Gulf of Mexico oil, gas sale watched close

11 27, 2012 by UPI

U.S. government and industry officials said a lease for oil and natural gas acreage in the western Gulf of Mexico likely won't set investment records.

On Wednesday, New Orleans hosts Western Gulf of Mexico Lease Sale 229, announced by the U.S. Department of Interior in October. Up for auction are 141 blocks, compared to the 626 put up for sale in December 2011.

John Rodi, regional director for the U.S. Bureau of Ocean Energy Management, told the Platts news service that the December lease was an anomaly, however, as it was the first such sale since the 2010 oil spill in the Gulf of Mexico.

The U.S. government placed a ban on work on the Gulf of Mexico following the sinking of the Deepwater Horizon oil rig. That incident left 11 rig workers dead and led to the worst offshore oil accident in history.

Randall Luthi, president of the National Ocean Industries Association, told Platts that Wednesday's sale wouldn't be "record-breaking" though it could serve as an indication for renewed interest in the region.

The U.S. Bureau of Ocean Energy Management estimated the lease sale could lead to the production of more than 116 million barrels of oil and more than 538 billion cubic feet of natural gas.