Feds sell nearly 1 million acres for Gulf offshore drilling

Federal officials brought in $539 million in high bids Wednesday for the rights to drill for oil and natural gas in almost 1 million acres in the Gulf of Mexico.

The auction in New Orleans resulted in leases of 169 drilling tracts from 42 companies, the seventh offshore oil and gas auction under the Obama administration’s 2012-2017 offshore drilling plan.

{mosads}Abigal Hopper, director of the Interior Department’s Bureau of Ocean Energy Management (BOEM), which oversaw the auction, said the sale shows strong interest in offshore drilling despite the six-year low in oil prices worldwide.

“As one the most productive basins in the world, the Gulf of Mexico continues to be the keystone of the nation’s offshore oil and gas resources,” Hopper said in a statement.

“The recent drop in oil prices and continued low natural gas prices obviously affect industry’s short-term investment decisions, but the Gulf’s long-term value to the nation remains high,” she said.

Nonetheless, the 195 bids submitted were the lowest from a single sale since 1986.

In total, the auction offered 41.2 million acres of drilling rights, located three to 230 nautical miles from the shores of Louisiana, Mississippi and Alabama.

The areas leased could yield up to 890 barrels of oil and 3.9 trillion cubic feet of natural gas, BOEM said.