A Review of the Nigerian Energy Industry

US to award pending bids near Mexico border

Drilling rig15 February 2014, News Wires – US regulators will offer 40 million Gulf of Mexico offshore acres at a lease sale next month, including the first areas offered in a small eastern region since the 2010 Macondo disaster.

The US will also open bids for offshore blocks put on hold from the prior Sale 233 in the western Gulf area because they were within three miles of the US-Mexico maritime border, the US Bureau of Ocean Energy Management (BOEM) said Thursday.

The BOEM did not disclose how many bids were at stake, but those areas would be subject to the terms of the US-Mexico Transboundary Hydrocarbons Agreement, a treaty passed in the 2013 US budget and recently signed by President Barack Obama.

The sale will be on 19 March in New Orleans at the Mercedes-Benz Superdome.

“These lease sales underscore the president’s commitment to create jobs through the safe and responsible exploration and development of the Nation’s domestic energy resources,” Interior Secretary Sally Jewell said in a statement.

The Obama administration aims to “facilitate the orderly development” of the reserves “while protecting the human, marine and coastal environments, and ensuring a fair return to American taxpayers.”

The announcement comes as the region is seeing high levels of deep-water activity as well as a push to revitalise shallow-water fields, a decisive rebound after deep-water drilling was halted and leasing suspended in 2010 in the wake of the explosion and spill at the BP-operated Macondo well.

The central gulf offerings for Sale 231 cover 7507 unleased blocks on 39.6 million acres in the heart of the US offshore oil patch. The areas are between three and 230 nautical miles off the Louisiana, Mississippi and Alabama coasts.

Water depths range from nine to over 11,000 feet, with BOEM estimating possible production at 1 billion barrels of oil and 4 trillion cubic feet of natural gas.

The smaller Sale 225 covers 134 blocks covering 465,200 acres in the small portion of the eastern gulf opened to oil and gas exploration in 2006 as part of the Gulf of Mexico Energy Security Act.

The area was last up for bid in 2008.

Most of the eastern gulf is off-limits to explorers due to a long-standing drilling ban off Florida.

The blocks, off eastern Alabama and the Florida Panhandle, are at least 125 miles offshore and range in water depths from 2657 feet to 10,213 feet deep.

BOEM estimates the area could produce up to 71 million barrels of oil and 162 billion cubic feet of natural gas.

The full Federal Register entry for the sale can be viewed here.

US oil and gas royalties contributed $14.2 billion to federal, state and other government coffers in 2013, up 17% from 2012, the BOEM said.


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