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Oil Survives Bearish Backlash

Oil Survives Bearish Backlash

Crude benchmarks posted steep losses…

U.S. To Lease 76M Acres For Oil, Gas In Gulf Of Mexico

Offshore

The U.S. government will offer 75.9 million acres to oil and gas exploration companies in the upcoming lease sale auction, to take place on August 16, Secretary of the Interior Ryan Zinke said yesterday.

The auction will include all unleased areas in the U.S. section of the Gulf of Mexico, with a special focus on shallow water deposits, where the DOI has decided to ask for lower royalties in order to stimulate bidders.

For blocks at depths of less than 200 meters, the DOI is offering a royalty rate of 12.5 percent, compared to 18.75 percent for all other blocks.

Additionally, the DOI said, stipulations have been made for the protection of marine life in the area and for avoiding “potential conflicts associated with oil and gas development in the region,” the latter referring to the exclusion of blocks located beyond or adjacent to the U.S. Exclusive Economic Zone.

The lease sale is the first in a series of ten that are scheduled for the period 2017 to 2022, making up the National Outer Continental Shelf Oil and Gas Leasing Program. According to the DOI press release on the auction, the GOM is the focus of this program 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.

Related: Halliburton Sees Oil Price Spike By 2020

The lease sale, number 249, will include 14,220 previously unleased blocks located from 3 to 231 miles from the coast and at depths ranging from 9 to more than 11,115 feet. Some blocks in the area are excluded from the auction under the Gulf of Mexico Energy Security Act from 2006, which placed a moratorium on oil and gas exploration in these parts of the Gulf.

The U.S. outer continental shelf holds technically recoverable reserves estimated at 550 million barrels of oil1.25 trillion cu ft of natural gas.

By Irina Slav for Oilprice.com

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  • Philip Branton on July 14 2017 said:
    Is this statement :

    "... The U.S. outer continental shelf holds technically recoverable reserves estimated at 550 million barrels of oil1.25 trillion cu ft of natural gas.....,"

    .. Only for the Gulf?

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