LMOGA Statement on BOEM’s OCS Lease Sale 251

08 15, 2018 by LMOGA

“The Gulf of Mexico continues to be the nation’s premier offshore oil and gas basin and today’s OCS lease sale is an indicator of the industry’s optimistic outlook for future offshore investment and for developing our nation’s oil and gas resources. Today’s sale resulted in $178 million in high bids from 29 companies with 97% in the deepwater Gulf. While this is an increase from the previous lease sale, offshore investments are globally competitive and reducing royalty rates on deepwater leases could go a long way to boosting future Gulf activity. Royalty rates onshore and shallow water are 12.5%; however, the deepwater remains at 18.75%. The cost of drilling, exploring and producing is much higher in the deepwater and we have a tremendous opportunity to provide a level playing field when it comes to royalty rates and the competitiveness of the Gulf. Ultimately, reduced royalty rates will lead to an even greater increase in activity in the Gulf of Mexico, an increase in production, and an increase in much needed oil and gas industry jobs and will fully support the Administration’s American energy dominance.”

- Chris John, LMOGA President