NOIA President Expects Pent-Up Demand to be Apparent in Bidding at Central Gulf Sale

For Immediate Release:  Tuesday, June 19, 2012

Contact:  Nicolette Nye, (202) 347-6900, nicolette@nullnoia.org

 

NOIA President Expects Pent-Up Demand to be Apparent in Bidding at Central Gulf Sale

Washington, D.C. NOIA President Randall Luthi today issued the following statement in advance of Wednesday’s Central Gulf of Mexico Consolidated Lease Sale 216-222:

“Overall, compared to the last two years, we are seeing a positive trend for the offshore industry in the Gulf of Mexico, and we are looking forward to Wednesday’s lease sale with cautious optimism. 

“Not only is this the first Central Gulf of Mexico sale in two years and the last lease sale in the current five year OCS leasing plan, but the 2012-2017 plan is not yet out, so it is unclear when the next Central Gulf sale will occur.  These factors likely point to pent-up demand and interest in leases.  If you consider a few big discoveries in the Central Gulf over the past few years, such as Chevron’s Hadrian discovery and BP’s Tibor and Kaskida discoveries in deepwater and McMoran’s Davey Jones discovery in shallow water, there may be heavy interest in both deepwater and shallow water blocks. 

“On the other hand, increased development costs, higher minimum bids, longer permit approval times and concern over litigation may steer companies toward bidding on fewer leases, and leases in which there is a high confidence level where oil and gas may actually be found.  The successful purchase of a lease is no guarantee of completing a successful well. That’s why they call it exploring and not producing.

“Our country and the oil and natural gas industry need a good, robust sale. Offshore lease sales increase our energy security, improve our energy reliability, create new jobs, stimulate our economy and provide revenue to the federal treasury without raising taxes that eventually raise the price of gas at the pump.  We are hopeful of a very good sale on Wednesday.”

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ABOUT NOIA
NOIA is the only national trade association representing all segments of the offshore industry with an interest in the exploration and production of both traditional and renewable energy resources on the nation’s outer continental shelf.  NOIA’s mission is to secure reliable access and a fair regulatory and economic environment for the companies that develop the nation’s valuable offshore energy resources in an environmentally responsible manner. The NOIA membership comprises more than 275 companies engaged in business activities ranging from producing to drilling, engineering to marine and air transport, offshore construction to equipment manufacture and supply, telecommunications to finance and insurance, and renewable energy.