GoM lease sale set for Aug. 15

NEW YORK – The U.S. Interior Department will hold another federal auction of exploration leases in the Gulf of Mexico on Aug. 15. The second 2018 lease sale will test energy companies' appetite for acreage after the Trump Administration left royalty rates for deepwater parcels unchanged at 18.75 percent. Industry officials had call for lower royalty rates at 12.5 percent. The Gulf of Mexico has faced waning interest in recently while competition increased from other global basins and from onshore shale basins in Mexico’s waters of the GoM. Some companies may have bid on fewer parcels in the March 2018 auction while waiting to see if the Interior Department would cut royalties, said William Turner, a research analyst at Wood Mackenzie. In that auction, only 1 percent of 77M offered acres got bids. "The uncertainty is gone," said Imran Khan, senior manager at Wood Mackenzie. The clearer royalty rules may draw additional bids from such heavy-weights as Royal Dutch Shell and Chevron; and to smaller firms like LLOG, which is headquartered in Covington, La. (Source: Reuters 08/10/18)