Bloomberg News

ConocoPhillips Makes Highest Bid in U.S. Sale of Gulf Oil Leases

December 16, 2011

Dec. 14 (Bloomberg) -- ConocoPhillips submitted the highest bid among $337 million in the first sale of leases for oil production in the Gulf of Mexico since BP Plc’s oil spill last year, Interior Secretary Ken Salazar said.

The sale showed “great interest” among energy companies to develop tracts in the western Gulf of Mexico off Texas’s coast, Salazar said today during a New Orleans news conference. Houston-based Conoco bid $103 million to drill in a region known as Keathley Canyon. The area attracted six lower bids.

The auction drew 241 bids from 20 oil and gas companies that offered $712 million for access to offshore tracts in an area as big as South Carolina, Salazar said. The Interior Department set stricter rules for energy exploration in the Gulf after BP’s disaster, the worst U.S. marine spill.

While Salazar said U.S. oversight has been significantly improved since the spill, environmental groups sued in Washington yesterday to block the sale, saying regulators had yet to adequately consider production risks.

The companies bid on blocks in federal waters from 9 miles (15 kilometers) to more than 250 miles offshore, in depths of about 16 feet (5 meters) to more than 10,975 feet, according to the Bureau of Ocean Energy Management, a division of the Interior Department.

The agency estimates that the sale could result in production of about 222 million to 423 million barrels of oil and 1.49 trillion to 2.65 trillion cubic feet of natural gas.

--Editors: Steve Geimann, Larry Liebert

To contact the reporters on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net


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