Statoil bids $61 million for US offshore tract

[peejay 327]

Statoil bids $61 million for offshore tract

Exxon Mobil has most high offers in lease sale

By KRISTEN HAYS

2008 Houston Chronicle

Norway's Statoil made the biggest bet that a single 9-square-mile block beneath the seafloor in the western Gulf of Mexico has significant amount of oil and natural gas.

Exxon Mobil, meanwhile, spread the most money over more acreage in the hunt for resources, according to federal lease sale results revealed Wednesday.

Statoil's $61 million bid on a single block more than 160 miles south of Galveston was the highest of 423 bids for leases from the federal government. Exxon Mobil submitted the largest number of high bids for a total of $127.3 million, though the Irving-based oil major had no competition from other bidders for much of its quarry.

Exxon Mobil also snagged the deepest block receiving a bid, pledging $524,500 for a block in more than 9,700 feet of water about 200 miles south of Galveston.

Interior Secretary Dirk Kempthorne highlighted results of the routine lease sale to push for increased access to explore and drill for oil in federal waters, most of which are off limits under a congressional moratorium in place for more than 20 years.

"Our role is to make accessible resources needed for the country's energy security," he said Wednesday in New Orleans.

Last month, President Bush lifted an executive ban on drilling in off-limits areas off the west and east U.S. coasts and the eastern part of the Gulf, and he called on Congress to lift its moratorium as well.

Candidates on drilling

Wednesday's rundown of $607 million from 423 bids — $487 million of which were awarded for 319 blocks — came a day after Republican presidential candidate John McCain visited Chevron's Genesis oil and gas platform about 150 miles south of New Orleans.

McCain is pushing to open access to drilling in off-limits areas, while Democratic presidential hopeful Barack Obama says he would consider more access if it were part of a larger energy policy.

Democrats opposed to expanding offshore drilling say oil companies should drill on 68 million acres of federal lands and waters they already lease but aren't developing.

Chevron, the largest leaseholder in the Gulf, submitted three of the top five bids that were announced Wednesday: $52 million and $34.6 million for blocks directly south of the Louisiana coast and $20 million for a block in the same area that generated the highest bid from Statoil.

Statoil also submitted the fourth-highest bid in that area at $22 million. Statoil has been increasing its Gulf presence in recent sales and spent $136 million on 36 deep-water blocks last August.

Deep-water focus

Overall, bids were submitted for about 10 percent of the 3,412 blocks available. Of those, the most targeted areas were in water depths of 2,600 feet to more than 5,200 feet.

"Companies continue to display an increasingly larger appetite for deep-water blocks, as we have seen over the last few years of lease sales," Simmons & Company International said in a note to investors Wednesday.

The vast majority of leases awarded Wednesday will last for 10 years, though some in water depths of a few hundred feet, where drilling is easier, will last for five to eight years. If companies don't explore and drill by the lease deadline, the block returns to the U.S. Minerals Management Service to be made available for bid again.

Assistant Interior Secretary Stephen Allred said officials weren't surprised that 10 percent of tracts available brought in bids. The government analysis of all the tracts showed that the leases that generated bids were in blocks most likely to have oil.

"You can't assume that every lease that everybody has is going to produce oil," Allred said.

He added that high-dollar bids could be a product of improved seismic and other exploration technology as well as increased overall deep-water activity that help oil companies get a better idea of which blocks are the best bets.

Royal Dutch Shell submitted a $105 million bid on a block in the central part of the Gulf, where drilling was more prolific in a previous sale, he said.

TOP 10 BIDS

• 1. $61.1 million, Statoil

• 2. $52.1 million, Chevron

• 3. $34.6 million, Chevron

• 4. $22.3 million, Statoil

• 5. $20.1 million, Chevron

• 6. $11.9 million, Shell

• 7. $8.1 million, Eni

• 8. $8 million, LLOG Exploration Offshore

• 9. $6.2 million, ConocoPhillips

• 10. $6 million, LLOG Exploration Offshore

http://www.chron.com/disp/story.mpl/business/5956703.html

[almaty 19]

exxon-mobil...$$ on them