National Ocean Industries Association (NOIA) President Randall Luthi issued the following statement in advance of tomorrow’s Gulf of Mexico offshore oil and gas lease sale:
"This sale will be interesting due to low oil prices, which just dropped further this week. But even in this environment, US oil and natural gas companies are planning ahead, and remain committed to the Gulf of Mexico.
“The past few central sales have shown a trend away from shallow areas to deepwater, and that trend may continue, at an even a greater pace. Deepwater projects take a longer term view of the market. Producers understand that the price of oil could roller coaster several times over the years it takes to achieve production, and bet on the outcome that higher oil prices during production will make the overall project profitable.
“Shorter time frames for active exploration within the lease terms are factors that may impact bidding in this sale, especially for companies tight on capital.
“However, current market conditions should make opportunities to purchase leases abutting or near to existing finds, particularly attractive both in shallow and deepwater.
“It is yet to be seen whether low oil prices and stricter lease terms will conspire to bring the chickens home to roost at this sale.”
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