US Gulf Lease Sale Shows 'Industry Optimism'

Shell, Statoil and Hess were the top bidders for leases in the Department of the Interior’s central region US Gulf of Mexico lease sale 247 which took place March 22.

The top three for leases were Shell, Chevron and ExxonMobil with 20, 20 and 19 each respectively. Statoil, Hess, Anadarko and Total also each successfully bid for a double-digit number of tracts.

Twenty-eight companies in total submitted successful bids for 163 tracts offshore Louisiana, Mississippi and Alabama covering 913,542 acres, and the sum of their successful bids totaled just under $275mn. Details can be found here.

US Interior Secretary Ryan Zinke said the bids reflected “continued industry optimism and interest in the Gulf’s outer continental shelf, a keystone of the nation’s offshore oil and gas resources and a vital part of President Trump’s plan to make the United States energy independent.”

The administration’s Bureau of Ocean Energy Management (BOEM) estimates the lease sale could result in the production of 460mn to 890mn barrels of oil, and 1.9 trillion to 3.9  trillion ft³ of natural gas.

Each bid will go through a 90-day evaluation process to ensure the public receives fair market value before a lease is awarded and posted once completed on BOEM’s website.

As of March 1, 2017, about 16.9mn acres on the US outer continental shelf are under lease for oil and gas development (3,194 active leases) and 4.6mn of those acres (929 leases) are producing oil and natural gas, said BOEM. More than 97% of the leases are in the US Gulf of Mexico; about 3% are offshore California and Alaska.

Mark Smedley