Renewed interest in offshore drilling in Gulf of Mexico
Major oil producers pushed up high bids at a Gulf of Mexico offshore auction to $121 million on Wednesday, a nearly seven-fold increase from a year ago, as their return to deep water exploration gained momentum.The oil recovery continues to expand and is no longer mainly focused on the Texas Permian Basin. This is good news for both Louisiana and Texas offshore operations.
This compared with $18 million in high bids at the Bureau of Ocean Energy Management's (BOEM) Outer Continental Shelf auction last summer.
Winners will be announced after a 90-day review.
Some producers have signaled that they expect Gulf of Mexico projects to become more profitable now that they have trimmed operations to adapt to low oil prices. Offshore drilling typically requires higher prices for producers to break even.
Royal Dutch Shell claimed the largest number of blocks, with 19 high bids valued at a combined $25.1 million. Chevron Corp followed with 15 high bids totaling $27.9 million. Anadarko Petroleum Corp won 10 blocks for $10.6 million. Exxon Mobil Corp took seven blocks of land for $20.4 million.