Five oil and gas companies placed bids on 33 bids on 33 tracts off the coast of Texas.
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August 19 A U.S. government sale of oil and gas drilling leases in the western Gulf of Mexico attracted the lowest number of bids on record on Wednesday as slumping oil prices kept producers from plowing money into expensive offshore prospects.
Lease Sale 248 offers all unleased and nonprotected areas in the Western Gulf of Mexico Planning Area, including 4,083 tracts from nine to more than 250 miles off the coast, in water depths ranging from 16 to more than 10,975 feet (five to 3,346 meters).
Each tract drew a single bid, for a total of $22.7 million.
“The continuing drop in oil prices and low natural gas prices obviously affect industry’s short-term investment decisions”, BOEM Director Abigail Ross Hopper said in a statement, also stressing the long term potential of Gulf of Mexico oil and gas production.
Five companies – Anadarko Petroleum, BHP Billiton, BP, Peregrine Oil and Gas, and Ecopetrol America Inc.
The last two comparable lease sales in the western Gulf of Mexico brought $109.1 million last year and $100.1 million in 2012.
Randall Luthi, head of the National Ocean Industries Association, said low interest in the latest lease was expected, but the economics of gulf exploration remained resilient despite the market downturn. Oil prices slumped to $40.77 per barrel in futures trading Wednesday morning – the lowest level since March 2009 and down from $92 a year ago. The first seven brought in more than $2.9 billion in revenue from bids.
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An offshore trade group said in a news release Tuesday that members look forward to the sale “but do not anticipate jaw-dropping results”.
