By Nichola Groom
March 20 (Reuters) - The Trump administration's fourth majorauction for oil and gas leases in the U.S. Gulf of Mexicoreceived $244 million in high bids on Wednesday, reflecting anuptick in interest from drillers.
Of the 78.5 million acres (31.77 million hectares) offered,companies submitted bids on 1.26 million acres, or about 1.6percent of the total, officials from the Bureau of Ocean EnergyManagement said on a conference call with reporters. That was anincrease from two sales last year when about 1 percent ofacreage offered received bids.
"We're on a positive slope," Mike Celata, BOEM's regionaldirector for the Gulf of Mexico, said on the call.
High bids of $244.3 million were also higher than the $178million and $124 million raised in 2018 sales but were still farshort of the revenue generated by Central Gulf sales between2013 and 2015, which ranged from $538 million to $1.2 billion.
Oil major Royal Dutch Shell and Norway's Equinorwere among the winning bidders, with Shell taking 87tracts, BOEM said. Equinor had the highest bid of nearly $24.5million for a single tract.
Of the 227 tracts that received bids, 213 has beenpreviously leased but were released back to the government since2014 when the price of oil dropped.
"What you are seeing is companies looking at prospects thathad been identified in the past and deciding it was time to pickup some more acreage," Celata said.
The outcome of the lease sale was the latest signal from theindustry about their interest in U.S. waters as President DonaldTrump's Interior Department prepares to release a long-awaitedproposal to expand offshore drilling, possibly to new areas ofthe Atlantic, Pacific and Arctic.
Offshore drilling is a crucial part of the Trumpadministration's "energy dominance" agenda to open up morefederal land and waters to energy exploration.
Gulf of Mexico lease sales held under the Obamaadministration included far less acreage, but typically yieldedmore interest and revenue - a difference that can be explainedby a decline in oil prices and a recent boom ineasier-to-extract reserves onshore.
The U.S. government estimates the Outer Continental Shelf inthe Gulf of Mexico contains about 48 billion barrels ofundiscovered technically recoverable oil and 141 trillion cubicfeet of undiscovered technically recoverable gas.
But most of the recent U.S. boom in oil production has beenfocused onshore, where it is cheaper to drill than in deepwater.(Reporting by Nichola Groom; editing by Susan Thomas andMarguerita Choy)
