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Gulf Oil Lease Sale Set, First Post-Spill

Fri, 08/19/2011 - 8:33am
Reuters

HOUSTON | (Reuters) - The first Gulf of Mexico oil lease sale since the BP Plc Deepwater Horizon spill will be held December 14 in New Orleans, the government announced Friday.

Sale 218 will offer all unleased acreage in the western Gulf - a total of 20.6 million acres - out to waters as deep as 10,975 feet, Interior Secretary Ken Salazar said.

The 3,900 blocks on offer will extend from 9 miles to 250 miles offshore, a news release said.

Eleven workers died in the April 2010 blowout and fire that triggered the largest U.S. marine oil spill in history. The spill also led to a government-imposed moratorium on leasing and drilling offshore.

"Since Deepwater Horizon, we have strengthened oversight at every stage of the oil and gas development process," Salazar said. "Exploration an development of our western Gulf's vital energy resources will continue to help power our nation and drive our economy.

The director of the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), Michael Bromwich, added, "The decision to hold this sale was made after careful analysis of the best scientific information available and consideration of all public comments received."

New bid terms require companies interested in leasing blocks in waters 1,312 feet and deeper to pay more - a minimum of $100 per acre. The minimum deep water bonus previously was $37.50.

The minimum bid for shallower depths will remain $25, BOEMRE said. The increased minimum bid for deep water is based on a study indicating leases awarded at less than $100 per acre in waters 1,312 feet or deeper experienced little development.

"BOEMRE is proposing this increase in an effort to ensure that areas with the greatest resource potential are developed, and to decrease the amount of leased acreage that is warehoused and goes unexplored," Bromwich said.

The Independent Petroleum Association of America welcomed the news but urged speedier development of domestic energy.

The National Resources Defense Council is opposed and, with Earth Justice and other groups, has sued to overturn BOEMRE's recent approval of a Shell drilling plan for the Gulf.

"I think it's unsafe to resume lease sales in the Gulf," said David Pettit, senior attorney with NRDC.

Reporting by Bruce Nichols and Kristen Hays

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