MMS issues Eastern Gulf sale notice
  by: OilOnline
  Tuesday, July 17, 2001

The Minerals Management Service issued a proposed Notice of Sale for Lease Sale 181 in the Eastern Gulf of Mexico. However, the sale will be scaled down from earlier plans of the Bush administration to offer as many as 1,033 parcels. The sale is tentatively planned for Dec. 5, 2001 in New Orleans. A final sale notice will be published in October.

The sale area encompasses 256 blocks covering about 1.47 million acres. At present, 23 blocks in this area are under lease. Blocks in the Eastern Gulf sale area are located from 100 miles offshore the Alabama-Florida state line and over 285-miles from Tampa, Fla. The MMS said the area contains 1.25 Tcf of natural gas along with 185 million barrels of oil.

The MMS set a minimum bid requirement of $37.50 per acre with a royalty rate of 12.5 percent. All leases will have 10-year primary terms.

The proposed sale notice was announced after President George Bush bowed to political pressure from Florida Gov. Jeb Bush and other Florida state officials who strongly opposed drilling for oil and gas reserves in the Eastern Gulf region. Exploration offshore Florida's East Coast was part of the Bush administration's proposed national energy plan, which was announced in mid-May. Some view the plans for the smaller, more restrictive lease sale as a compromise between the Bush brothers. The oil and gas industry was optimistic that the full lease sale would be held, allowing the opportunity to drill for what are believed to be significant amounts of gas.