A Federal sale of offshore oil and natural gas leases in the Central Gulf of Mexico attracted $2,904,321,011 in high bids today, the second highest total of high bids in U.S. leasing history, according to U.S. Department of the Interior’s Minerals Management Service.
The sale, the first to include the Central Gulf of Mexico, offered 5,359 tracts comprising about 28.7 million acres in federal areas offshore Louisiana, Mississippi and Alabama. The sum of all bids received, including the losing bids, was $5,245,583,944.
The MMS predicts development of oil and gas on those tracts could lead to the production of 776 million to 1.3 billion barrels of oil and 3.2 to 5.2 trillion cubic feet of natural gas.
The Gulf of Mexico accounts for 25 percent of domestic oil and 15 percent of natural gas. This sale represented a significant move toward the east
There were 84 companies participating in the sale, with Shell making the most bids. The company said in a statment it bid on 94 blocks and committed approximately $650 million, although the winning Shell bids totaled approximately $554 million. Thirty-two of the blocks that Shell bid on were unopposed and 62 had competing bids.
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.
“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 an evaluation process to make sure it represents a fair market value.
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.
The top five companies submitting the highest dollar amounts:
* Shell Offshore Inc., 69 high bids submitted for $554,563,223
* Chevron U.S.A. Inc., 44 high bids submitted for $283,354,944
* Marathon Oil Company, 27 high bids submitted for $221,713,596
* Cobalt International Energy, 53 high bids submitted for $211,314,797
* Murphy Exploration, 26 high bids submitted for $161,054,671
The top five companies submitting the highest number of high bids :
* BP Exploration, 83 high bids submitted for $107,069,659
* Shell Offshore, 69 high bids submitted for $554,563,223
* Cobalt International, 53 high bids submitted for $211,314,797
* Chevron, 44 high bids submitted for $283,354,944
* Nexen Petroleum Offshore, 30 high bids submitted for $113,563,384