The latest US Gulf of Mexico lease sale saw just 30 companies submit US$156 million in high bids for territory in the Central Planning Area last week. This compares with around US$1.2 billion generated when the same auction was held three years ago against a backdrop of higher oil prices.
The total number of high bids pledged at Sale 241, which was held in New Orleans on March 23, is the fourth lowest for any Central Gulf sale, according to the US Bureau of Ocean Energy Management (BOEM). The 148 sealed bids filed with the agency also marked the lowest collected in a Central Gulf sale in the past 20 years.
The Central Planning Area encompasses 8,349 unleased blocks, covering 44.3 million acres (179,276 square km), located 3-230 nautical miles (6-426 km) offshore Louisiana, Mississippi and Alabama. The blocks are located in water depths of 9-11,115 feet (3-3,400 metres), BOEM said.
Meanwhile, another lease sale in the Eastern Planning Area, Sale 226, did not receive any bids.
The reduced interest in Gulf leases comes as production in the region is rising, from leases that were sold many years ago. A lack of cash among producers, as well as concerns over future offshore regulations, has been cited as the reason that companies stayed away.
However, officials are confident that interest will rebound when oil prices improve.
“That’s a normal reaction to market conditions,” the US Department of the Interior’s (DoI) Assistant Secretary for Land and Minerals Management, Janice Scheider, said. “When prices come up, we expect interest to come up as well.”