Gulf Lease Sale generates $124 million in high bids
In support of President Donald J. Trump‘s America First Offshore Energy Strategy, Interior Assistant Secretary for Land and Minerals Management Joe Balash announced that region-wide Gulf of Mexico Lease Sale 250 generated $124,763,581 in high bids for 148 tracts covering 815,403 acres in federal waters of the Gulf of Mexico. A total of 33 companies participated in the lease sale, submitting $139,122,383 in bids.
“Today’s lease sale is yet another step our nation has taken to achieve economic security and energy dominance,” said Assistant Secretary Balash. “Today’s results will help secure high-paying offshore jobs for rig and platform workers, support staff onshore and related industry jobs, while generating much-needed revenue to fund everything from conservation to infrastructure.”
Lease Sale 250, livestreamed from New Orleans, was the second offshore sale held under the National Outer Continental Shelf Oil and Gas Leasing Program (National OCS Program) for 2017-2022. Under this program, 10 region-wide lease sales are scheduled for the Gulf, where resource potential and industry interest are high, and oil and gas infrastructure is well established. Two Gulf lease sales will be held each year and include all available blocks in the combined Western, Central, and Eastern Gulf of Mexico Planning Areas.
In January of this year, Secretary of the Interior Ryan Zinke announced a draft proposed program for a new national OCS program for years 2019-2024. The 60-day public comment period for the draft ended on 9 March. After considering all public comments received in response, the US Bureau of Ocean Energy Management (BOEM) will develop and publish a proposed program for public comment later this year, followed by the proposed final program expected in 2019.
“Today’s sale is a continuation of our all-of-the-above energy strategy,” said Vincent DeVito, Counselor to the Secretary of the Interior for Energy, “and will result in responsible development of American energy resources.”
The 2017-2022 National OCS Program will continue to be implemented until the new National OCS Program is approved.
Lease Sale 250 included 14,474 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 ft (three to 3,400 m).
Excluded from the lease sale are blocks subject to the congressional moratorium established by the Gulf of Mexico Energy Security Act of 2006; blocks that are adjacent to or beyond the US Exclusive Economic Zone in the area known as the northern portion of the Eastern Gap; and whole blocks and partial blocks within the current boundary of the Flower Garden Banks National Marine Sanctuary.
Money received from OCS leases (including high bids, rental payments and royalty payments) are directed to the US Treasury, Gulf Coast states, the Land and Water Conservation Fund and Historic Preservation Fund.
Leases issued as a result of this sale will include stipulations to protect biologically sensitive resources, mitigate potential adverse effects on protected species and avoid potential conflicts associated with oil and gas development in the region.
Additionally, BOEM has included appropriate fiscal terms that take into account market conditions and ensure taxpayers receive a fair return for use of the OCS. These terms include a 12.5% royalty rate for leases in less than 200 m of water depth, and a royalty rate of 18.75% for all other leases issued under the sale, in recognition of current hydrocarbon price conditions and the marginal nature of remaining Gulf of Mexico shallow water resources.
All terms and conditions for Gulf of Mexico Region-wide Sale 250 were detailed in the Final Notice of Sale information package.
