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US unveils Gulf of Mexico lease sale

The Department of Interior is planning its second lease sale in the western Gulf of Mexico since the 2010 Macondo blowout

On offer are 3,873 blocks covering 20.8 million acres, in water depths ranging from 16 feet to more than 10,975 feet. Bids close on 28 November in New Orleans.

Sale 229 will be the first under the new outer continental shelf oil and gas leasing programme, a five-year plan which makes available offshore areas with the highest conventional resource potential, according to Bureau of Ocean Energy Management (BOEM). The areas included in the 2012-2017 leasing plan are believed  to hold about 75% of the US’s undiscovered resource potential. BOEM estimates that development of the acreage could result in the production of 116 to 200m barrels of oil and 538 to 938 billion cubic feet (cf) of natural gas.

The latest sale sees activity in the Gulf of Mexico, which came to a standstill after the April 2011 Macondo disaster, gather pace. The most recent sale in the western Gulf took place on 14 December 2011, when the BOEM awarded 181 leases on tracts covering 1.04m acres. Accepted high bids reaped $324.97m for government coffers.

In June 2012, a sale of 39m acres off Louisiana, Mississippi and Alabama raised $2.6 billion. With interest running high, the next central Gulf sale will take place on 20 March 2013, when a further 38m acres will go on the block.

Even as it faces criticism for failing to make public lands available to oil companies, the Obama administration was touting the success of its energy policies. The sale closes two weeks after the 6 November presidential elections.

According to the Bureau of Safety and Environmental Enforcement, US officials have granted 90 new permits so far in 2012 to drill in water depths greater than 500 feet, the highest level of permitting since 2007. According to Wood Mackenzie, a consultancy, operators will spend about $20bn to drill development wells over the next three years, with a further $70bn expected to be spent on exploration by 2030.

“The president’s commitment to a comprehensive, all-of-the-above energy strategy is creating jobs here at home while reducing our dependence on foreign oil,” said Interior secretary Ken Salazar. “Exploration and development of our Western Gulf’s vital energy resources will continue to help power our nation and drive our economy.”

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