Intense interest

GoM Lease Sale Nets $872 Million

American Association of Petroleum Geologists (AAPG)

The current intense interest in the Gulf was underscored during the lease sales in March 2014 in the Central and Eastern areas.

Sales for federal waters captured more than $872 million in high bids on 329 tracts spread over close to 1,707,358 acres, according to Sally Jewell, Secretary of the Department of the Interior.

The Central Planning Area lease sale 231 lured 50 offshore energy firms that submitted 380 bids. In the end, high bids on 326 blocks tallied close to $851 million.

The 326-block area encompassed more than 1.7 million acres on the U.S. OCS offshore Louisiana, Mississippi and Alabama.

Eastern Planning Area lease sale 225 entailed 134 whole or partly unleased blocks spanning about 465,200 acres, located approximately 125 miles south of eastern Alabama and western Florida in water depths as much as 10,000-plus feet.

No bids were submitted, but interest is thought to remain high in this area given the ongoing and planned action on current leases incurred during past sales and on the leases adjacent to the Central Planning Area.

Under the existing Five-Year Offshore Oil and Gas Leasing Program, this area will again be offered to the industry in 2016.

Following the March lease sale, Tommy Beaudreau, director of the Bureau of Ocean Energy Management (BOEM) at the Department of the Interior, is on record as saying: “While domestic energy production is growing rapidly in the United States, the Central Gulf of Mexico, as demonstrated by today’s lease sale, will continue to be one of the cornerstones of the nation’s energy portfolio.”

Priming the Pump

The BOEM set the terms of the sale, which include standards to protect the environment.

Good news tends to help kick-start events just waiting to happen.

Successful lease sales in the Gulf serve to increase the conversation about opening up the off-limits Atlantic and certain parts of the eastern Gulf to hydrocarbon development.

According to API director of Upstream and Industry Operations Erik Milito, each lease sale in the United States increases the country’s position as an energy superpower.

“Offshore lease sales have raised more than $17.3 billion for the government over the last 10 years and allowed our industry to create more jobs and produce more energy here at home,” Milito said.

“Holding lease sales in the Atlantic and more of the eastern Gulf of Mexico would make America stronger economically and diplomatically,” he emphasized.

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