Offshore lease sale seen as barometer of industry interest

FEBRUARY 8, 2013 — The Bureau of Ocean Energy Management (BOEM) said yesterday that Central Gulf of Mexico Lease Sale 227, to be held March 20, 2013, will offer 38.6 million acres offshore Louisiana, Mississippi, and Alabama for oil and gas exploration and development.

The sale, which will be held in New Orleans on March 20, 2013, includes all unleased areas in the Central Gulf of Mexico Planning Area. It will be the second sale under the Administration's new Outer Continental Shelf Oil and Gas Leasing Program for 2012-2017, and the first of five Central Gulf of Mexico lease sales that will be held under the program.

"We are seeing a very positive trend for the offshore industry in the Gulf of Mexico, and we look forward to Central Gulf sale 227," said National Ocean Industries Association (NOIA) President Randall Luthi. "It should provide a more accurate barometer of industry's interest in the region than the last Central Gulf sale, which was delayed for over a year and saw pent-up industry interest on display."

But Mr. Luthi noted that current administation policy limits exploration to just 15 percent of the outer continental shelf (OCS) through at least 2017.

"As the industry moves forward to engage in the available acreage offered in this sale, we hope the focus will remain on facilitating greater access to the 85 percent of the OCS that remains closed," he said. "Only through active exploration of these closed areas will their true resource potential become known, opening the door to new jobs, energy, and revenues to the treasury that all remain desperately needed, especially in a still struggling economy."

Lease Sale 227 encompasses 7,299 blocks 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). BOEM estimates the lease sale could result in the production of 0.46 billion to 0.89 billion barrels of oil, and 1.9 trillion cubic feet to 3.9 trillion cubic feet of natural gas.

"This sale is another important step to promote responsible domestic energy production through the safe, environmentally sound exploration and development of the Nation's offshore oil and gas resources," said BOEM Director Tommy P. Beaudreau. "The Central Gulf of Mexico is one of the bedrocks of the United States' energy portfolio."

This sale will build on a number of recent offshore lease sales – including two in 2012. Western Gulf Lease Sale 229, held in November 2012, made 20 million acres available and received high bids on tracts covering about 650,000 acres, garnering nearly $134 million in high bids. Central Gulf Lease Sale 216/222, held in June 2012, covered nearly 39 million acres, and attracted more than $1.7 billion in high bids for more than 2.4 million acres.

BOEM conducted an extensive environmental review and published a Final Environmental Impact Statement in July 2012 with analysis to support decision-making for Lease Sale 227 and other Western and Central Gulf of Mexico lease sales scheduled under the new Five Year Program. The terms of this sale include conditions to ensure both orderly resource development and protection of the human, marine and coastal environments. These include stipulations to protect biologically sensitive resources, mitigate potential adverse effects on protected species, and avoid potential conflicts associated with oil and gas development in the region.

The final terms also continue to include a range of incentives to encourage diligent development and ensure a fair return to taxpayers. In addition, BOEM has implemented a new, streamlined format for sale notices, beginning with this sale, making the document more user-friendly and accessible to the public.

Terms and conditions for the sale are available at: http://www.boem.gov/sale-227. The Notice of Availability of the Final Notice of Sale can be viewed today in the Federal Register at: https://www.federalregister.gov/public-inspection. Copies can also be requested from the Gulf of Mexico Region's Public Information Office at 1201 Elmwood Park Boulevard, New Orleans, LA 70123, or at 800-200-GULF (4853).