Gulf of Mexico Drilling Auction Draws $82.7 Million in High Bids

The latest federal auction of oil and gas drilling rights in the Gulf of Mexico drew $82.7 million in high bids on Wednesday, a stronger showing than the previous sale in March but well below the December auction's $279.4 million total.

The sale, held in New Orleans, offered more than 80 million acres across 15,100 blocks in the Gulf. Sixteen companies submitted 69 bids covering roughly 330,000 acres, about 0.4% of the total acreage on offer. Winning bidders included units of BP, Chevron, and Shell.

This is the third sale mandated by the 2025 tax cut and spending law, which calls for 30 such auctions through 2040. It is also the second since the U.S.-Israeli war with Iran disrupted global crude flows and pushed oil prices to four-year highs.

Kate MacGregor, deputy secretary of the Department of the Interior, said the regular auctions "unleash the promise of offshore oil and gas." The sales mark a reversal from the Biden administration, which had campaigned on blocking offshore leasing but held them sporadically after lawsuits.

Offshore production accounts for about 15% of U.S. output, though it has lagged onshore shale fields due to longer timelines and higher upfront costs.

Industry groups welcomed the sale. Erik Milito, president of the National Ocean Industries Association, said it is about "ensuring America has the energy it needs to keep prices affordable, strengthen national security, and power economic growth for decades to come."

Environmental advocates criticized the auction. Julia Forgie, senior attorney at the Natural Resources Defense Council, called it "another unacceptable giveaway that threatens wildlife, coastal economies, and the livelihoods of the people who depend on a healthy Gulf." Many of the bids were for deep and ultra-deep water leases, where drilling risks are highest. The administration has also exempted some oil and gas operations from endangered species protections.