The Latest: Dismal oil tract sale results due to low prices

Markets Associated Press

The Latest on federal oil lease sale (all times local):

Continue Reading Below

10:15 a.m.

A federal official says low oil prices are the reason few companies were interested in bidding in the latest oil lease sale for the Gulf of Mexico.

The regional director for the Bureau of Ocean Energy Management, Michael Celata (sel-AH-tuh), says the $18 million sale was below last year's record low in total money offered, number of bids and number of companies participating.

Last year, the same area off the Texas coast attracted 33 bids from five companies for a total of $22.7 million.

None of the bids was competitive, either this year or last.

Continue Reading Below

Celata says all bids are reviewed to make sure the government is getting fair market value, a process that can take up to 90 days, and bids considered too low will be rejected.

___

10:00 a.m.

The federal government's first livestreamed oil lease sale suffered from a video glitch, as well as extremely low interest. Only three companies bid for a tiny fraction of the leases available in the Gulf of Mexico, and no bid was competitive.

Bureau of Ocean Energy Management director Abigail Ross Hopper read the first two bids and was about to read another when she said "We will pause for a moment."

Several minutes then went by while the screen displayed messages such as "memory full" and "all scenes — now deleting."

The bureau got bids for just 24 of nearly 4,400 tracts offered, totaling just over $18 million. That's even fewer than last year, when 33 tracts attracted bids. And just like last year, there was only one offer per tract.

The bureau had sought to broaden its audience by livestreaming its lease sales. Officials say they don't know how many people watched.

Bids were offered by only three major corporations — BP Exploration and Production Inc., BHP Billiton Petroleum Inc., and Exxon Mobil Corp.

___

8:55 a.m.

The federal government says three companies are bidding on acreage in the Gulf of Mexico off Texas — and they've made a total of 24 bids on 24 tracts out of more than 4,000 offered.

That's even fewer than last year's sale, which was the smallest ever for the western Gulf. Last year, five companies made $22.7 million in high bids — also one per tract, on 33 tracts.

The statistics were released in advance of Wednesday's sale, which is the first to be broadcast live on the internet.

At earlier sales, an official from the Bureau of Ocean Energy Management read bids to oil company representatives and others in a Superdome ballroom in New Orleans. A bureau spokeswoman says protests in March and April played a part in the change, but the agency also wants to broaden the audience by opening it to people anywhere.

The three companies bidding are BP Exploration and Production Inc., BHP Billiton Petroleum Inc., and Exxon Mobil Corp. BP bid on 10 tracts, BHP on 12 tracts and Exxon Mobil bid on two.

___

The item above had been corrected to reflect 10 bids by BP and 12 by BHP.

___

2:45 a.m.

The federal government says that, for the first time, it's broadcasting an oil and gas lease sale live on the internet.

The sale Wednesday offers all 23.8 million acres available for drilling and exploration in the Gulf of Mexico off the Texas coast.

At earlier sales, an official from the Bureau of Ocean Energy Management read bids to oil company representatives and others in a Superdome ballroom in New Orleans.

A bureau spokeswoman has said protests that disrupted a lease sale in March played a part in the change. But Caryl Fagot (fuh-GOH) said the agency also wants to broaden the audience by opening it to people anywhere.

Last year's sale for the western Gulf was the smallest ever: $22.7 million in high bids. Five companies bid on 33 tracts, with one bid per tract.