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EIA Reports Hefty Oil Inventory Build

EIA Reports Hefty Oil Inventory Build

The EIA confirmed a large…

Government Shutdown Delays To Release Oil & Gas Lease Sale

oiltech

The ongoing partial government shutdown has delayed the release of the final plan for oil and gas lease sales of offshore blocks in the Gulf of Mexico, the Atlantic, and the Arctic, S&P Global Platts reports, citing knowledgeable sources.

The Department of the Interior is one of nine federal ones that have been affected by the shutdown that began at the end of last year after President Trump demanded that Congress approves his plans for the border wall with Mexico and allocates US$5.6 billion for its construction.

The lease sale plan envisaged 47 lease sales, S&P Global Platts reports, in almost all federal waters. Last year, the Bureau of Land Management had scheduled 12 lease sales across the United States. Another one, and a controversial one, at that, for the Arctic National Wildlife Refuge, could take place this year despite the shutdown and environmental opposition.

Another lease sale planned for this year, in March, that will cover 78 million acres in the Gulf of Mexico is also unlikely to be affected by the shutdown because it was part of the 2017-2022 offshore lease sale plan – the National Outer Continental Shelf Oil and Gas Leasing Program – that was approved by the second Obama administration.

The U.S. outer continental shelf holds technically recoverable reserves estimated at 550 million barrels of oil and 1.25 trillion cu ft of natural gas. The Gulf of Mexico was made the focus of the 2017-2022 plan because of the consistent interest of oil and gas explorers in the area, the high resource potential, and not least, the extensiveness of production infrastructure, a statement from the Department of the Interior from 2017 said.

However, the Trump administration has been eager to open up more federal waters to oil and gas exploration as part of its energy dominance agenda. Opposition has been strong and now that Congress will have a Democratic majority, it may also become more meaningful.

By Irina Slav for Oilprice.com

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