A Federal sale of offshore oil and natural gas leases in the Central Gulf of Mexico has attracted $ 2,904,321,011 in high bids, the second highest total of high bids in U.S. leasing history. The sale underscores the Gulf’s continuing importance as a vital source of domestic energy production for the Nation.
The U.S. Department of the Interior’s Minerals Management Service, which conducted Oil and Gas Lease Sale 205, received a total of 1,428 bids on 723 tracts. The sum of all bids received - losing as well as winning bids - was $ 5,245,583,944. There were 84 companies participating in this sale.
“Today’s historic sale emphasizes the Gulf’s strategic value for America’s energy security and the significant economic benefits of environmentally safe oil and gas production for the Nation and the Gulf States,” said Secretary of the Interior Dirk Kempthorne, who officially opened the sale.
“Gulf production creates jobs for American workers and generates hundreds of millions of dollars annually to help Gulf States meet the educational, environmental and infrastructure needs of their communities,” Kempthorne said. The Gulf accounts for 25 percent of domestically produced oil and 15 percent of domestically produced natural gas in the Nation, he noted. More than 30,000 jobs are directly related to Gulf energy exploration and production.
The sale offered 5,359 tracts comprising about 28.7 million acres in federal areas offshore Louisiana, Mississippi, and Alabama. Winning bids were received on 723 of those tracts. Developing these oil and gas rights in the Gulf could result in the production of 776 million to 1.3 billion barrels of oil and 3.2 to 5.2 trillion cubic feet of natural gas, according to Interior officials.
Approximately 40 percent of the tracts receiving bids in this sale are in ultra-deep water - more than 5,249 feet or 1,600 meters. The deepest tract to receive a bid is Amery Terrace, Block 206 in 3,398 meters of water. The highest bid received on a block was $ 90,488,445 submitted by Shell Offshore Inc. for Walker Ridge, Block 7.
“MMS expected the deepwater and ultra-deepwater areas of the Central Gulf to receive a high level of interest in this sale,” said Randall Luthi, Director of Interior’s Minerals Management Service. “The progress being made both in terms of discoveries and advanced technology provide incentive for operators to explore these frontier areas.”
Each high bid on a block will now go through a thorough evaluation process to ensure that the public receives fair market value before a lease is awarded.
The top five companies submitting the highest dollar amount of high bids for Sale 205:
Company: Shell Offshore Inc.
Number of High Bids Submitted: 69
Sum of High Bids Submitted: $ 554,563,223
Company: Chevron U.S.A. Inc.
Number of High Bids Submitted: 44
Sum of High Bids Submitted: $ 283,354,944
Company: Marathon Oil Company
Number of High Bids Submitted: 27
Sum of High Bids Submitted: $ 221,713,596
Company: Cobalt International Energy, L.P.
Number of High Bids Submitted: 53
Sum of High Bids Submitted: $ 211,314,797
Company: Murphy Exploration & Production Company
Number of High Bids Submitted: 26
Sum of High Bids Submitted: $ 161,054,671
The top five companies submitting the highest number of high bids for Sale 205:
Company: BP Exploration & Production Inc.
Number of Total Bids Submitted: 83
Sum of Total Bids Submitted: $ 107,069,659
Company: Shell Offshore Inc.
Number of Total Bids Submitted: 69
Sum of Total Bids Submitted: $ 554,563,223
Company: Cobalt International Energy, L.P.
Number of Total Bids Submitted: 53
Sum of Total Bids Submitted: $ 211,314,797
Company: Chevron U.S.A. Inc.
Number of Total Bids Submitted: 44
Sum of Total Bids Submitted: $ 283,354,944
Company: Nexen Petroleum Offshore U.S.A. Inc.
Number of Total Bids Submitted: 30
Sum of Total Bids Submitted: $ 113,563,384
The top five companies submitting the highest dollar amount of total bids for Sale 205:
Company: Shell Offshore Inc.
Number of Total Bids Submitted: 94
Sum of Total Bids Submitted: $ 649,999,879
Company: Chevron U.S.A. Inc.
Number of Total Bids Submitted: 90
Sum of Total Bids Submitted: $ $ 379,701,723
Company: Cobalt International Energy, L.P.
Number of Total Bids Submitted: 130
Sum of Total Bids Submitted: $ 355,115,521
Company: Marathon Oil Company
Number of Total Bids Submitted: 67
Sum of Total Bids Submitted: $ 345,094,322
Company: Petrobras America Inc.
Number of Total Bids Submitted: 55
Sum of Total Bids Submitted: $ 279,848,602
Lease Sale 205 is the second lease sale under the new Five Year Outer Continental Shelf Oil and Gas Leasing Program which went into effect on July 1, 2007. It is the first lease sale in Central Gulf of Mexico; the previous lease sale under the plan was in the Western Gulf of Mexico on Aug. 22, 2007.
