In first gulf oil lease auction since spill, BP bids -- and bids

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In the first auction of gulf-based leases since the Deepwater Horizon oil spill, BP -- which was leasing the Deepwater Horizon at the time of the spill -- submitted 11 high bids for drilling leases.

The leases are worth about $27 million total, according to John Filostrat, a spokesman for the federal Bureau of Ocean Energy Management, who spoke with The Times after the auction.

The company bid $109 million on a total of 15 leases, but was not the highest bidder on four of them.

Filostrat said high bidders do not necessarily win the leases; the bids are subject to a 90-day review by scientists with the Interior Department.


All told, companies bid more than $700 million during Wednesday’s auction in New Orleans, known as Lease Sale 218, with resultsposted online. The area covers more than 21 million acres in the western Gulf of Mexico off the coast of Texas, according to the U.S. Department of the Interior.

The largest bid was submitted by ConocoPhillips, which offered $103 million to lease a block in a region known as Keathley Canyon.

“Today’s lease sale, the first since the tragic events of Deepwater Horizon, continues the Obama administration’s commitment to a balanced and comprehensive energy plan,” said Secretary of the Interior Ken Salazar, who attended the sale and later posted a statement online.

“Offshore drilling will never be risk-free, but over the last 19 months we have moved quickly and aggressively with the most significant oil and gas reforms in U.S. history to make it safer and more environmentally responsible,’ Salazar said in his statement. ‘Today’s sale is another step in ensuring the safe and responsible development of the nation’s offshore energy resources.”

The Deepwater Horizon drilling rig exploded on April 20, 2010, off the Louisiana coast, killing 11 workers and sparking a three-month oil spill, the largest in the nation’s history.

Four environmental groups have challenged a study used to clear the sale of the leases. But they have yet to seek a federal court order to block the auction. Instead, an attorney for the groups has said they are counting on the possibility that a judge could later void the results of the auction if he agrees with their suit.

On Wednesday, federal officials defended the auction.

“Before moving forward with Sale 218, we conducted a rigorous analysis of the environmental effects of the Deepwater Horizon oil spill on the Western Gulf of Mexico,” said Tommy Beaudreau, director of the Interior’s Bureau of Ocean Energy Management.

Beaudreau added: “We also took a fresh look at the economics of leasing and introduced a number of lease terms designed to ensure fair return to the American people, provide incentives to promote diligent development, and help reduce the amount of leased acreage that is warehoused and left unexplored.”

Officials said the auction attracted 241 bids from 20 companies on 191 tracts.


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