By Richard Valdmanis
March 21 (Reuters) - The largest lease sale in Americanhistory in the offshore Gulf of
The Interior Department had offered up a record 77 millionacres (31.2 million hectares) for development with discountedroyalty rates on the shallower tracts, as part of a broadereffort by President Donald Trump's administration to ramp up
But companies bid on just 1 percent of that acreage, and wonthose tracts with bids averaging
The Interior Department's Bureau of Ocean Energy Management,which administered the auction, characterized the results asrobust: "I think we’re seeing continued consistent investment inthe Gulf of
He said 33 companies, including majors Royal Dutch Shell Plc, BP Plc, Chevron Corp, and Total SA, had placed 159 bids on 148 blocks.
But critics of the administration called the unusually largelease sale ill-timed.
"Offering a nearly unrestricted supply in a low demandmarket with a cut rate royalty and almost no competition is badpolicy and an inexcusable waste of taxpayer resources," theCenter for American Progress, a left-leaning policy think tank,said in a statement.
It called the sale an "embarrassing flop".
Interior Secretary Ryan Zinke had said ahead of the salethat the record-sized offering would be a "bellwether" ofindustry demand in the region, and billed the effort as a way tohelp
PUMPING UP INTEREST
The
Wood Mackenzie energy analyst Mfon Usoro said she hadexpected demand for the acreage to get a boost from higher oilprices and lower corporate taxes. But she noted interest couldbe hurt by competition from
A spokeswoman for the American Petroleum Institute, whichrepresents
"Without this key access to new
In an effort to pump up interest, the Interior Departmenthad cut the royalty rate companies must pay in shallow offshorewaters by a third to 12.5 percent, and is considering cuttingthe rate for deeper waters too.
The administration is eyeing further vast lease salesoffshore in the future, having proposed opening up parts of theArctic, Atlantic and Pacific - an idea that has faced pushbackfrom several governors in