New swath of Gulf opens to oil and gas drilling

10 17, 2014 by Daily Comet

About 44 million acres in the Gulf of Mexico will be opened to oil and gas drilling early next year, federal officials said today.

Bids will be accepted March 18 at the Superdome in New Orleans from companies interested in drilling on about 7,500 sections of Gulf waters off Louisiana, Mississippi and Alabama.

The Bureau of Ocean Energy Management said it is the seventh Gulf lease sale under the Obama administration’s lease program, which began 2012 and will continue through 2017.

“As one of the most productive basins in the world, the Gulf of Mexico is a cornerstone of our domestic energy portfolio, offering vital oil and gas resources that further economic growth and continue to reduce our dependence on foreign oil,” the agency’s acting director, Walter Cruickshank, said in a news release.

The waters stretch from three to 265 miles off the coast in the central Gulf, and depths run to 11,000 feet. Some of the leases are within three miles of the Unites States’ nautical border with Mexico.

Waters along the border are being opened for the first time under agreements reached last year between the two countries. LSU economists released a report Tuesday that cites the newly opened waters as one reason the Houma-Thibodaux economy is expected to net about 4,500 new jobs through 2016.

The pact “will open up whole new sections of the Gulf that were off limits before,” the report says. “More availability means more exploration and more service work for firms out of the Houma area.”

The report also notes that about 95 percent of all new oil and gas projects in the Gulf are expected to use Port Fourchon, already a hub for the vast majority of activity offshore, as a service base.

The new areas up for lease in March could yield up to 894 million barrels of oil and 3.9 trillion cubic feet of natural gas, the Bureau of Ocean Energy Management says.

The Obama administration program has sold drilling rights on more than 60 million offshore acres for a combined 2.4 billion during the six previous lease sales. The last lease sale in the western Gulf in August drew $110 million in high bids for 81 tracts off the Texas coast.

Louisiana oil interests said they are pleased by the new lease sale.

“The central Gulf is a powerhouse for oil and gas production, producing a significant portion of the $5 to $8 billion in offshore revenues generated off Louisiana’s coast each year,” said Lori LeBlanc, offshore committee director for the Louisiana Mid-Continent Oil and Gas Association.

“While we anticipate continued strong investments in our nation’s offshore resources,” she added. “It is critical that the administration develops and maintains policies and regulations that provide consistency, clarity, and predictability to take full advantage of the Gulf’s potential.”