Keeping with its May announcement that it would expand domestic oil and gas production safely and responsibly, on Friday the Obama administration announced that it will hold the first oil and natural gas lease sale in the Gulf of Mexico since last year’s BP disaster.

Western Gulf of Mexico Lease Sale 218 is scheduled to be held in New Orleans Dec. 14. The sale will include all available unleased areas in the Western Gulf off the Texas shore.

“BOEMRE has taken aggressive steps to renew our commitment to the responsible stewardship of the U.S. Outer Continental Shelf,” said Director Michael Bromwich. “The decision to hold this sale was made after careful analysis of the best scientific information available and consideration of all public comments received.”

The proposed lease sale encompasses about 3,900 unleased blocks covering approximately 20.6 million acres. The blocks are located from nine to about 250 miles offshore, in water depths ranging from 16 to more than 10,975 feet (5 to 3,346 meters). BOEMRE estimates the proposed lease sale could result in the production of 222 to 423 million barrels of oil and 1.49 to 2.65 trillion cubic feet of natural gas.

BOEMRE wants to increase the minimum bid amount for blocks in water depths of 1,312 feet (400 meters) and greater to $100 per acre, up from $37.50 per acre, to ensure receipt of fair market value for the lease rights sold. The administration also hopes the increase will encourage diligent development from bidders. It says the change is based on a rigorous historical analysis of the last 15 years of lease sales in the Gulf of Mexico:

The analysis, adjusted for energy prices at time of each sale, demonstrates that leases that received high bids of less than $100 per acre have experienced virtually no exploration and development activities. In light of this analysis, BOEMRE has concluded that the increase will have little to no adverse impact on the timing or magnitude of production from tracts offered in this sale. Raising the minimum bid will discourage companies from purchasing leases they are unlikely to explore in the near term.  

“BOEMRE is proposing this increase in an effort to ensure that areas with the greatest resource potential are developed, and to decrease the amount of leased acreage that is warehoused and goes unexplored,” Bromwich said. “The change in terms will better ensure that the nation’s resources are being developed in a timely manner.”

The minimum bid amount for leases in the much more heavily explored and produced shallower water depths will remain at $25 per acre.

The lease sale will include environmental stipulations requiring that operators protect biologically sensitive features, as well as marine mammals and sea turtles. These stipulations will require trained observers to ensure compliance and restrict operations when conditions warrant.

Lease Sale 218 is the last remaining Western Gulf Planning Area sale scheduled in the 2007 – 2012 Outer Continental Shelf Oil and Natural Gas Leasing Program. For more info on Western Sale 218, click here

To post a comment, please log into your IND account. If you do not have an account, click the "register" button to create one. Facebook comments can be used as an alternative to creating an account at theIND.com.

Loading
Chart
ABiz Stock Watch
o Home Bancorp 22.89 0.00 (0.00%)
o Frank's International 17.21 ▼0.26 (-1.49%)
o IberiaBank Corp 64.13 ▲0.08 (0.12%)
o LHC Group 23.74 ▲0.38 (1.63%)
o MidSouth Bancorp 18.85 ▼0.08 (-0.42%)
o Petroquest Energy 4.27 ▼0.20 (-4.47%)
o PHI Inc. 37.50 ▼2.71 (-6.74%)
o Superior Energy 25.58 ▼0.13 (-0.51%)
o Stone Energy 24.04 ▼1.20 (-4.75%)
o Facebook Inc. 80.67 ▲0.63 (0.79%)
o Twitter Inc. 49.95 ▲0.28 (0.56%)
o Gannett 31.43 ▲0.19 (0.61%)
NYSE:HBCP

Home Bancorp

Company ID [NYSE:HBCP] Last trade:22.89 Trade time:4:00PM EDT Value change:0.00 (0.00%)
NYSE:FI

Frank's International

Company ID [NYSE:FI] Last trade:17.21 Trade time:4:03PM EDT Value change:▼0.26 (-1.49%)
NYSE:IBKC

IberiaBank Corp

Company ID [NYSE:IBKC] Last trade:64.13 Trade time:4:00PM EDT Value change:▲0.08 (0.12%)
NYSE:LHCG

LHC Group

Company ID [NYSE:LHCG] Last trade:23.74 Trade time:4:00PM EDT Value change:▲0.38 (1.63%)
NYSE:MSL

MidSouth Bancorp

Company ID [NYSE:MSL] Last trade:18.85 Trade time:4:01PM EDT Value change:▼0.08 (-0.42%)
NYSE:PQ

Petroquest Energy

Company ID [NYSE:PQ] Last trade:4.27 Trade time:4:02PM EDT Value change:▼0.20 (-4.47%)
NYSE:PHII

PHI Inc.

Company ID [NYSE:PHII] Last trade:37.50 Trade time:4:00PM EDT Value change:▼2.71 (-6.74%)
NYSE:SPN

Superior Energy

Company ID [NYSE:SPN] Last trade:25.58 Trade time:4:07PM EDT Value change:▼0.13 (-0.51%)
NYSE:SGY

Stone Energy

Company ID [NYSE:SGY] Last trade:24.04 Trade time:4:04PM EDT Value change:▼1.20 (-4.75%)
NYSE:FB

Facebook Inc.

Company ID [NYSE:FB] Last trade:80.67 Trade time:4:00PM EDT Value change:▲0.63 (0.79%)
NYSE:TWTR

Twitter Inc.

Company ID [NYSE:TWTR] Last trade:49.95 Trade time:4:01PM EDT Value change:▲0.28 (0.56%)
NYSE:GCI

Gannett

Company ID [NYSE:GCI] Last trade:31.43 Trade time:4:04PM EDT Value change:▲0.19 (0.61%)
Advertisement

Read the Flipping Paper!

Click Here for the Entire Print Version of
ABiz
 
Advertisement
Advertisement