Low energy prices cut offshore bids sharply

NEW ORLEANS — With energy prices a fraction of those from last year, bids for Wednesday’s federal sale of offshore tracts in the central Gulf of Mexico fell by more than half, the Minerals Management Service said Tuesday.

Fifty-six companies submitted 476 bids on 348 tracts in federal waters off the coasts of Louisiana, Mississippi and Alabama – a key energy producing region for the United States. The bids will be opened in New Orleans.


Last year’s sale in the central Gulf attracted 78 companies that put up 1,057 bids on 615 tracts. The sale tallied up a record $3.67 billion in winning bids. Then, oil prices were tapping $110 per barrel on the way to nearly $150 in July.

On Tuesday, benchmark crude for April delivery closed up $1.81 at $49.16. Natural gas has fallen below $4 per thousand cubic feet, about a third of its 2008 peak.

The sale comes during a time of declining production budgets for many petroleum explorers, especially small independent companies, and speculation on whether oil prices have bottomed out.

AP