This year’s Western Gulf of Mexico Lease Sale has concluded and could be seen as an indicator of the current state of the offshore industry in North America. The sum of all high bids for this year’s Western Gulf Lease Sale brought in a paltry USD 22,675,212; compare this to last year’s total of USD 109,951,644. Only 33 blocks were bid on this year, with each block only receiving one bid a piece.
This year’s sale saw only 5 companies participating, compared to last year’s 14. Those companies are BHP Billiton, Ecopetrol, Anadarko, Peregrine, and BP. BHP Billiton placed the most bids with 26 bids, with Ecopetrol coming in second with 4 bids, Anadarko with 3, Peregrine with 2, and BP with 1.
The highest bid submitted this year for a single block was USD 2,802,003 by Ecopetrol for the East Breaks 685 block. BP came in second with a USD 878,552 bid for the Keathley Canyon 139 block (located near the Tigris exploration project BP is conducting with Chevron and ConocoPhillips).
It is important to note that the Western Lease Sale typically attracts much less attention than the Central Lease Sale, but the noticeable disinterest this year could very well be a sign of the times.
NOIA President Randall Luthi issued the following statement following the sale:
“While disappointing, the results of this lease sale are not surprising and accurately reflect the current environment of low commodity prices and increasing regulatory changes and uncertainty. The entire oil and natural gas industry, particularly the offshore segment, is understandably being very cautious about spending money. The companies that did participate in this sale should be appreciated for their faith in a bright energy future and in the potential of the Gulf of Mexico in spite of discouraging market and other conditions.
“Each lease purchased shows a commitment to job creation, economic growth and increased energy security. This commitment comes in spite of mixed energy messages coming out of Washington D.C. Just this week, Shell was given its final permit to drill off Alaska, but the next day, potentially costly and devastating methane regulations were proposed and a leading presidential candidate announced her opposition to drilling in the Arctic, completely dismissing the regulatory and safety mechanisms in place.
“As other countries continue to open up their offshore oil and natural gas resources, the U.S. should truly be concentrating on a broad energy policy, firmly based upon the wise and continued development of fossil fuels and complemented by renewables. Today’s lease sale was quick, quiet and small, but it is still a step in the right direction and will create jobs, boost economic activity, and strengthen US energy security. We are hopeful that policy makers in Washington will acknowledge these benefits and validate their importance to our nation’s economic and energy health by opening up new offshore areas for exploration and development.”
http://oilpro.com/post/17705/western-gom-lease-sale-246-yields-a-paltry-22675212
As written by Kory Kinney
