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U.S. puts Gulf of Mexico oil and gas acreage up for auction

The entire region could hold as much as 48 billion barrels of technically recoverable oil.

By
Daniel J. Graeber
The U.S. government unveils what's available in the next auction for drillers looking to tap the oil and natural gas available in the Gulf of Mexico. File Photo by A.J. Sisco/UPI.
The U.S. government unveils what's available in the next auction for drillers looking to tap the oil and natural gas available in the Gulf of Mexico. File Photo by A.J. Sisco/UPI. | License Photo

July 13 (UPI) -- The U.S. government put millions of acres on the table for drillers looking to tap into the billions of barrels of oil yet to be discovered offshore.

Deputy Interior Secretary David Bernhardt said the next lease in a five-year plan includes 79 million acres off the coast of Alabama, Florida, Louisiana, Mississippi and Texas. All told, the U.S. waters of the Gulf of Mexico hold about 48 billion barrels of undiscovered technically recoverable oil and 141 trillion cubic feet of natural gas.

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"Responsibly developing our offshore energy resources is a major pillar of this Administration's energy strategy," Bernhardt said in a statement released near the close of trading Thursday.

The White House under President Donald Trump, a pro-oil former real estate mogul, said energy dominance means a U.S. economy free from pressures from foreign producers who use energy as "an economic weapon." Crude oil exports, meanwhile, could increase U.S. leverage overseas.

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A 2017 lease covering the entire southern coastal region, save for protected areas, generated $121 million in high bids for 90 tracts covering nearly 510,000 acres.

After a similar auction earlier this year, William Turner, a senior research analyst at Wood Mackenzie, said the results show the industry is still wary about making big bets. High bids totaling $124.8 million during an auction earlier this year were offered by supermajors like BP and Royal Dutch Shell, companies that have the deepest pockets.

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In March, Randall Luthi, the head of the National Ocean Industries Association, an offshore trade group, said the latest results show the U.S. offshore sector needs to assess how it can stay competitive against other regional oil producers like Brazil.

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Trump, meanwhile, has worked to unravel some of the safety measures implemented after the Deepwater Horizon oil spill in the Gulf of Mexico, one of the worst offshore spills in the history of the industry. Offshore Florida, meanwhile, has bumped up against national security and energy sector interests.

Federal estimates an average of 1.7 million barrels of oil per day from the Gulf of Mexico this year and 1.9 million bpd next year. If planned projects proceed as planned, the government said offshore production for both years would set a record.

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