The Latest: 5 companies bid, making for smallest federal oil lease sale smallest in history

IndustriesAssociated Press

The latest on the federal oil lease sale Wednesday in the western Gulf of Mexico, off the Texas coast (all times local).

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9:20 a.m.

Low oil prices contributed to the smallest oil lease sale in the Gulf of Mexico off of Texas since the federal government began regional sales in 1983.

Five companies bid a total of less than $23 million on 33 tracts in the western Gulf on Wednesday. Each tract got a single bid, and BHP Billiton Petroleum (Deepwater) Inc. made 26 of the bids.

The smallest sale in that area before Wednesday was in 1986, when $56.8 million was bid on 41 tracts.

BP Exploration and Production Inc. made a single bid. Ecopetrol America Inc. made one on its own and three together with Anadarko US Offshore Corp., and Peregrine OI7 Gas II LLC made two.

An offshore industries trade group said Tuesday that low oil prices were among factors likely to depress interest in the sale.

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7:10 a.m.

The federal government is offering nearly 22 million acres off the Texas coast to oil and gas developers, though low oil prices are likely to limit interest.

The sale is scheduled for Wednesday. The last comparable lease sales in the western Gulf of Mexico brought in $109.1 million and $100.1 million.

A March sale in the far more popular central Gulf of Mexico brought the lowest number of bids since 1986, and officials said low prices were the reason. Since then, the price of U.S. crude has dropped $1.44 a barrel.

An offshore trade group said in a news release Tuesday that members look forward to the sale "but do not anticipate jaw-dropping results." The National Ocean Industries Association cites low prices, uncertainty over new regulations and an upward trend in lawsuits over permits and leases.