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Offshore drilling is expensive in a time of relatively low oil prices.
Offshore drilling is expensive in a time of relatively low oil prices.

US Sets Largest Offshore Oil, Gas Lease Auction

US Sets Largest Offshore Oil, Gas Lease Auction

The US administration on Friday said it would offer the largest oil and gas offshore auction in the country's history on March 21 for areas in federal waters off the Gulf Coast of Mexico, less than a year after a similar sale yielded little corporate interest.
The Interior Department said it would offer 77.3 million acres (31.3 million hectares) offshore Texas, Louisiana, Mississippi, Alabama and Florida for oil and gas development, an auction that includes all available unleased areas in the Gulf of Mexico, Rigzone reported. 
The blocks are from 3 to 231 miles (5 to 372 km) offshore and in waters 9 to 11,115 feet (3 to 3,390 meters) deep.
The department announced the auction in October, without an exact date. The sale is in support of US President Donald Trump's so-called America First Offshore Energy Strategy, which aims to reduce energy imports and boost jobs in the industry.
But offshore drilling is expensive in a time of relatively low oil prices held in check partially by plentiful supplies of onshore petroleum, which is cheaper to produce.
A lease sale in August last year got a tepid response from oil companies. The offer of 73 million acres received $121.14 million in high bids for 90 tracts covering 508,096 acres (205,619 hectares). Bureau of Ocean Energy Management Spokesman John Filostrat has said that Interior Department hopes for "a healthy number of bids, more so than we did in August".

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