Global and Regional MarketsNewsThe Offshore Frontier

Interior proposes region-wide oil and gas lease sale 253 for Gulf of Mexico

In support of President Donald Trump’s America-First Offshore Energy Strategy, Joe Balash, Interior’s Assistant Secretary for Land and Minerals Management, and Walter Cruickshank, Bureau of Ocean Energy Management (BOEM) Acting Director, have announced that BOEM proposes to offer 78 million acres for a region-wide lease sale scheduled for August 2019. The sale would include all available unleased areas in federal waters of the Gulf of Mexico.

“Offshore oil and gas resources are essential to our nation’s energy portfolio and America’s energy security,” Mr Balash said. “We all benefit from a strong offshore energy program, which provides thousands of well-paid jobs, and affordable, reliable energy that Americans need to heat homes, fuel our cars, and power our economy.”

Lease Sale 253, scheduled to be livestreamed from New Orleans, will be the fifth offshore sale under the 2017-2022 National Outer Continental Shelf (OCS) Oil and Gas Leasing Program. Under this program, 10 region-wide lease sales are scheduled for the Gulf of Mexico. Two Gulf of Mexico lease sales will be held each year and include all available blocks in the combined Western, Central, and Eastern Gulf of Mexico Planning Areas.

“Domestic offshore oil and gas development is critical for America’s economy and energy portfolio,” Dr Cruickshank said. “BOEM’s staff works hard to help ensure future development is done in a manner that addresses our nation’s energy security, while protecting marine life and the environment in which they live.”

Lease Sale 253 will include approximately 14,699 unleased blocks, located from three to 231 miles offshore, in the Gulf of Mexico’s Western, Central and Eastern planning areas in water depths ranging from nine to more than 11,115 ft (three to 3,400 m). The following areas are excluded from the lease sale: blocks subject to the congressional moratorium established by the Gulf of Mexico Energy Security Act of 2006; blocks 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 boundaries of the Flower Garden Banks National Marine Sanctuary.

The Gulf of Mexico OCS, covering about 160 million acres, is estimated to contain about 48 billion bbl of undiscovered technically recoverable oil and 141 trillion cu ft of undiscovered technically recoverable gas.

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

Leases resulting from this proposed sale would 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.

In addition, 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 pursuant to 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 253 are detailed in the Proposed Notice of Sale information package, which is available here. Copies of the maps can be requested from the Gulf of Mexico Region’s Public Information Unit at 1201 Elmwood Park Boulevard, New Orleans, LA, 70123, or at 800-200-GULF (4853).

The Notice of Availability will be available for inspection in the Federal Register on 13 March 2019 here, and will publish in the Federal Register on 14 March 14 2019.

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