Coatings Industry News

Main News Page


Record Gulf Offshore Lease Sale Nets Marginal Gains

Friday, March 23, 2018

Comment | More

The U.S. Department of the Interior held its latest auction of offshore oil and gas drilling leases, touted as the largest ever, on Wednesday (March 21), but garnered bids for only about one percent of the 77 million acres on offer in the Gulf of Mexico.

According to the DOI, the sale resulted in $124.7 million in high bids for a total of 815,403 acres of offshore property. The 148 tracts that were bid on will be split among 33 bidding companies, with BP Exploration & Production Inc. submitting the greatest number of high bids.

Offshore platform
Edibobb, CC-BY-3.0, via Wikimedia Commons

Lease Sale 250 resulted in bids on 148 tracts, totaling 815,403 acres.

The vast majority (138) of the tracts that will be leased received one bid; nine were subject to two bids, and one tract—in the Mississippi Canyon area due south of Biloxi, Mississippi—received three bids.

Comparison with 2017 Auction

The most recent prior lease auction, held last August, netted $121.1 million for just over 508,000 acres, split between 99 bids.

While the 2018 auction—known as Lease Sale 250—resulted in $3.6 million more in leases, and 300,000 more acres leased, the average price per acre fell from $238 per acre to about $153 per acre. The DOI was offering discounted royalty rates for shallower tracts in an effort to stimulate activity in less active parts of the Gulf.

Prices for federal offshore Gulf crude rebounded slightly in 2017 after hitting a 101-year low in 2016, averaging $38.63 per barrel that year. Analysts note that competition from offshore opportunities in Mexico and Brazil may have kept operators from bidding on more territory in the Gulf.

Analysis

"With about a 60 percent increase in acreage from August but relatively the same dollar amount and low competition, bidders got a bargain at today's lease sale,” Woods Mackenzie senior research analyst William Turner said in a statement. “Bidding activity focused on Mississippi Canyon, where operators were likely drawn to its established infrastructure and lowest cost developments in the Gulf of Mexico.

“Although we are in a climate where a lot of projects begin to make sense again in the Gulf of Mexico, operators appear to still be in a 'wait and see' mentality when it comes to exploration, looking for stability in oil prices.”

   

Tagged categories: Economy; Government; NA; North America; Offshore; Oil and Gas; Program/Project Management

Comment Join the Conversation:

Sign in to our community to add your comments.


Advertisements
 
KTA-Tator, Inc. - Corporate Office

 
Fischer Technology Inc.

 
SAFE Systems, Inc.

 
NLB Corporation

 
Safety Lamp of Houston, Inc.

 
Sidewinder/Persyst Enterprises, Inc.

 
ABKaelin, LLC

 
Tarps manufacturing, Inc.

 
DeFelsko Corporation

 
Sauereisen, Inc.

 
 
 

Technology Publishing Co., 1501 Reedsdale Street, Suite 2008, Pittsburgh, PA 15233

TEL 1-412-431-8300  • FAX  1-412-431-5428  •  EMAIL webmaster@paintsquare.com


The Technology Publishing Network

PaintSquare the Journal of Protective Coatings & Linings Paint BidTracker

 
EXPLORE:      JPCL   |   PaintSquare News   |   Interact   |   Buying Guides   |   Webinars   |   Resources   |   Classifieds
REGISTER AND SUBSCRIBE:      Free PaintSquare Registration   |   Subscribe to JPCL   |   Subscribe to PaintSquare News
MORE:      About PaintSquare.com   |   Privacy Policy   |   Terms & Conditions   |   Support   |   Site Map   |   Search   |   Contact Us