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Energy

Interior To Hold Oil, Gas Lease Sale

by Glenn Hess
August 29, 2011 | APPEARED IN VOLUME 89, ISSUE 35

The Interior Department says it will resume selling leases for offshore oil and natural gas drilling in the Gulf of Mexico for the first time since last year’s BP rig explosion unleashed the worst maritime oil spill in history. The proposed sale, to be held on Dec. 14 in New Orleans, will include all available areas in the western Gulf—about 3,900 blocks covering approximately 20.6 million acres—off the coast of Texas. The blocks are between 9 and 250 miles offshore, in water depths ranging from 16 to more than 10,975 feet. Officials estimate the sale could eventually result in the production of up to 423 million barrels of oil and 2.65 trillion cu ft of natural gas. The Interior Department says it will charge a minimum of $100 per acre for the right to explore in water depths greater than 1,312 feet. The minimum bid for deepwater leases in previous sales was $37.50 per acre. The American Petroleum Institute, a trade group, welcomed the sale but questioned the price increase. “We are hopeful that this does not discourage investment in these vital domestic resources,” says API Upstream Director Erik Milito.

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