| HOUSTON, March 22
HOUSTON, March 22 Royal Dutch Shell
plc, Chevron Corp and Exxon Mobil Corp signaled
the oil industry's return to the Gulf of Mexico's deep waters
with high bids in a government auction up 76 percent over a year
The auction of offshore oil and gas parcels received nearly
$275 million in high bids, compared with $156.4 million a year
ago. The year-ago auction drew the fourth lowest total bids for
leases in the central Gulf.
The oil industry had moved away from deep water projects as
oil prices fell and regulatory scrutiny increased following the
Deepwater Horizon disaster in April 2010, the largest accidental
marine oil spill.
The five-month-long spill, which spewed some 210 million U.S.
gallons (780,000 m3) into the Gulf, caused extensive damage to
marine and wildlife habitats, as well as to the area's fishing
and tourism industries, forcing BP to sell assets worth
of billions of dollars.
Wednesday's auction was the first under President Donald
Trump, who has promised to cut permitting and regulatory hurdles
in support of energy exploration.
Shell and Chevron each had 20 high bids, and Shell's $55.8
million total was the largest among the 26 companies submitting
offers. Norway's Statoil ASA was the second-largest
total bidder with $44.5 million, followed by Hess Corp,
Chevron and Exxon.
"Today's strong sale reflects continued industry optimism
and interest in the Gulf's Outer Continental Shelf, Department
of Interior Secretary Ryan Zinke said in a statement.
The highest bid on a single block this year, from Shell, was
for $24 million, almost twice last year's $13.6 million top
offer. Among other top bidders, Exxon submitted 19 high bids
totaling nearly $22 million, and Anadarko Petroleum had
16 high bids totaling nearly $19 million.
The bids will be evaluated for the next 90 days by the
Bureau of Ocean Energy Management and winners disclosed
following the review.
Interest in new deep-water projects is heating up with more
favorable costs for drilling rigs, services and production
equipment. Shell has cut its well costs by at least 50 percent
and reduced logistics costs by three quarters, helping make
deep-water projects affordable at crude prices under $50 a
Last month, the Anglo-Dutch oil giant gave final approval to
go ahead with its Kaikias deep-water project in the Gulf. In
December, BP said it planned to move ahead with a previously
delayed expansion project known as Mad Dog Phase 2, the first
new platform sanctioned for the Gulf in a year and a half.
(Reporting by Ruthy Munoz; Editing by Gary McWilliams and