US readies Gulf of Mexico lease sale for 2023

Offshore oil and gas producers will be able to bid on tracts in the US Gulf of Mexico for the first time in more than a year on 29 March 2023, according to a sale notice.

The US Interior Department today proposed holding the lease sale, which is one of three offshore lease sales that is required under the recently enacted Inflation Reduction Act. The agency proposed to offer all unleased acreage, which earlier documents suggest will cover about 84mn acres (340,000 km²).

The lease sale will charge a royalty rate of 18.75pc no matter the water depth, a change that Democrats included as part of the law. The US had been charging a reduced 12.5pc royalty rate in shallow-water leases in recent years in an attempt to encourage production.

US oil industry groups support the lease sale, the first in the Gulf of Mexico since one held in November 2021. Maintaining regular leasing is "fundamental when it comes to keeping energy flowing," National Ocean Industries Association president Erik Milito said. Gulf of Mexico crude output averaged 1.7mn b/d last year.

The Interior Department today also finalized an environmental analysis that will allow it to hold a lease sale on 30 December for unleased tracts in Alaska's Cook Inlet. The agency said it wants to offer to lease 193 blocks in Cook Inlet but defer leasing on 17 blocks that overlap with critical marine habitat.

By Chris Knight