Offshore oil leases draw nearly $1B
GULF OF MEXICO — With oil prices up $30 a barrel from last year, energy companies issued $949.3 million in winning bids Wednesday for federal offshore petroleum leases off the coasts of Louisiana, Mississippi and Alabama.
The Minerals Management Service said 67 companies submitted 642 bids on 468 tracts in the central Gulf of Mexico.
Last year, oil was around $50 a barrel — and the sale attracted 476 bids on 348 tracts. That sale garnered $703 million in winning bids. In 2008, with oil well above $100, the sale set a record $3.67 billion in high bids.
Benchmark crude for April delivery rose $1.23 cents to settle at $82.93 a barrel Wednesday on the New York Mercantile Exchange.
Lars Herbst, the MMS regional director for the Gulf, described the auction as “a very healthy sale,” noting that the number of energy companies participating increased to 77 from 70 last year. He said that was likely due to more stable oil prices, an improving economy and the likely availability of more capital to undertake expensive drilling projects.
The sale is the another recent sign that domestic petroleum activity is picking up. In another key indicator, the domestic drilling rig count is on the upswing. Last week, 1,407 rigs were exploring for oil and natural gas in the United States — up 25 percent from a year ago — according to Baker Hughes Inc.
As with past central Gulf sales in recent years, the tracts receiving the most bids — 63 percent — were in the deepest regions of the Gulf — 1,300 feet and deeper — where deepwater drilling has taken root over the past decade in the hunt for new oil reserves.
Still, 152 bids were for tracts in shallow water of 650 feet or less, where energy companies have returned to explore for natural gas deep in the Gulf shelf. Years ago, the easy-to-reach reserves were tapped out, but new technologies are now being employed.
Combined with deepwater technology, the lifespan of the Gulf as a major energy producing region has been extended by decades, said Randall Luthi, president of the National Ocean Industries Association, an offshore trade group.
“Years ago, we said the Gulf had run out of oil and gas,” Luthi said. “We’ve exceeded that six times. The more we explore in the Gulf, the more we find.”
Four individual deepwater tracts received high bids of above $31 million. The highest was a $52.5 million bid by Anadarko E&P Co. and Mariner Energy Inc. for a tract in more than 6,500 feet of water about 330 miles south-southwest of New Orleans.
Herbst said most of the large bids for deepwater tracts came in near recent deepwater energy discoveries.
Luthi said more shallow water drilling will provide an employment boost to the energy industry along the coast, which has sustained hundreds layoffs since the economic meltdown of 2008, especially in petroleum support industries.
MMS will check the winning bids for fair market value before making them final.
To sign up for Mississippi Business Daily Updates, click here.
One Response to “Offshore oil leases draw nearly $1B”
Top Posts & Pages
- DAVID DALLAS — From Dan and Dixie with love
- BREAKING NEWS: Trustees offer new deal to Ole Miss chancellor Dan Jones
- Dan Jones rejects IHL offer, won't publicly apologize
- Law to bolster utilities’ economic development efforts gets mixed reactions
- Lawmakers: Time to raze IHL
- Developers withdraw zoning application for former country club
- DAVID WILLIAMS: Smart traffic signals pave way for better driving in connected world
- Rhythm & Blues Hall of Fame planning gets underway
- Office occupancy edged up throughout Metro Jackson