Reuters US Domestic
Dec 10 (Reuters) - BP, Chevron and Shell were among the top winners on Wednesday at the U.S. government's first sale of oil and gas drilling rights in the Gulf of Mexico since 2023.
The auction, which ended with $279.4 million in high bids, was the first of 30 mandated by U.S. President Donald Trump's tax cut and spending bill, which he signed into law in July.
The sale generated about $100 million less in high bids than the last Gulf lease sale in 2023, but oil companies bid more per acre than at any government auction in the region since 2017, according to a Reuters analysis of the sale results.
'A VERY SUCCESSFUL SALE'
The Trump administration's plans for regular offshore leasing are a significant departure from that of former President Joe Biden, whose administration had planned for a historically small number of oil and gas auctions as part of an effort to move away from fossil fuels and address climate change.
Administration officials attributed the drop in bidding from oil companies compared to the last sale, which was during the Biden era, to the predictable schedule the Interior Department was implementing.
"They are not pressed to come in all at once," Laura Robbins, acting director of the Gulf region for the U.S. Bureau of Ocean Energy Management, said at an online press conference following the sale. "We feel like this was a very successful sale."
BOEM said 30 companies submitted a total of 219 bids on 1.02 million acres, about 1.3% of the acreage offered. Just 30 blocks received more than one bid.
BP AND CHEVRON DOMINATE
BP was the most frequent bidder, according to sale documents, followed by Chevron and Shell.
The British energy giant was the apparent high bidder on 51 blocks totaling about $61.9 million.
"As today's bidding makes clear, bp will continue to invest in the deepwater Gulf of America, underscoring our commitment to expanding US energy production and delivering on bp's strategy to safely and profitably grow its global oil and natural gas business," the company said in a statement.
Other top bidders included Anadarko, LLOG Exploration Offshore, Talos Energy and Murphy Exploration & Production.
BOEM has not yet published the sale's final results.
Shell said it was the apparent high bidder on 12 blocks totaling about $16.2 million.
"This outcome reflects our continued commitment to responsibly developing the Gulf of America's world-class resources that are essential to meeting today's energy needs while building a lower-carbon future," Shell spokesperson Cynthia Babski said in an emailed statement.
The auction's highest bid was nearly $18.6 million, from Chevron, for a block in the Keithley Canyon deepwater area. The second highest was a joint bid of $15.2 million from Woodside Energy Deepwater and Repsol for a block in the Walker Ridge area.
Chevron did not immediately respond to a request for comment.
LOWER ROYALTY RATE
BOEM, an arm of the Interior Department, offered 81.2 million acres in the Gulf at a royalty rate of 12.5%, the lowest permitted by Trump's new tax law. Previously oil companies were required to pay a minimum of 16.66% in royalties.
Trump's law lowered the rate to encourage industry participation in lease sales.
Offshore production accounts for about 15% of U.S. output, but has lagged onshore shale fields in recent years because of longer timelines and higher upfront costs.
The last Gulf sale in 2023 raised $382 million, the highest of any federal offshore lease sale since 2015.
(Reporting by Nichola Groom in Los Angeles; Additional reporting by Sheila Dang in HoustonEditing by Bill Berkrot)
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