BP BP., Chevron CVX and Shell SHEL were among the top bidders on Wednesday at the U.S. government’s first sale of oil and gas drilling rights in the Gulf of Mexico since 2023.
The auction, which ended with $279.4 million in high bids, was the first of 30 mandated by U.S. President Donald Trump’s tax cut and spending bill, which he signed into law in July.
His administration’s plans for offshore leasing are a significant departure from that of his predecessor, President Joe Biden, which had planned for a historically small number of oil and gas auctions as part of an effort to move away from fossil fuels and address climate change.
“We’re entering a new era of offshore American energy dominance,” Matt Giacona, acting director of the U.S. Bureau of Ocean Energy Management, said at the start of the auction, which was broadcast online.
BOEM said 30 companies submitted a total of 219 bids on 1.02 million acres, about 1.3% of the acreage offered.
BP was the most frequent bidder, according to sale documents, followed by Chevron and Shell. Other top bidders included Anadarko, LLOG Exploration Offshore, Talos Energy and Murphy Exploration & Production.
The auction’s highest bid was nearly $18.6 million, from Chevron, for a block in the Keithley Canyon deepwater area. The second highest was a joint bid of $15.2 million from Woodside Energy Deepwater WDS and Repsol REP for a block in the Walker Ridge area.
BOEM, an arm of the Interior Department, offered 81.2 million acres in the Gulf at a royalty rate of 12.5%, the lowest permitted by Trump’s new tax law. Previously, as mandated by Biden’s 2022 Inflation Reduction Act, oil companies were required to pay a minimum of 16.66% in royalties to the U.S. Treasury, states and other federal funds.
Trump’s law lowered the rate to encourage industry participation in lease sales. U.S. crude oil prices are down about 20% this year, which can limit investment by drillers, though technological innovations in deep-sea drilling are expected to help boost Gulf production.
Offshore production accounts for about 15% of U.S. output, but has lagged onshore shale fields in recent years because of longer timelines and higher upfront costs.
The last Gulf sale in 2023 attracted 352 bids by 26 companies covering 1.73 million acres. It raised $382 million, the highest of any federal offshore lease sale since 2015.
