Gulf of Mexico Lease Sale yields more than $159m in high bids, continues Upward Trend Under Trump Administration USDoI
The U.S. Department of Interior says that in support of President Donald J. Trump's America-First Offshore Energy Strategy, Interior’s Deputy Assistant Secretary for Land and Minerals Management Andrea Travnicek announced that region-wide Gulf of Mexico Lease Sale 253 generated $159,386,761 in high bids for 151 tracts covering 835,006 acres in federal waters of the Gulf of Mexico. A total of 27 companies participated in the lease sale, submitting $174,922,200 in all bids.
“We are excited about the results from today’s lease sale, which show a continued upward trend for the year. The total from today’s lease sale and the March sale is the highest since 2015 for high bids,” said Deputy Assistant Secretary Travnicek. “The Gulf of Mexico continues to be a critical part of our nation’s energy infrastructure strengthening our country through increased national security, job creation, and revenues for the American people.
Lease Sale 253 included 14,585 unleased blocks, located from three to 231 miles offshore, in the Gulf’s Western, Central and Eastern Planning Areas in water depths ranging from nine to more than 11,115 feet (three to 3,400 meters). The following were excluded from the lease sale:
(1) blocks subject to the congressional moratorium established by the Gulf of Mexico Energy Security Act of 2006, (2) blocks adjacent to or beyond the U.S. Exclusive Economic Zone in the area known as the northern portion of the Eastern Gap, and (3) whole blocks and partial blocks within the boundaries of the Flower Garden Banks National Marine Sanctuary.
“The Gulf of Mexico is the crown jewel of our nation’s energy portfolio,” said Mike Celata, director of BOEM’s New Orleans Office. “As one of the most productive basins in the world, the development of its resources are essential to the nation’s energy security.”
Revenues received from Outer Continental Shelf (OCS) leases (including high bids, rental payments and royalty payments) are directed to the U.S. Treasury, certain Gulf Coast states (Texas, Louisiana, Mississippi, and Alabama), the Land and Water Conservation Fund, and the Historic Preservation Fund.
Leases resulting from this sale will include stipulations to protect biologically sensitive resources, mitigate potential adverse effects on protected species, and avoid potential conflicts associated with oil and gas development in the region.
In addition, BOEM has included appropriate fiscal terms that take into account market conditions and ensure taxpayers receive a fair return for use of the OCS. In recognition of current hydrocarbon price conditions and the marginal nature of remaining Gulf of Mexico shallow water resources, these terms include a 12.5 percent royalty rate for leases in less than 200 meters of water depth, and a royalty rate of 18.75 percent for all other leases issued under the sale.
Lease Sale 253, livestreamed from New Orleans, was the fifth offshore sale held under the 2017-2022 National Outer Continental Shelf Oil and Gas Leasing Program. Under this program, ten region-wide lease sales are scheduled for the Gulf, where resource potential and industry interest are high, and oil and gas infrastructure is well established. Two Gulf lease sales will be held each year and include all available blocks in the combined Western, Central, and Eastern Gulf of Mexico Planning Areas.