Largest Offshore Drilling Auction In U.S. History Kicks Off With $192M In Bids

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Largest Offshore Drilling Auction In U.S. History Kicks Off With $192M In Bids

As U.S. oil companies show a new brand of fiscal discipline even as oil prices continue to climb, oil companies spent nearly $192 million on drilling rights in the Gulf of Mexico on Wednesday, according to a press release from the U.S. Department of the Interior’s Bureau of Ocean Energy Management.

Wednesday’s Gulf of Mexico Lease Sale 257 brought in $191.7 million in high bids for 308 tracts covering 1.7 million acres in federal waters in the Gulf of Mexico. The money received for the tracts—including high bids and rental and royalty payments—will go to the U.S. Treasury; to the states of Texas, Louisiana, Mississippi, and Alabama; to local governments; to the Land and Water Conservation Fund; and to the Historic Preservation Fund.

Wednesday’s sales saw 33 companies participate, with $198 million in bids submitted. Lease Sale 257 offered 15,148 unleased blocks up for grabs located anywhere from three to 231 miles offshore.

It is the eighth offshore sale held under the 2017-2022 National OCS Oil and Gas Leasing Program, according to BOEM’s press release.

The interest around the sale was significant in part due to the low carbon footprint of the crude extracted from these waters, compared to the higher footprint of foreign plays or U.S. onshore wells.

The top high bidder, according to BOEM, was Chevron U.S.A, with more than $47 million in high bids spread across 34 tracts. Anadarko, BP, Shell, and Exxon rounded out the top five high bidders.

The sale generated pushback from environmentalists who chastised the administration’s foray into oil and gas lease sales despite coming fresh off the heels of COP26.

But the sale comes after a U.S. District Court issued an injunction of the Biden Administration’s suspension of oil and gas leases on federal lands. Meanwhile, the administration continues to review its leasing programs.

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