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Gulf of Mexico Oil and Gas Lease Sale Attracts $159 Million in High Bids

August 29, 2019 by Dan McCue
Gulf of Mexico Oil and Gas Lease Sale Attracts $159 Million in High Bids

WASHINGTON – Last week’s sales of Gulf of Mexico leases for oil and gas exploration generated over $159 million in high bids for 151 tracts covering 835,000 acres in federal waters, the Interior Department reports.

A total of 27 companies participated in the sale, officially known as “Gulf of Mexico Lease Sale 253,” submitting more than $175 million in bids.

The interest in the sale suggests that there’s a renewed optimism in the oil and gas industry in offshore projects.

In 2018, two sales on leases in the central Gulf netted about $303 million. A sale in March pulled in $244 million, meaning the latest sale would have needed to capture just $60 million to beat last year.

It surpassed that by $115 million.

“We are excited about the results from [the] lease sale, which show a continued upward trend for the year,” said Andrea Travnicek, the Interior Department’s deputy assistant secretary for Land and Minerals Management.

“The Gulf of Mexico continues to be a critical part of our nation’s energy infrastructure strengthening our country through increased national security, job creation, and revenues for the American people, ” Travnicek added.

Lease Sale 253 included 14,585 unleased blocks, located from three to 231 miles offshore, in the Gulf’s Western, Central and Eastern Planning Areas in water depths ranging from nine to more than 11,115 feet.

“The Gulf of Mexico is the crown jewel of our nation’s energy portfolio,” said Mike Celata, director of the Bureau of Ocean Energy Management’s New Orleans office.

“As one of the most productive basins in the world, the development of its resources are essential to the nation’s energy security,” he added.

The National Ocean Industries Association said the blocks in deepwater and ultra-deepwater regions witnessed strong interest from energy companies in this sale, and most of the bids were for blocks close to existing platforms, which can further lead to more cost savings and increased efficiencies.

Revenues received from the leases (including high bids, rental payments and royalty payments) will be directed to the U.S. Treasury, certain Gulf Coast states (Texas, Louisiana, Mississippi, and Alabama), the Land and Water Conservation Fund, and the Historic Preservation Fund.

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