The Bureau of Ocean Energy Management (BOEM) announced last week that it will hold a lease sale of 73.3 million acres for oil and gas in the Gulf of Mexico on March 29, 2023.
Approximately 13,600 blocks in the Western, Central, and Eastern Planning Areas of the US Outer Continental Shelf, will be offered. The lease sale will be accessible through www.boem.gov.
As the Final Notice of Sale (FNOS) indicates, the lease sale is specifically for oil and gas exploration and development.
BOEM's informed that proposed economic terms encourage diligent development while ensuring fair market value for taxpayers and maintaining compliance with the Inflation Reduction Act (IRA).
All bids must be received by BOEM by mail only through any package delivery service by the bid submission deadline of the 10:00 a.m., Central daylight time, on March 28, 2023.
The first auction in this rich oil and gas since 2021
Reuters published that this auction is the first in this oil-rich area since 2021 and complies with a provision of President Joe Biden's Inflation Reduction Act (IRA), which requires the government to lease federal land for oil and gas development.
"The auction will test investment demand from the industry in the Gulf after the Russian invasion of Ukraine a year ago increased pressure on the administration to increase domestic oil and gas supplies."
Next lease sale, in September
The Inflation Reduction Act requires another offshore lease sale by September 30, however, offshore producers have called for regular leasing to resume to provide more predictability to their ability to operate in the Gulf.
But additional lease sales cannot take place until president Joe Biden’s administration finalizes a new lease plan for 2023-28, Argus Media reported.
Oil industry groups filed a lawsuit last month asking a federal court to set a September 30 deadline for the Biden administration to end the five-year lease plan. Industry officials are urging the administration to reject the no lease put option, Argus Media quoted in its post.
"Stopping new leases on US federal lands or waters would harm communities that depend on offshore production," American Petroleum Institute senior vice president Frank Macchiarola said at an industry event this week in Canada, quoted by Argus.
"It is also likely to cause volatility in global energy markets”, he added.
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