The US Bureau of Ocean Energy Management (BOEM) held two lease sales today (23 March) in New Orleans, amid loud protests from environmental groups. One lease sale (Lease Sale 241) attracted some US$156 million in high bids, the other sale (Lease Sale 226), covering the Eastern Planning Area, received zero bids.
Despite the continued low oil price environment, companies still came out to bid, albeit the round was not as impressive as prior bid rounds. Yet, the result was better than last August’s lease sale 246, which only accumulated $22.7 million for 33 tracts, covering 190,080 acres.
“The decline in oil prices and low natural gas prices obviously affect industry’s short-term investment decisions,” said BOEM Director Abigail Ross Hopper. “But, the Gulf’s long-term value to the nation remains high and the president’s (Obama) energy strategy continues to offer millions of offshore acres for development while protecting the human, marine and coastal environments, and ensuring a fair return to the American people.”
National Ocean Industries President Randall Luthi praised the industry for coming out and participating in today's lease sale.
“Even though today’s Eastern Gulf sale was a non-starter, and the Central Gulf sale saw the lowest industry interest in the history of such sales, the companies that stepped up and submitted bids demonstrated their commitment to staying in US waters and producing home grown energy, despite a tough operating environment," Luthi said.
The $156 million in high bids came in for Central Planning Area (CPA) Sale 241, which offered 128 tracts covering 693,962 acres of the Outer Continental Shelf offshore Louisiana, Mississippi and Alabama.
A total of 30 oil and gas companies submitted 148 bids for Sale 241. The sum of all bids received totaled over $179 million, BOEM said.
The blocks that received the highest number of bids were Mississippi Canyon 385 and 518, tied at three bids each. MC385 went to Deep Gulf Energy, which bid $6.5 million for the block. MC518 went to a consortia of BP (66.7%) and Noble Energy (33.3%), which bid $8.02 million.
The highest single bid for a block was $13.6 million for Mississippi Canyon 434, which sits in 1600+ ft water depth, from a consortia of Chevron (75%) and Venari Offshore (25%), who beat out Shell’s $1.58 million bid. The second highest bid came from BHP Billiton Petroleum for Green Canyon 475, also in 1600+ ft of water depth, for $13.2 million.
The CPA encompasses 8349 unleased blocks, covering 44.3 million acres, extending 3-230nm offshore Louisiana, Mississippi and Alabama, in water depths ranging 9-11,115ft (3-3400m).
Sale 226, which received zero bids, was the second of two lease sales proposed for the Eastern Planning Area under the current five-year program, encompassing 162 whole or partial unleased blocks and covering 595,475 acres in the Eastern Planning Area not subject to congressional moratorium. The blocks are 125 statute miles offshore in water depths ranging from 2657-10,213ft (810-3113m). The area is south of eastern Alabama and western Florida; the nearest point of land is 125mi northwest in Louisiana.
Protests
 |
| Photo courtesy of the Center for Biological Diversity. |
During the lease sale this morning, a group of environmental protestors, seeking to shut down the proceedings, entered the New Orleans Superdome where the sale was being held. Groups chanted "shut it down" while the bids were being announced.
NOIA's Luthi also commented on the protesters:
“If these protesters have the opportunity to visit more of the Gulf of Mexico, they will see just how important oil and natural gas is to the residents of the Gulf Coast. These are people that love to fish and recreate offshore; no one is more concerned with the environment, and they will do all they can to see that the oil and natural gas off their coast is developed safely. The Gulf of Mexico is the source of 20% of our domestic oil and natural gas supply, and this is energy for all of us. While it is everyone’s right to protest, many of the demonstrators could not have been here in New Orleans today without the oil and natural gas produced as a result of the very sales they oppose; it is difficult to overlook the irony."
Read more
Subscribe
