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U.S. mulling new leases for Gulf of Mexico drillers

More than 70 million acres could be up for grabs in the next two years.

By Daniel J. Graeber
U.S. mulling new leases for Gulf of Mexico drillers
U.S. regulators seeking public input on the potential to put more acreage in the Gulf of Mexico on the auction block for energy companies. File photo by James Jones Jr./UPI

WASHINGTON, Aug. 19 (UPI) -- U.S. offshore energy regulators said they're seeking input on the potential to offer more than 70 million acres up for drilling in the Gulf of Mexico.

The U.S. Bureau of Ocean Energy Management published a notice of intent in the Federal Register for an environmental impact statement on a proposed lease scheduled for 2018.

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"BOEM proposes to offer for oil and gas leasing approximately 72 million acres," it said.

Areas excluded in the lease include a marine sanctuary and those areas beyond the U.S. economic zone. Public forums on the proposal are scheduled in Alabama, Louisiana, Mississippi and Texas through mid-September.

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With nearly all of the offshore oil and natural gas produced in the United States coming from the Gulf of Mexico, the BOEM has characterized the area as "one of the world's most prolific hydrocarbon basins."

Gulf of Mexico reserves account for 16 percent of the total oil and 4.5 percent of the total natural gas produced. Last year, as shale production in the Lower 48 states started to wane under the pressure of lower crude oil prices, the BOEM said the Gulf of Mexico was a critical component of the U.S. energy portfolio.

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A report from the U.S. Energy Information Administration found onshore declines should be offset by gains in the Gulf of Mexico in part because the offshore areas are less sensitive to short-term volatility in crude oil prices.

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Lease sales last year brought few bidders to the table, though industry leaders said the economics of Gulf exploration were more favorable than in other U.S. basins despite the low interest.

The BOEM said interested parties were invited to submit their concerns to the agency, as well as any plans for proposed oil and gas activities.

The Gulf of Mexico is expected to account for about 20 percent of total U.S. crude oil production by next year.

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