Gulf of Mexico O&G sale: High bids and big questions
Written by Nick Blenkey
Image: BOEM
Yesterday’s Gulf of Mexico Oil and Gas Lease Sale 261 generated $382,168,507 in high bids for 311 tracts covering 1.7 million acres in federal waters of the Gulf of Mexico. A total of 26 companies participated in the lease sale, submitting 352 bids totaling $441,896,332.
The $382 million total of the successful bids was significantly up on the $252 million in winning bids reached in the previous sale in March 2023.
Clearly the U.S. Gulf of Mexico is still prime oil and gas real estate. But there are big questions on future access to it.
Yesterday’s sale was held only because Congress mandated it under the Inflation Reduction Act. Unless Congress acts again, under BOEM’s just released final 2024–2029 National Outer Continental Shelf Oil and Gas Leasing Program, there will not be another Gulf oil and gas sale until 2025.
“Despite policy headwinds, today’s sale generated the highest bid amount in nearly a decade, demonstrating that our industry is working to meet growing demand and investing in the nation’s long-term energy security,” said the American Petroleum Institute’s vice president of upstream policy, Holly Hopkins. “Just as today’s record U.S. production was supported by investment and policy decisions made years ago, new leasing opportunities are critical for maintaining American energy leadership for decades to come. Although today’s congressionally mandated lease sale is a positive step after multiple delays, the lack of any offshore sales in the year ahead is a prime example of the administration’s failure to implement a long-term energy strategy. We urge the administration to reconsider its shortsighted approach and plan today for tomorrow’s energy demand.”
The National Ocean Industry Association looks to have given up on urging the administration to rethink its approach. It wants congressional action.
In a statement following yesterday’s sale, NOIA president Erik Milito said: “We urge Congress to promptly act on and pass the numerous bicameral and bipartisan bills that enhance predictability and certainty for American offshore energy leasing. Legislation like the Offshore Energy Security Act and its House companion, the BRIDGE Production Act, provides essential solutions to fortify our nation’s energy outlook.”
