Low interest in Gulf of Mexico energy auction

NEW ORLEANS, Aug. 19 (UPI) -- Though only five energy companies submitted bids for new acreage in the U.S. Gulf of Mexico, the industry said offshore interest was an economic priority.

Five companies -- Anadarko Petroleum, BHP Billiton, BP, Peregrine Oil and Gas, and Ecopetrol America Inc. -- were bidders for new acreage opened up in the U.S. Gulf of Mexico by the Bureau of Ocean Energy Management.

The lease covers new territory in the western waters of the Gulf of Mexico, where waters range from 16 feet to more than 10,975 feet deep. Wednesday's lease, held in New Orleans, is the eighth such sale under a five-year offshore strategy. The first seven brought in more than $2.9 billion in revenue from bids.

Output from the Gulf of Mexico has remained resilient, though many oil and gas companies are cutting their exploration and production budgets as oil prices continue to trade in a bear market.

Randall Luthi, head of the National Ocean Industries Association, said low interest in the latest lease was expected, but the economics of gulf exploration remained resilient despite the market downturn.

"[We] do not anticipate jaw-dropping results under current conditions," he said in a statement.

Nevertheless, he said any interest at all means more jobs and revenue during the oil depression.

The U.S. Interior Department in February released its draft proposal for 2017-22 for access to federal waters. Ten leases are planned for the Gulf of Mexico, three for offshore Alaska and one, a debut, for waters in the Atlantic.