(Bloomberg) — Hess Corp. was the high bidder in a U.S. auction for drilling rights in the Gulf of Mexico, which raised a total of $382 million from oil giants before the Biden administration imposes a two-year hiatus for future sales.
Source: Reuters
The sale, held by the Interior Department Wednesday, brought in more than any federal offshore oil and gas lease auction since 2015, according to the U.S. Bureau of Ocean Energy Management.
It comes days after the U.S. joined nearly 200 other nations at the COP28 UN climate summit in Dubai in a pledge to transition away from fossil fuels. While President Joe Biden had vowed during his campaign to stop new offshore drilling, the sale was mandated by Congress under last year’s climate law as a concession to Senator Joe Manchin, the West Virginia Democrat who provided the pivotal vote for the Inflation Reduction Act to pass.
Hess offered $88.2 million for 20 successful bids, according to the Bureau of Ocean Energy Management. Occidental Petroleum Corp.-owned Anadarko bid $74.2 million for 49 successful bids. Shell Plc’s successful bids totaled $69 million.
Environmentalists decried the court-ordered sale and called on Biden to use executive powers to block future lease auctions.
“The United States can lead the call for a transition away from fossil fuels that was agreed upon by more than 200 countries at COP28 last week, but only if President Biden steps up to permanently protect our waters from future offshore drilling,” said Michael Messmer, an official with the conservation group Oceana.
In all some, 73 million acres were available for bidding in what amounts to the last lease sale of its kind until 2025. Under an offshore drilling plan unveiled by the Biden administration in September, three offshore drilling rights auctions over the next five years will be held — the fewest number of oil and gas lease sales ever offered in a five-year program. The blueprint calls for holding Gulf of Mexico auctions in 2025, 2027 and 2029 — angering both climate activists pushing to end the practice and oil industry advocates who want more sales.
“Securing new lease blocks is vital for exploring and developing resources crucial to the U.S. economy,” said Erik Milito, head of the National Ocean Industries Association. “The Gulf of Mexico is a prime investment area, and this was the last chance for companies to secure leases in the near term.”
