The U.S. Department of the Interior announces they will offer 73 million acres in the Gulf of Mexico up for sale for exploration in the oil and gas industry. Associate Director of the Tulane Energy Institute Eric Smith does not expect energy companies to have much interest.
“Most of the property that’s being offered up for lease is property that people have passed over before and not been interested in leasing.”
The lease sale includes about 14,000 blocks in all areas of the Gulf. Smith says these acres up for grab likely won’t turn things around for Louisiana and the Gulf of Mexico’s energy sector. He says previous sales were extremely slow in this area.
“I’m not expecting great things, it’s just too soon after the last administration. These lease sales take years to prepare and this one is a holdover from the prior administration.”
This is the first oil lease sale covering the entire Gulf of Mexico since 1983. Smith says he does not have high hopes for this sale given the low price of oil but is optimistic conditions will change as President Trump is pushing for energy independence.
“By the time they get to the next lease sale, they should be in a little better shape to revise the rules on leasing to provide a clearer picture on what your obligations are.”