63.4 F
Fort Worth
Friday, September 25, 2020
- Advertisements -
Business Oil lease sale western Gulf's lowest ever in bids, money

Oil lease sale western Gulf’s lowest ever in bids, money

Other News

Petalo, not Charmin: Virus brings Mexican toilet paper to US

By JOSEPH PISANI AP Retail Writer NEW YORK (AP) — Toilet...

Mall owners close to buying JC Penney out of bankruptcy

By ANNE D'INNOCENZIO AP Retail WriterNEW YORK (AP) — Mall owners Simon Property Group and Brookfield Property Partners are close to a...

At Home launches collection with Fort Worth connection

At Home Group Inc. (NYSE: HOME), The Home Décor Superstore, has debuted an exclusive collection with interior...

Former Toys ‘R’ Us reopens as Havertys in Southlake

HAVERTYS (NYSE: HVT and HVT.A) will officially open its new store in Southlake Corners on Friday, August 21, 2020. The 32,300 square...

NEW ORLEANS (AP) — The smallest oil lease sale ever in the western Gulf of Mexico and one of the smallest in the entire Gulf brought only five bidders Wednesday, with low oil prices limiting interest in the prospects. Most seats in a Superdome meeting room were empty as a federal energy official read the 33 bids for tracts off the Texas coast.

Each tract drew a single bid, for a total of $22.7 million. Not all bids wind up as leases: over the years, nearly 3 percent of all bids have been rejected or withdrawn.

Officials had expected interest to be down from last year because oil prices are so low, said Mike Celata, acting regional director for the Bureau of Ocean Energy Management.

U.S. crude sold for $41.63 a barrel Wednesday, less than half the price a year ago, when 14 companies offered a bit of competition: 93 bids on 81 tracts, for a total of $109.9 million in bids and $109.1 million on the 80 leases signed.

Randall Luthi, president of the National Offshore Industries Association, said another factor is uncertainty about recently proposed regulations that are likely to increase costs. Those include stronger rules proposed for equipment designed to prevent well blowouts and limits proposed Tuesday for methane emissions from oil and gas wells, he said.

Oil is a cyclical business, and recent years have seen “thousands and thousands of layoffs,” Luthi said.

Twenty-six of Wednesday’s bids were made by BHP Billiton Petroleum, an arm of BHP Billiton Ltd. which bid a total of nearly $16.3 million.

“In BHP Billiton, we believe that the Gulf of Mexico has significant remaining resource to be found,” exploration president David Rainey said in an email relayed from London.

Celata said the company’s bids show “long-term potential for oil and gas companies to do business in the Gulf of Mexico.”

Luthi said many of the tracts are in deep water, requiring at least a 10-year lease.

A March 18 sale in the far more popular central Gulf of Mexico brought the lowest number of bids since 1986. Officials said low oil prices were the reason. Since then, the price of U.S. crude has dropped more than $1.40 a barrel.

The water bottom off Louisiana, Mississippi and Alabama is about double the size of the western Gulf, Celata said. Luthi said the tracts off Texas tend to have more natural gas, which brings in less money, than those in the central Gulf.

The sale was the smallest in the western Gulf since 1983, when the Minerals Management Service, which was reorganized and got a name change after the Deepwater Horizon oil spill, began regional sales.

It’s not the smallest Gulf-wide: one off the Florida coast in 2014 and one in the central Gulf in 2001 got no bidders, and one offering about one-third as much acreage in the Western Gulf drew three bids in March 2014, with $21.3 million in high bids. Two in the eastern Gulf, where drilling is forbidden in most areas, drew more bidders but less money, $6.6 million in 2005 and $8.4 million in 2003.

- Advertisements -
- Advertisements -

Latest News

East Texas official arrested for alleged mail-in voter fraud involving 2018 Democratic primary for local seat

By Emma Platoff, The Texas Tribune Sept. 24, 2020 "East Texas official arrested for...

As part of revived federal death penalty, Christopher Vialva executed for Texas double murder

By Jolie McCullough, The Texas Tribune Sept. 24, 2020 "As part of revived federal...

Houston sampling wastewater to track spread of COVID-19By JUAN A. LOZANO Associated PressHOUSTON (AP) — Results from a program that's testing Houston's...

Justice Dept. expected to file antitrust action vs. Google

By MICHAEL BALSAMO and MARCY GORDON Associated PressWASHINGTON (AP) — The Justice Department is expected to bring an antitrust action against Google...

Texas Rangers foundation hosting voter registration, food drive on Friday

The Texas Rangers Baseball Foundation is hosting a Voter Registration and food drive event tomorrow, Friday, September 25. The...