Offshore GOM oil auction expected to attract little interest

On Aug. 19, when the US federal government sells drilling rights in the Gulf of Mexico, interest is expected to be low as a result of the oil price collapse, among other factors, according to Fuel Fix.

Just five oil and gas companies submitted sealed bids for western Gulf of Mexico acreage, bidding on a combined 33 tracts – compared to 14 companies vying for 81 tracts in August 2014. This year’s sealed bids will be opened during an Aug. 19 auction in New Orleans, Louisiana.

Other factors contributing to the low bidding participation include low commodity prices, uncertainty over new regulations, and increasing litigation over offshore energy development. Fuel Fix also notes that the western Gulf of Mexico is less attractive than the central Gulf planning area, as it is offering just 137 blocks (out of the  4,083 blocks that are technically available) as being newly relinquished by their leaseholders.

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