Trump administration sets Gulf of Mexico drilling auction for Nov. 18

In this news, we discuss the Trump administration sets Gulf of Mexico drilling auction for Nov. 18.

(Reuters) – The Trump administration announced Thursday that it will auction off all available areas of the Gulf of Mexico to oil and gas drillers on November 18, the first major test of the offshore sector’s investment appetite since the start of this year.

The sale is the federal government’s first offshore lease sale since March, when the novel coronavirus epidemic was just beginning to crush global demand for fuel and crush prices. This sale was the lowest of all US offshore auctions since 2016.

President Donald Trump has sought to initiate offshore drilling as part of his “energy dominance” program to maximize fossil fuel production. The November sale comes two weeks after the November 3 election, which could also impact demand. Republican Trump’s Democratic rival Joe Biden has pledged to ban new drilling on federal lands and waters if elected.

The Bureau of Ocean Energy Management, a branch of the Home Office, said it would offer 78 million acres (31.6 million hectares) off the coast of Texas, Louisiana, Mississippi and the ‘Alabama for Oil and Gas Development, an auction that includes all available unleased areas in the Gulf.

BOEM has set a 75-day deadline for processing drilling permits in order to speed up the development of leases. This is the first time the agency has mandated a timeline for permit approval, spokesman John Filostrat said.

The agency also offers a longer tenancy term of 10 years for all leases at water depths of 800 meters or more. Previously, leaseholds had terms of 7 years for depths between 800 meters and 1,600 meters.

The U.S. offshore drilling industry has been hit hard this year not only by the fallout from the coronavirus pandemic, but by a series of storms across the Atlantic that have forced companies to shut down production and evacuate workers.

Reporting by Nichola Groom; edited by Grant McCool

Original © Thomson Reuters

Originally posted 2020-10-15 12:26:10.

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