ConocoPhillips submits highest bid in Gulf of Mexico sale

HOUSTON Wed Aug 28, 2013 1:35pm EDT

HOUSTON Aug 28 (Reuters) - ConocoPhillips submitted the highest bid on a single tract on Wednesday for drilling rights in the western Gulf of Mexico lease sale, which attracted the second-lowest number of bids since 1983, regulators said.

The Houston-based global exploration and production company, which operates a single oil and gas platform in the Gulf, paid $30.58 million for rights to explore and drill in a tract about 200 miles south of Galveston, Texas.

Overall, 12 companies submitted 61 bids on 53 tracts totaling $144.7 million, according to the U.S Bureau of Ocean Energy Management, which approves leases for oil and gas producers to operate in the Gulf. Of those bids, $102.35 million were high bids, while $42.3 million were unsuccessful.

The tract that ConocoPhillips won with the highest bid is nearly 60 miles northeast of Royal Dutch Shell's Perdido platform, the newest in the Gulf, which started up about three weeks before BP Plc's Macondo oil spill in 2010.

BP cannot obtain new federal contracts, including new leases in the Gulf, under a U.S. Environmental Protection Agency ban issued last November. The company was not among the dozen that submitted bids for Wednesday's sale.

Earlier this month, BP, the largest leaseholder in the Gulf and second-biggest oil producer behind Shell, sued the U.S. government in hopes of convincing a judge to lift the ban. The ban does not affect BP's existing leases.

John Rodi, regional director of the Gulf of Mexico for the Bureau of Ocean Energy Management, said on Wednesday that the "relatively low" number of bidders illustrates how companies increasingly buy fewer leases in targeted areas as technology to gauge how much oil might be there improves.

Baird Oil and Gas Research said in a note to investors that reduced bidding likely came after "artificially high" demand after the BP spill, which delayed lease sales to late 2011.

ConocoPhillips submitted the top sum of high bids in Wednesday's sale at $50.3 million, followed by Chevron Corp at $32.8 million, Maersk with $6.8 million and Shell with $4.2 million.

Anadarko Petroleum Corp had the most unsuccessful bids at $18.1 million. The company submitted $1.7 million in high bids.