The U.S. government agency Bureau of Ocean Energy Management (BOEM) is planning the first Gulf of Mexico oil and gas lease sale for 2021, which outlines all available areas in the region-wide auction.
In a statement on Tuesday, BOEM said it will offer approximately 78.2 million acres for a region-wide Gulf of Mexico lease sale scheduled for March 2021.
Lease Sale 257, scheduled to be live-streamed from New Orleans, will be the eighth offshore sale under the 2017-2022 Outer Continental Shelf Oil and Gas Leasing Program. The sale will include approximately 14,594 unleased blocks – all of the available unleased areas in federal waters of the Gulf of Mexico.
BOEM said that the Notice of Availability (NOA) of the Proposed Notice (PNOS) of Sale for Lease Sale 257 will be published on Wednesday, 18 November, in the Federal Register.
BOEM will also hold Lease Sale 256 on 18 November. This lease sale was delayed from its planned August 2020 date to allow time for additional analysis of oil and gas markets in light of the COVID-19 pandemic.
“Despite circumstances imposed by the coronavirus, we are confident that industry remains interested in acquiring new leases to support their portfolios”, said Mike Celata, Director of BOEM’s Gulf of Mexico Region.
“The Gulf of Mexico is a world-class resource area that serves a key role in our nation’s energy security”.
According to the agency, the Gulf of Mexico Outer Continental Shelf (OCS), covering about 160 million acres, is estimated to contain about 48 billion barrels of undiscovered technically recoverable oil and 141 trillion cubic feet of undiscovered technically recoverable gas.
Only blocks in the western, central, and a small part of the eastern Gulf will be offered at the sale under the current law.
Revenue received from OCS leases, including high bids, rents, and royalties support the treasuries of the Gulf Coast states of Texas, Louisiana, Mississippi, and Alabama.
Portions also go to the U.S. Treasury and two nationwide programs, the Land and Water Conservation Fund and the Historic Preservation Fund. In Fiscal Year 2020, almost $353 million in revenue from oil and gas development in the Gulf was distributed to these states and programs.
BOEM noted it has included fiscal terms that take into account market conditions and ensure taxpayers receive a fair return for use of the OCS.
These terms include a 12.5 per cent royalty rate for leases in less than 200 meters of water depth, and a royalty rate of 18.75 per cent for all other leases issued pursuant to the sale, in recognition of current hydrocarbon price conditions and the marginal nature of remaining Gulf of Mexico shallow water resources.