Aug 20, 2014 6:56 PM by AP
The federal government has sold more than 400,000 acres in the Gulf of Mexico off the Texas coast for oil and gas exploration and development, an official with the U.S. Bureau of Ocean Energy Management said Wednesday.
The acreage represents a fraction of the 21.6 million acres the agency had offered as part of the Obama administration's five-year program to aggressively develop resources on the Outer Continental Shelf. Previous offerings in the Western Gulf attracted buyers for about 60 million offshore acres, adding about $2.3 billion to the U.S. Treasury.
Wednesday's sales, if approved, will bring in about $110 million, the agency's Western Gulf of Mexico Deputy Director Michael Celata said.
BP PLC, which was allowed to participate in this year's sale for the first time since the Deepwater Horizon explosion and oil spill in 2010, submitted the most high bids and won 27 of the 81 tracts that sold.
Conoco Philips spent the most of the sale's 93 bidders, paying about $61 million for a single tract in the ultra-deep-water Alaminos Canyon area.
"The most interest was deep water in the Lower Tertiary, a trend that we saw in previous years," Celata said from New Orleans, where the sale was held.
The Lower Tertiary is an ancient layer of the earth's crust made of dense rock. To access the mineral resources trapped within it, hydraulic fracturing activity is projected to grow in the Western Gulf of Mexico by more than 10 percent this year, according to Houston-based oilfield services company Baker Hughes Inc., which operates about a third of the world's offshore fracking rigs.
"We expect that there will be more offshore stimulation in coming years," said Douglas Stephens, president of pressure pumping at Baker Hughes.
Within 90 days, bidders must prove their financial capacity to complete the sales, provide assurances of their continued participation and submit exploration and development plans.