Smallest oil lease sale ever in the Gulf of Mexico off of Texas

March sale in more popular central Gulf of Mexico brought lowest number of bids since 1986

The latest federal oil lease sale Wednesday in the western Gulf of Mexico, off the Texas coast, is another sign of the dark times that have befallen the American oil and gas industry: Five companies bid a total of less than $23 million on 33 tracts.

This is the smallest oil lease sale in the Gulf of Mexico off of Texas since the federal government began regional sales in 1983.

Gulf of Mexico

Platforms in the Gulf of Mexico.

Each tract got a single bid, and BHP Billiton Petroleum (Deepwater) Inc. made 26 of the bids.

The smallest sale in that area before Wednesday was in 1986, when $56.8 million was bid on 41 tracts.

BP Exploration and Production Inc. made a single bid. Ecopetrol America Inc. made one on its own and three together with Anadarko US Offshore Corp., and Peregrine OI7 Gas II LLC made two.

An offshore industries trade group said Tuesday that low oil prices were among factors likely to depress interest in the sale.

The last comparable lease sales in the western Gulf of Mexico brought in $109.1 million and $100.1 million.

A March sale in the far more popular central Gulf of Mexico brought the lowest number of bids since 1986. Since then, the price of U.S. crude has dropped $1.44 a barrel.

An offshore trade group said in a news release Tuesday that members looked forward to the sale “but do not anticipate jaw-dropping results.”

The National Ocean Industries Association cites low prices, uncertainty over new regulations and an upward trend in lawsuits over permits and leases.

Posted in: News

Post a Comment