Gulf of Mexico oil lease auction to test response to Trump-era regulations

A federal auction of exploration leases in the Gulf of Mexico next week will test energy companies’ appetite for acreage after the Trump administration left royalty rates for deepwater parcels unchanged, bucking an industry call to lower them.

The U.S. Gulf of Mexico has faced waning interest in recent years as competition stepped up from other basins globally, as well as from onshore shale basins and Mexico’s waters in the Gulf.

Oil companies had lobbied for lower royalty payments for deepwater acreage because of the projects’ high cost and long lead time before production can begin. In February, the Interior Department’s Royalty Policy Committee had recommended lowering the rates…

 

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