BATON ROUGE — Louisiana Mid-Continent Oil & Gas Association (LMOGA) remains confidently optimistic on the future of the Gulf of Mexico after today’s OCS Lease Sale 252 which included 78 million acres in the Western, Central, and Eastern planning areas of the Gulf.
In today’s fiscal environment the offshore lease sale is an indicator of our offshore industry and we are pleased with today’s positive outcome as compared to the prior lease sale in August 2018. It demonstrates our industry’s continued interest and investments in the Gulf.
Today’s lease sale resulted in a 37% increase in the total sum of the high bids submitted as compared to the August 2018 Gulf of Mexico lease sale. While the August 2018 lease sale resulted in $178 million in high bids, today’s high bids came in at approximately $244 million. The majority of today’s bids are in the deepwater Gulf of Mexico as compared to the shallow water, which further indicates the tremendous growth of deepwater activity. As compared to the August 2018 lease sale, the number of deepwater bids increased by approximately 80% while shallow water bids decreased by 25%.
LMOGA has supported the Administration’s efforts to reduce offshore regulatory burdens without sacrificing safety or environmental protection. Louisiana has demonstrated we can produce the energy to fuel America while also maintaining the best hunting, fish and outdoor wildlife activities. BSEE’s regulatory reform initiatives are ensuring the Gulf of Mexico remains a cost-effective and competitive basin as oil and gas companies have options to invest anywhere in the world. As such, LMOGA fully supports a continued effort by the U.S. Department of Interior to consider royalty rate adjustments throughout the Gulf.
The Gulf of Mexico remains a strong energy province for our country, contributing approximately 17% of our nation’s crude oil and 5% of our natural gas supply. This production is a critical component to ensuring the United States remains energy dominant for many years to come. The Gulf of Mexico is a prominent energy basin considering 99% of all OCS energy produced in the United States is from the Gulf.