The first lease sale for the Gulf of Mexico during President Trump’s second term drew bids worth close to $300 million, with the average price bid per acre the highest in eight years. The total, however, was $100 lower than the bids made in the last Gulf lease sale, back in 2023.
The Trump administration plans a total of 30 lease sales for offshore oil and gas, to run until 2040. The series should tap a total of 29.6 billion barrels of crude oil and 55 trillion cu ft of natural gas. This was the first in the series, aimed at advancing the president’s energy dominance agenda. Of all the acreage offered, companies submitted bids for 1.02 million acres, out of a total of 80 million offered, media reported. Per the Bureau of Ocean Energy Management, the lease sale was a success.
A total of 219 bids were made in the tender by 30 companies. Of all the locks tendered, 30 received more than one bid. The Reuters report hints these are disappointing figures but quotes a senior BOEM official as saying, “They [energy companies] are not pressed to come in all at once.”
“When you are setting that level of certainty, they know they don’t have to come all at once,” Laura Robbins, acting regional director with the Bureau of Ocean Energy Management, said as quoted by Bloomberg.
The ones that did come included BP, which topped the list of bidders with $61 million in bids, followed by Australian Woodside Energy, whose total bids stood at $38 million. The top three were completed by Chevron, which made bids worth a total of $33 million. Murphy Exploration & Production Company came in fourth, making bids worth $27.4 million.
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The issue of energy policy predictability has been problematic for oil and gas drillers, even after President Trump made energy security and dominance a priority. The reasoning goes that Trump may be in office for four years only, after which Democrats may return to the White House, reversing all the pro-oil and gas policies of the previous administration.
According to Bloomberg, the energy industry has seen the lease sale as a good sign of things to come and the series of 30 planned lease sales as a guarantee for consistency in energy policies—at least for the next three years.
“The door has reopened to the Gulf of America,” Erik Milito, the president of the National Ocean Industries Association, told Bloomberg. “Lease sales are foundational to US energy production and remain one of the most important tools to attract investment, support jobs in all 50 states, and build American energy dominance.”
Of course, not everyone is happy with these developments. “The Gulf is already overwhelmed with thousands of oil rigs and pipelines, and oil companies are doing a terrible job of cleaning up after themselves,” an activist from the Center for Biological Diversity said, as quoted by the AP.
“A lease sale is the first step toward an oil spill catastrophe,” Joseph Gordon, a campaign director with activist group, Oceana, said, as quoted by Bloomberg. “This latest offshore drilling lease was mandated by Congress in the worst environmental bill in American history, and it will recklessly open millions of acres of our ocean to drilling and spilling. We need to protect our coasts, not destroy them.”
The next lease sale in the series will take place on March 26, which, according to the NOIA’s Erik Milito, “allows companies to plan, study, and refine their bids, rather than being forced to respond to the uncertainty of a politically-driven multi-year pause” in offshore drilling tenders.
By Charles Kennedy for Oilprice.com
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