US to offer new Gulf of Mexico oil leases

Oct 29, 2001 01:00 AM

The US government will open bids Dec. 5 on the first offshore oil and natural gas lease sale in the eastern Gulf of Mexico since 1988, Interior Secretary Gale Norton said. The sale, opening an area covering 1.47 mm acres of ocean floor to drilling, was first announced in July.
Bids on 256 "blocks" that are each 9 square miles within the lease sale area will be opened at 10 a.m. EST Dec. 5 in New Orleans and announced. The silent bids must be submitted in sealed envelopes by Dec. 4. The leases are for 10 years but drilling must begin within five years under the terms of the offering. The minimum bid is $ 37.50 per acre.

The area, known as Lease Sale 181, originally covered 5.9 mm acres when first proposed by the Clinton administration in 1997. The sale areas originally came as close as 17 miles to Pensacola in Florida's Panhandle. But the Bush administration shrunk the acreage after protests from Florida Gov. Jeb Bush and Florida's tourist industry and environmentalists.
The new lease area begins 285 miles west of Tampa and would be at least 138 miles from Panama City, Florida. Its closest proximity to shore is 64 miles from Venice, Louisiana. The government estimates that the reduced lease area contains at least 185 mm barrels of oil and 1.25 tcf of natural gas.

Interior officials said they expect the auction to raise $ 136 mm. Since 1982, the government has collected $ 110.4 bn in royalties and fees from its oil leases. Drilling could begin in as little as two years, officials said. Public hearings on the department's oil and gas leasing program are scheduled for Dec. 3-7 in Alaska; Dec. 10 in Houston; Dec. 11 in New Orleans; and Dec. 12 in Mobile, Alaska.

Source: AP Online
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