BP and Shell Join in Largest Oil Auction Since 2015

BP and Shell Join in Largest Oil Auction Since 2015

An auction for drilling rights in the Gulf of Mexico, spearheaded by the Biden administration, has successfully concluded, generating US$382 million in revenues.

Oil firms such as Shell PLC (LSE:SHEL, NYSE:SHEL), Hess Corp. (NYSE:HES), BP PLC (LSE:BP.) and Chevron Corporation (NYSE:CVX) joined 22 other participants in an auction for secured offshore acreage; in what is expected to be the last auction until 2025.

These sales marked the highest total from a federal offshore oil and gas lease sale since 2015.

Anadarko, the US oil group, secured the highest bid, over US$25 million, for a block in the deepwater Mississippi Canyon area.

This auction is likely the final opportunity for oil and gas firms to bid on Gulf of Mexico acreage until 2025, due to the administration’s five-year schedule, which features a historically low number of planned lease auctions.

Industry advocates emphasised the Gulf of Mexico’s economic importance and urged Congress to mandate more leasing.

However, environmental groups criticised the prioritisation of profits over environmental concerns.

Over 72.7 million acres on the Outer Continental Shelf were part of the sale, including 6 million acres initially intended for withdrawal to protect the habitat of the Rice’s whale.

Proactive Investors, Leo Greco, December 21, 2023