The Department of the Interior announced today that the Bureau of Ocean Energy Management has held the Lease Sale Big Beautiful Gulf 1. This sale brought in $279.4 million through high bids for 181 blocks across 80 million acres in federal waters of the Gulf of America.
Thirty companies participated in this auction, placing 219 bids that totaled $371.9 million. This sale is the first offshore oil and gas lease sale mandated by the One Big Beautiful Bill Act.
“President Trump emphasized from the beginning that the U.S. will not be restricted by ineffective policies or foreign dependence,” stated Secretary of the Interior Doug Burgum. “Today's lease sale marks a significant step towards restoring American Energy Dominance by fostering investment, enhancing our energy security, creating jobs, and providing Americans with access to affordable and reliable energy.”
Acting Director of the Bureau of Ocean Energy Management, Matt Giacona, noted that the strong bidding indicates “confidence in the long-term prospects of the U.S. outer continental shelf and the Administration's commitment to expanding responsible offshore development.”
Major players like BP, Chevron, and Shell were among the leading bidders during this sale, which was the first government auction for oil and gas drilling rights in the Gulf of Mexico since 2023.
However, the timing of the sale is challenging for the industry, as West Texas Intermediate (WTI) crude prices are currently at $58.50, significantly lower than the range of low to mid-$70s seen in December 2023. To promote participation amid these market challenges, BOEM set royalty rates at 12.5% for both shallow and deepwater leases, marking the lowest deepwater rate since 2007.
In contrast, the previous Gulf lease sale in December 2023 saw much better participation and higher bids. That sale had 26 companies submitting 352 bids for 311 tracts covering about 1.7 million acres, with total bids reaching $441.9 million. BOEM awarded 299 leases for about 1.66 million acres, amounting to $372.5 million in accepted high bids.
In today’s auction, the Bureau offered around 15,000 unleased blocks across the Western, Central, and parts of the Eastern Gulf Planning Areas. The Outer Continental Shelf of the Gulf of America covers 160 million acres and is estimated to contain 29.59 billion barrels of undiscovered, technically recoverable oil and 54.84 trillion cubic feet of natural gas.
This sale marks the start of a long-term leasing program required by Congress, which includes 30 Gulf lease sales and six sales in Alaska's Cook Inlet under the One Big Beautiful Bill Act. Results from the sale will be available on the Bureau of Ocean Energy Management's website, with a complete statistical summary to be released within 90 days.
Funds from offshore energy activities are crucial for supporting the U.S. Treasury, Gulf Coast states, the Land and Water Conservation Fund, and the Historic Preservation Fund. In the fiscal year 2024, offshore developments generated $6.5 billion from royalties, $372.5 million from bonuses, and $122.8 million from rental payments.