The Obama administration announced today plans for lease sales for “available all unleased areas in the Central Gulf of Mexico Planning Area, offshore Louisiana, Mississippi and Alabama, including 7,276 blocks on about 38.6 million acres,” according to a Department of Interior press release.
“As part of the Obama administration’s all of the above energy strategy, we continue to make millions of acres of federal waters and public lands available for safe and responsible domestic energy exploration and development,” Secretary of the Interior Ken Salazar said in the press release. “Holding this lease sale is one of the many administrative steps we are taking, at the President’s direction, to increase U.S. production, reduce dependence on foreign oil, and incentivize early production on leases that industry holds.”
The blocks are located from three to about 230 miles offshore, in water depths ranging from nine to more than 11,115 feet (three to 3,400 meters) in the Central Gulf of Mexico, a region that BOEM estimates contains close to 31 billion barrels of oil and 134 trillion cubic feet of natural gas that are currently undiscovered and technically recoverable. The Final Notice of Sale package describes all terms and conditions for Central Gulf Lease Sale 216-222. These include a range of incentives that encourage prompt development and ensure a fair return to taxpayers, as described in a recent report by the Department of the Interior on the status of Oil and Gas Lease Utilization. These measures include escalating rental rates and tiered durational terms with relatively short base periods followed by additional time under the same lease if the operator drills a well during the initial period.
And the release also states that the Bureau of Ocean Energy Management is raising the prices: “[It] increased the minimum bid in deepwater to $100 per acre, up from only $37.50, to ensure that taxpayers receive fair market value for offshore resources and to provide leaseholders with additional impetus to invest in leases that they are more likely to develop.”
The lease sale is scheduled to take place on June 20, 2012 in New Orleans.
