October 24, 2017 / 6:23 PM / 2 years ago

U.S. Interior Dept. sets Gulf of Mexico oil, gas lease auction for March

HOUSTON (Reuters) - The U.S. Interior Department said it will hold its largest offshore auction to date, nearly 77 million acres, to energy companies in March 2018 to conduct oil and gas development.

The proposed lease of offshore Texas, Louisiana, Mississippi, Alabama and Florida blocks continues U.S. President Donald J. Trump’s efforts to encourage domestic energy production despite relatively low oil prices, the department said.

The proposed lease sale includes 14,375 blocks that are located from three to 230 miles offshore in the Gulf’s Western, Central and Eastern sectors in water depths ranging from nine to more than 11,115 feet (three to 3,400 meters).

The blocks on offer potentially hold between 210 million and 1.2 billion barrels of oil and between 550 million and 4.42 trillion cubic feet of natural gas, according to the Bureau of Ocean Energy Management (BOEM).

“In today’s low-price energy environment, providing the offshore industry access to the maximum amount of opportunities possible is part of our strategy to spur local and regional economic dynamism and job creation,” said Interior Secretary Ryan Zinke in a statement.

An earlier lease sale got a tepid response from oil companies because of the low oil price and high costs of offshore development. “It seems to run counter to market forces that, for the Republication side of the aisle, normally they take their cues from,” said David Jenkins, president of Conservatives for Responsible Stewardship, a non-profit conservation group.

The August offer of 73 million acres received $121.14 million in high bids for 90 tracts covering 508,096 acres (205,619 hectares).

“We’re hoping to get a healthy number of bids, more so than we did in August,” said BOEM spokesman John Filostrat.

Reporting by Bryan Sims; Editing by Chizu Nomiyama

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