Major behemoths operating in the oil and gas market have purchased oil blocks in the U.S. waters in the Gulf of Mexico that has generated approximately USD 121.14 million in high bids. The sale received bids for 90 tracts, which approximately covers 508,096 acres. As per reports, around twenty-seven companies have taken part in this oil & gas leasing program and have submitted 99 bids amounting to a total of USD 137 million. This sale is likely to open up a plethora of job opportunities for workers and is slated to generate new job profiles in oil & gas industry pertaining to the availability of funds to develop sophisticated infrastructure.
This sale is apparently the largest in the history of the federal offshore program in terms of acreage across the gulf. The sale included the areas of Louisiana, Texas, Alabama, Florida, and Mississippi. To encourage an upsurge in drilling activities, the Trump administration has reduced the royalty rates for shallow-water lease and offered 76 million acres. This initiation is likely to help oil companies sustain their position at a time when oil prices are relatively low. The oil companies have to pay 12.5% of royalty rates for leases in less than 200 meters of water instead of 18.75% declared earlier.
The U.S. government is developing three new areas across the Gulf, an area where most of the energy companies seem interested to pour in money. These three regions have witnessed high resource potential and well-established infrastructure. Under the National Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2017-2022, all three additional regions are likely to be available for lease sale for the years between 2019-2024. In this program, the government has included some lease sale terms and conditions to avoid potential conflicts related to the oil & gas extraction in the region, to protect biologically sensitive resources and to reduce potential threats to endangered species. The Acting Assistant Secretary for Land and Minerals Management, Katharine MacGregor has stated that via this regulatory streamline and expanded offshore opportunities, the government is trying to redefine the competition among the industry players to receive reasonable returns on oil & gas resources.
The ongoing exploration and development activities of the U.S. government are slated to generate huge opportunities for the market players in oil & gas sector across the U.S. The government initiation to provide more acreage is likely to generate further options for investors of offshore leases.
Sunil develops content for Market Size Forecasters. A Post graduate mechanical design engineer by qualification, he worked as an intern at the defense lab for one year in the engine design and development department before switching his professional genre. Following his technical writing skills, he ...