Gulf of Mexico Lease Sale Set for November

The Bureau of Ocean Energy Management (BOEM) has announced that it will hold an oil and gas lease sale for the Gulf of Mexico on November 17, in compliance with an order from a U.S. District Court.

Lease Sale 257 will include approximately 15,135 unleased blocks located from three to 231 miles offshore in the Gulf of Mexico with water depths ranging from nine to more than 11,115 feet, BOEM highlighted. The latest lease sale, which is scheduled to be livestreamed from New Orleans, will be the eighth offshore sale under the 2017-2022 Outer Continental Shelf (OCS) Oil and Gas Leasing Program, BOEM noted.

Some blocks are excluded from the sale, BOEM outlined, including those subject to the congressional moratorium established by the Gulf of Mexico Energy Security Act of 2006, blocks adjacent to or beyond the U.S. Exclusive Economic Zone in the area known as the northern portion of the Eastern Gap and whole blocks and partial blocks within the boundaries of the Flower Garden Banks National Marine Sanctuary. BOEM noted that it will include lease stipulations to protect biologically sensitive resources, mitigate potential adverse effects on protected species and avoid potential conflicts between oil and gas development and other activities and users in the Gulf of Mexico.

Fiscal terms include a 12.5 percent royalty rate for leases in less than 656 feet of water depth and a royalty rate of 18.75 percent for all other leases issued pursuant to the sale, BOEM revealed. The organization said it will be accepting bids by mail only for the lease sale and highlighted that it reserves the right to reject bids received.

In a comment posted on its website, BOEM stated that the Biden Harris Administration is continuing its comprehensive review of the deficiencies associated with its offshore and onshore oil and gas leasing programs.

Commenting on Lease Sale 257, National Ocean Industries Association (NOIA) President Erik Milito said, “the advancement of Gulf of Mexico Lease Sale 257 is welcome news for the American worker and our national security”.

“Continued safe and environmentally responsible Gulf of Mexico energy development can promote many of the top priorities of the Biden administration. The U.S. Gulf of Mexico supports more than 345,000 jobs, many of which are accessible, high-paying and cannot be easily substituted, and generates vital government revenues for conservation and recreation programs, including ones in economically distressed urban areas,” he added.

“Furthermore, as global energy prices rise, continued Gulf of Mexico leasing can help avert inflationary risks and proactively ensure affordable energy for all walks of life, especially low-income communities,” Milito went on to say.

The Gulf of Mexico OCS covers about 160 million acres and is estimated to contain around 48 billion barrels of undiscovered technically recoverable oil and 141 trillion cubic feet of undiscovered technically recoverable gas, according to BOEM. The organization notes on its website that the Gulf continues to be the United States’ primary offshore source of oil and gas, generating about 97 percent of all U.S. OCS oil and gas production. Since 2017, Gulf of Mexico lease sales have generated more than $1 trillion from offshore leasing, according to BOEM.

Part of the U.S. Department of the Interior, BOEM’s mission is to manage development of U.S. Outer Continental Shelf energy and mineral resources in an environmentally and economically responsible way, BOEM’s site shows.

Back in June, Bloomberg reported that a federal judge had ruled against the Biden administration’s temporary ban on selling new drilling rights on federal lands and waters.

An executive order from the Biden administration signed in January directed the Secretary of the Interior to pause new oil and gas leasing on public lands and offshore waters pending completion of a comprehensive review of federal oil and gas activities.

Read the latest issue of the OGV Energy magazine HERE.