Planned Gulf lease sale to open 38 million acres for drilling

09 24, 2012 by The Times-Picayune

The Obama administration announced plans Monday to auction 38 million acres of offshore oil and natural gas leases in the central Gulf of Mexico next year, the second lease sale in a year in the same area where BP's Macondo well erupted in April 2010.

The lease sale will include about 7,250 federally owned oil and gas drilling tracts between three to 230 miles off the coasts of Alabama, Louisiana and Mississippi. The areas are located in water depths of nine to more than 11,115 feet, the Bureau of Ocean Energy Management, which regulates offshore drilling and reviews each winning bid, said Monday.

Estimates indicate that the proposed sale could lead to nearly a trillion barrels of oil and almost 4 trillion feet of gas resources, according to federal regulators.

The sale, slated to be held March 20, 2013 in New Orleans, will be the second under the Obama administration's five-year, Outer Continental Shelf Oil and Gas Leasing Program, and the first of five annual central Gulf lease sales.

In June, the first oil and gas lease sale in the same area since the Deepwater Horizon exploded there two years ago, attracted more than $1.7 billion in high bids from energy companies. It put about 39 million acres -- or 7,434 tracts -- up for bid, from as close as three miles to as far as 230 miles off the coasts of Louisiana, Mississippi and Alabama.

Some of the money will make its way back to Louisiana, where it is now constitutionally required to go to coastal protection and restoration projects.

Last December, ConocoPhillips emerged as the biggest winner among energy companies trying to ramp up domestic deepwater exploration and production, placing high bids on more than a third of the available tracts off the coast of Texas in the first oil and natural gas lease sale in the Gulf of Mexico since the 2010 BP oil spill.

The lease sale attracted $337.7 million from 20 companies that submitted winning bids for 191 federally owned oil and natural gas drilling tracts across more than 21 million acres in the western Gulf.