Deepwater tracts star in Gulf oil tract auction

Associated Press Modified: November 28, 2012 at 6:45 pm •  Published: November 28, 2012

Sen. Mary L. Landrieu, D-La., issued a statement calling on the administration to change its policy on offshore leases and expand its five-year plan for drilling in the Outer Continental Shelf. She said she was sponsoring legislation to add 11 lease sales above the administration's plan and to open areas in Virginia and Southern California.

"This legislation will also address an inequity that I have been fighting my whole career — that while producing states like Louisiana have shared in virtually none of the revenues from the energy we produce off our shores, states that produce energy on federal lands onshore receive 50 percent of these revenues," Landrieu said.

The western region's previous sale, last December, brought more than $324 million in leases. The central Gulf, the region where BP's Macondo well was located, is a much more attractive area for drillers. An auction for that region in June brought in $1.7 billion in high bids, the fourth-largest amount for that region since 1983 and $751 million more than the one for the same area in March 2010, a month before BP's Macondo well blew out.

BP had $239.5 million in winning bids in the June lease sale.

The bureau rejects bids considered below fair-market value. It rejected 22 of June's 454 high bids as too low. It will be months before it decides if any of Wednesday's bids will be rejected.

The idea of setting a fair market value for the tracts interested members of an energy delegation from Myanmar, who questioned BOEM official Thierry DeCourt through a translator before the sale.

About 3 percent to 5 percent of all bids are rejected as "grossly underbid," he told the group.

The Environmental Protection Agency's suspension of new federal contracts for BP on Wednesday had nothing to do with its not bidding, said John Rodi, BOEM's regional director for the Gulf of Mexico.