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BOEM reinstates US Gulf of Mexico Lease Sale 257 according to recent agreement

Highlights

Sale had 307 valid high bids worth nearly $190 million

Auction results invalidated by federal judge in February

IRA's stipulations include environmental protections

  • Author
  • Starr Spencer
  • Editor
  • Aastha Agnihotri
  • Commodity
  • Energy Transition

In keeping with the US' recently approved Inflation Reduction Act, the federal Bureau of Ocean Energy Management has accepted 307 highest valid bids from that agency's Lease Sale 257 in the Gulf of Mexico totaling $190 million, BOEM said Sept. 14.

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BOEM held the sale in November 2021 although a federal judge had invalidated the results last February – the result of a lawsuit brought by a number of environmental groups that claimed the government had failed to properly consider climate change impacts of the auction.

The Inflation Reduction Act mandates that leases from Sale 257 include stipulations aimed at safeguarding the environment, as well as biologically sensitive resources, and also mitigate potential negative effects on protected species.

The biggest Sale 257 winners were ExxonMobil for the largest number of high bids (94, totaling nearly $15 million, all offshore Texas), and Chevron, for the total value of high bids – $47 million for 34 high bids.

Other high bidders in the sale included BP with 46 high bids valued at $29 million, Occidental Petroleum with 30 high bids valued at $39 million and Shell Offshore with 20 high bids valued at $18 million.

Oxy made two largest bids

Oxy offered the single highest two bids in the auction – $10 million for a block in remote Alaminos Canyon in the far southwest US Gulf, and $6 million for a block in the prolific Green Canyon producing area offshore Louisiana. The tracts were in water depths between 800 and 1,600 meters.

Chevron offered the third-highest and fourth-highest bids – $4.4 million and $4.3 million for respective bids in Mississippi Canyon, also offshore Louisiana in similar water depths, and also remote Walker Ridge in the far southern US Gulf, in water depths deeper than 1,600 meters.

Shell had the fifth-highest bid, $4 million for a lease in Atwater Valley – an area farther offshore eastern Louisiana, Mississippi and Alabama.

Other top-ten highest bids were placed by BHP Billiton (now known as Woodside Energy) and large privately held deepwater operator LLOG Exploration.

US President Joe Biden signed the massive IRA in August, paving the way for $370 billion in energy security and climate change spending over the next 10 years. The measure aimed at spurring innovation in clean energy and reducing greenhouse gas emissions.