas lease sale in U.S. history.

The lease sale offered 77.3 million acres in the Gulf of Mexico comprised of 14,431 blocks. The number of blocks that received bids was 148—just 1 percent of the blocks offered. The sum of high bids was US$124.8 million, with bids totaling US$139 million.

The top companies based on the total number of high bids submitted ranked as follows: BP, Chevron, Shell, Total, and Hess Corporation, the Bureau of Ocean Energy Management (BOEM) said. In terms of the single highest bids, Total led the ranking, followed by Shell and Chevron.

“Today’s lease sale is yet another step our nation has taken to achieve economic security and energy dominance,” Interior Assistant Secretary for Land and Minerals Management Joe Balash said after the lease sale.

However, according to a Reuters analysis on the areas and bids, Big Oil was targeting mostly areas very close to existing infrastructure to maximize the discovery potential and minimize development costs of a potential discovery. Out of the 105 new U.S. leases in the Gulf of Mexico at water depths of more than 656 feet, 85 leases were adjacent to existing leased acreage or platforms, while another 17 leases lie within two miles from existing infrastructure or leases, the analysis showed.

Both BP and Shell told Reuters that with this lease sale they were targeting acreage close to their respective facilities and production in order to build onto their existing acreage.

The focus on highly developed areas in this lease sale highlights the trend that companies are not yet willing to splash money on prospecting in far-off and unexplored areas, just as they started to generate more cash and profits after the downturn.

“Spending a lot of money to prospect is probably not going to be looked upon with favor by investors,” Michael Cohen, director of commodity research at Barclays, told Reuters.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • Lee James on April 04 2018 said:
    Is the same underwhelming response going to happen with leasing way up north at the Arctic Wildlife Refuge?

    Wish President Trump liked fish and wildlife more.

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play