Oil companies put forward total offers of $371.9 million in the first lease sale in the Gulf of America in 2 years.
During the 10 December lease sale, coined Big Beautiful Gulf 1 (BBG1), the total of all high bids came in at $279.4 million, according to the US Bureau of Ocean Energy Management (BOEM). Of the 15,156 blocks on offer, covering about 80 million acres, 181 received bids from 30 companies, bidding singly or jointly.
BP was the apparent high bidder on 50 blocks, offering $61 million for those parcels. Woodside Energy had the second- highest amount of high bids, $38.1 million, for eight blocks, followed by Chevron, which offered high bids of $33 million for 22 blocks.
Chevron made the highest single apparent high bid for a block, offering $18.6 million for Keathley Canyon Block 25, followed by Woodside, which offered the next two apparent high bids of $15.2 million and $12.2 million for adjacent Walker Ridge blocks 443 and 444, respectively.
These top bids went to blocks that received multiple offers. Keathley Canyon Block 25, which drew the highest bid of the day, also drew bids of $11.5 million from BP and $753,000 from Shell. For Walker Ridge Block 443, Woodside beat Chevron’s offer of $1.6 million, and for Walker Ridge Block 444, Woodside topped BP’s $4.6 million and Chevron’s $1.5 million offers.
Energy companies were far more interested in deepwater blocks than the shallow-water areas. Companies submitted bids for 12 blocks in water depths under 200 m, and one block in water depths of 200 to 400 m. Fifteen blocks in 400- to 800-m water depth were bid on, while 79 blocks in water depths of 800 to 1,600 m received bids. A total of 71 blocks in water depths exceeding 1,600 m received bids.
Of the 181 blocks receiving bids, 151 had single bids, 22 had two bids, and eight had three bids. All blocks receiving multiple bids were in water depths over 400 m.
In addition to Keathley Canyon Block 25 and Walker Ridge Block 444, six other sought-after blocks received three bids: East Breaks Block 634, Green Canyon blocks 185 and 451, Mississippi Canyon blocks 345 and 504, and Walker Ridge Block 333.
The deepest block, in 3,346-m water depth, to receive a bid was Alaminos Canyon Block 600.
BOEM said it set a 12.5% royalty rate, which is the lowest rate permitted by statute, for leases in all water depths in order to promote participation in the lease sale. This is the lowest royalty rate for deepwater leases since 2007.
BBG1 is the first of 30 lease sales required to be held in the Gulf of America through 2040 under the One Big Beautiful Bill Act. Six sales are required for the Cook Inlet, the first of which is set for 4 March 2026. BBG1 was also the 136th federal offshore oil and gas lease sale to be held for the Gulf.
The Gulf accounts for around 15% of US crude oil production, and it is estimated to hold nearly 29.6 billion bbl of technically recoverable oil and 54.8 Tcf of natural gas.
While the amount of money exposed in BBG1 is lower than in the previous lease sale, Laura Robbins, acting regional director for BOEM’s Gulf of America Region, said during a press conference following the sale that companies are able to bid based on the understanding that there will be two Gulf lease sales per year for the next 15 years.
“We were setting forth a schedule of certainty in sales, and by doing that, industry knows that they can expect a sale every March and August for the next 15 years, up until March of 2040. So when you're setting that level of certainty, they know that they can come in March, they know that they can come in August. They are not pressed to have to come in all at once,” she said.
National Ocean Industries Association President Erik Milito, in a 10 December press release, called the lease sale a milestone for the country’s energy future after “2 long years” without lease sales.
"The door has reopened to the Gulf of America,” he said.
