GOM Lease Sale Set for November
Last year’s GOM auction received high bids on just 93 blocks. Higher oil prices could attract bidders back to the planned lease sale.
The Bureau of Ocean Energy Management (BOEM) will hold a US Gulf of Mexico (GOM) oil and gas lease sale on 17 November in compliance with an order from a US District Court. The sale will go forward as the Biden administration continues its comprehensive review of the deficiencies associated with its offshore and onshore oil and gas leasing programs. Biden had aims to suspend future oil and gas leasing on federal lands, but his pause of future auctions announced in January was blocked by a federal court after several states sued the administration.
GOM leasing has not been as robust in recent years as it had been prior, however oil prices hovering around $75/bbl could provide a spark for increased activity. Last year’s GOM Sale 256, also held in November, was a mostly quiet affair, attracting $120.8 million in high bids on just 93 blocks.
Lease Sale 257, to be held in New Orleans, will be the eighth offshore sale under the 2017–2022 Outer Continental Shelf (OCS) Oil and Gas Leasing Program. Sale 257 will include approximately 15,135 unleased blocks located from 3 to 231 miles offshore in the GOM with water depths ranging from 9 to more than 11,115 ft.
Among the blocks excluded from the lease sale are the blocks subject to the congressional moratorium established by the Gulf of Mexico Energy Security Act of 2006; blocks adjacent to or beyond the US Exclusive Economic Zone in the area known as the northern portion of the Eastern Gap; and whole blocks and partial blocks within the boundaries of the Flower Garden Banks National Marine Sanctuary as of the July 2008 Memorandum on Withdrawal of Certain Areas of US OCS from Leasing Disposition.
The GOM OCS, covering about 160 million acres, is estimated to contain about 48 billion bbl of undiscovered technically recoverable oil and 141 Tcf of undiscovered technically recoverable gas.
Fiscal terms include a 12.5% royalty rate for leases in less than 200 m of water depth and a royalty rate of 18.75% for all other leases issued pursuant to the sale.
BOEM will be accepting bids by mail only for Sale 257. Walk-in delivery of bids will not be permitted. BOEM reserves the right to reject bids received.