Largest Gulf of Mexico Lease Sale In History Attracts Lukewarm Interest

The Interior Department’s U.S. Gulf of Mexico Lease Sale 250 attracted $139 million in bids concentrated in deepwater offshore Louisiana and others areas near the Mexican border, according to a report by S&P Global Platts.

While this sale was the largest for the body of water in history, the new round of lease sales bested the previous edition by $4 million, which is a relatively small difference overall.

Still, bidding in the Mississippi Canyon area was active, with a string of multimillion-dollar bids being topped by a $7 million offer by Total. Chevron won the rights to another block in the southern Mississippi Canyon. A $2.9 million bid by BP won the U.K-based firm a block in the area as well.

In previous months, 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 will likely 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

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