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With energy prices low, offshore bids cut by more than half

The Seattle Times

Wednesday, March 18, 2009 at 10:38 AM

NEW ORLEANS —

With oil and natural gas prices far below those from a year ago, energy companies put up $703 million in high bids for offshore tracts in the central Gulf of Mexico.

Last year’s sale involving federal waters off the coasts of Louisiana, Mississippi and Alabama — a key energy producing region for the United States — yielded $3.67 billion in winning bids. But oil and gas prices also were roughly twice the level they’re at currently.

Still, some prospects received large bids in this year’s sale: a subsidiary of Royal Dutch Shell put up $65.6 million, the highest single bid on a tract.

As with recent central Gulf sales, most of the bidding was concentrated on shallow-water prospects where natural gas can be found and on tracts in deeper Gulf waters that can take years and hundreds of millions of dollars to develop.

Copyright © 2009 The Seattle Times Company

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