Trump administration opens up largest Gulf of Mexico leasing area in history
The Trump administration said Tuesday that it will sell leases for some 77 million acres in the Gulf of Mexico for oil and gas drilling, the largest sale of offshore leases in U.S. history.Major oil companies have cut back on their Gulf activities because they can produce shale wells much cheaper and with less risk. The large offering fits with the administration's goal of making US energy production dominant in world markets. The size of the available lease area may attract some companies to prospects that have been off limits in the past.
Interior Secretary Ryan Zinke said the sale, scheduled for March, would open an area the size of New Mexico to drilling, including all unleased areas on the Gulf's outer continental shelf. The Gulf's outer continental shelf is estimated to hold recoverable reserves of more than 48 billion barrels of oil and 141 trillion cubic feet of gas.
The sale would come as the offshore sector continues to struggle and oil exploration and production companies focus investments on lower cost shale fields onshore, particularly the Permian Basin in West Texas. Both Exxon Mobil and Chevron, for example, have spent billions to acquire and develop land in the Permian, one of the nation's most productive shale plays.