New Gulf Of Mexico Leases Raise Concerns

The Trump administration on Wednesday held a new auction for offshore drilling in the Gulf of Mexico (GOM), yielding some $178 million in winning bids, a slight improvement from its last major lease sale in March which was at the time was called a major setback for the presidents plan to increase oil and gas investment in the region. 

The new sale encompassed 77.3 million acres and 14,474 unleased blocks in federal waters off of the coasts of Texas, Louisiana, Mississippi, Alabama, and Florida. It received 171 bids by 29 companies, with independent oil and gas producer Hess making the largest bid at $25 million. Hess is the eighth largest producer in the GOM and also has offshore assets in Europe, Asia Pacific and South America.

In the previous March sale, oil companies bid on just 1 percent of the total acreage that was offered at the time, raising $124.8 million on 159 bids from 33 companies, including bids from oil majors Royal Dutch Shell, Chevron, Total, and BP.

Just like in March, the Trump Administration put a positive spin on last weeks sale, calling it an improvement, while also downplaying perceptions of reduced interest in offshore oil and gas drilling.

I look at it as a positive sale, Michael Celata, GOM regional director at the Bureau of Ocean Energy Management (BOEM), told reporters Wednesday morning. There is obviously continued interest in deep water. Overall, I still think the Gulf is a very viable place.

Bidders appeared more willing to focus on deep water explo....

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