In the first auction for offshore drilling rights in the Gulf of
Mexico's (GoM) prolific central region following the Deepwater
Horizon rig disaster, the federal government attracted billions of
dollars in bids. According to the U.S. Interior Department's Bureau
of Ocean Energy Management - which oversees offshore drilling - the
lease sale collected more than $1.7 billion from oil and gas
companies.
Energy majors
Royal Dutch Shell Plc
(
RDS.A
),
StatoilHydro ASA
(
STO
) and
BP Plc
(
BP
) came out as the biggest spenders in the latest round of auction
that put 39 million acres of prospective oil/gas development spread
over 454 federally owned tracts in the central Gulf - generally
regarded as the most promising area for drilling - up for sale. In
all, the bureau received nearly 600 bids submitted by 48
companies.
The three firms mentioned above shelled out a total of almost $1
billion to get hold of 93 leases. In particular, Norway's Statoil
set a new record by offering $157 million - the highest since 1983
- for a single tract in the central Gulf's Mississippi Canyon area,
located south of Louisiana's coastline.
The winning bids - worth $1.74 billion - are more than five
times the roughly $340 million received in the previous federal
sale (for the less-developed western part of the Gulf) in December
2011.
The offers will now be reviewed by the Bureau of Ocean Energy
Management with the agency carrying out its own independent
verification prior to actually awarding any leases. The successful
names will be announced within 90 days following which the
department will analyze the proposals before issuing drilling
permits.
The strong response to the recent auction has been heralded as a
sign of the central GoM's attractiveness to Western oil companies
and the region's renaissance since the oil spill, which slowed down
new offshore leases for deepwater drilling.
As a reminder, on April 20, 2010, offshore driller
Transocean Ltd
's (
RIG
) ultra-deepwater Horizon drilling platform, contracted to BP, sank
following an explosion while operating in the U.S. GoM off the
coast of Louisiana.
The incident killed 11 workers and spewed more than 200 million
gallons of crude in what is touted as the country's worst oil spill
ever. Subsequently, a moratorium was imposed on offshore drilling
at water depths of more than 500 feet in the region, which was
lifted on October 12, 2010.
This badly dented activity in the Gulf. However, current
exploration successes and enthusiasm about future prospects has
driven demand for acreage in the region, as reflected by the
tremendous response to the latest round of auction.
Moreover, energy outfits are now more confident about complying
with the strict safety and environmental requirements for offshore
operations that have been imposed in the aftermath of the BP oil
spill.
BP PLC (BP): Free Stock Analysis Report
ROYAL DTCH SH-A (RDS.A): Free Stock Analysis
Report
TRANSOCEAN LTD (RIG): Free Stock Analysis
Report
STATOIL ASA-ADR (STO): Free Stock Analysis
Report
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