U.S. to offer 78 million Gulf of Mexico acres in 2020 lease sale

*Offshore rigs in the US Gulf of Mexico.

WASHINGTON – In support of the Administration’s America-First Offshore Energy Strategy, Department of the Interior’s Acting Assistant Secretary for Land and Minerals Management Casey Hammond and the Bureau of Ocean Energy Management (BOEM) Acting Director Dr. Walter Cruickshank announced that BOEM proposes to offer approximately 78 million acres for a region-wide lease sale scheduled for March 2020.

The sale would include all available unleased areas in federal waters of the Gulf of Mexico that are not subject to Congressional moratorium.

“Offshore energy development is about furthering America’s energy security, ensuring fair market value to the taxpayers, and producing domestic energy in an environmentally responsible manner,” said acting assistant secretary Casey Hammond. “We all benefit from a strong offshore energy program, which provides thousands of well-paying jobs, as well as affordable and reliable energy Americans need to heat homes, fuel our cars, and power our economy.”

The Gulf of Mexico Outer Continental Shelf (OCS), covering about 160 million acres, is estimated to contain about 48 billion barrels of undiscovered technically recoverable oil and 141 trillion cubic feet of undiscovered technically recoverable natural gas.

Lease Sale 254, scheduled to be livestreamed from New Orleans, will be the sixth offshore sale under the 2017-2022 Outer Continental Shelf Oil and Gas Leasing Program. Under this program, ten region-wide lease sales are scheduled for the Gulf, where resource potential and industry interest are high, and oil and gas infrastructure is well established. Two Gulf lease sales will be held each year and include all available blocks in the combined Western, Central, and Eastern Gulf of Mexico Planning Areas.

Lease Sale 254 will include approximately 14,585 unleased blocks, located from three to 231 miles offshore, in the Gulf’s Western, Central and Eastern planning areas in water depths ranging from nine to more than 11,115 feet (three to 3,400 meters).

Excluded from the lease sale are: blocks subject to the congressional moratorium established by the Gulf of Mexico Energy Security Act of 2006; blocks adjacent to or beyond the U.S. Exclusive Economic Zone in the area known as the northern portion of the Eastern Gap; and whole blocks and partial blocks within the current boundaries of the Flower Garden Banks National Marine Sanctuary.

Fiscal terms proposed for Lease Sale 254 include a 12.5% royalty rate for leases in less than 200 meters of water depth, and a royalty rate of 18.75% for all other leases issued pursuant to the sale.

“BOEM’s mission is to oversee leasing of OCS energy and mineral resources in an environmentally and economically responsible way,” said Cruickshank. “Leases resulting from this proposed sale will include stipulations to protect biologically sensitive resources, mitigate potential adverse effects on protected species, and avoid potential conflicts associated with oil and gas development in the region.”

Revenues received from OCS leases (including high bids, rental payments and royalty payments) are directed to the U.S. Treasury, certain Gulf Coast states (Texas, Louisiana, Mississippi, Alabama), the Land and Water Conservation Fund, and the Historic Preservation Fund.

All terms and conditions for Gulf of Mexico Region-wide Sale 254 are detailed in the Proposed Notice of Sale (PNOS) information package. Copies of the PNOS maps can be requested from the Gulf of Mexico Region’s Public Information Unit at 1201 Elmwood Park Boulevard, New Orleans, LA 70123, or at 800-200-GULF (4853).

The Notice of Availability of the PNOS will be available for inspection in the Federal Register on Oct. 7, 2019 and will publish in the Federal Register on Oct. 8, 2019.