By Luke Johnson in New Orleans
Kathrine Schmidt in Houston
20 August 2014 14:48 GMT
ConocoPhillips beat out rival BP to take home one of the most contested tracts of a US offshore lease sale on Wednesday morning, entering the event's highest apparent bid of $16.7 million for Alaminos Canyon Block 431.
The UK supermajor had offered $12.5 million, but was unable to stave off competition from the US independent in results announced at the Mercedes-Benz Superdome in New Orleans.
The Western Gulf sale, which tends to be quieter than its Central Gulf counterpart, attracted high bids of $109.9 million and total bids of $135.4 million and saw competitive bidding in the deep-water Alaminos Canyon areas near the US-Mexico border.
Chevron splashed out the most at the sale with $25.7 million in high bids for five blocks. The company took home AC 215 further north with an $8.5 million bid and AC 258 with $7.4 million, beating Anadarko offers of $873,760 for each block.
ConocoPhillips won 10 tracts for a total of $23.4 million in bids.
BP took home 27 blocks with a spend of $22.8 million.
"BP is very pleased at the prospect of adding new leases in the deep-water Gulf of Mexico and extending the company’s industry-leading acreage position in the key US offshore region," a spokesman said.
Companies turned a keen eye to blocks near the US-Mexico border in the southernmost part of the ultra-deep-water Alaminos Canyon, which has taken on new relevance since southern neighbour Mexico has elected to open its oil industry to private participation.
Anglo-Dutch supermajor Shell entered the apparent high bid on AC 902 with $1.7 million, beating out a Stone Energy offer of 1.05 million.
The move fills a gap in a cluster of acreage that Shell already operates including its Tobago, Silvertip and Great White fields that produce from its ultra-deepwater Perdido spar.
"Shell continues to build upon a strong position in the Perdido fold belt by adding to its portfolio one strategically located block in the Western Gulf of Mexico," the company said in a statement.
"The acquisition of this key block strengthens Shell’s existing position in Perdido, where to date we have drilled 11 exploration and appraisal wells, and have current production coming from 14 wells."
Australian player BHP Billton landed AC 890 and AC 891 with bids of $4.4 million and $3.1 million respectively, topping BP offers of $2.3 million for each block.
BHP also beat out BP for AC 935 with a bid of $2.8 million. The UK supermajor had ventured $1.35 million.
BP did win a cluster of tracts near the border, including AC blocks 936 through 939. It also landed a chunk of acreage in the Port Isabel area. It beat out ConocoPhillips for Port Isabel Block 746, 15 miles north of the border, and won eight more Port Isabel blocks that abut the southern edge of the trans-boundary.
BP said its participation in the sale "further underscores its commitment to the Gulf".
BP did not comment on potential opportunities in Mexican waters.
Many of the newly leased blocks directly abut the US-Mexico maritime border and lie within 30 miles from the Pemex Trion-1 deep-water field, one of the joint-venture opportunities recently announced by Pemex.
Mexico will offer 11 exploration blocks on its side of the Perdido trend in an initial open bid round kicking off next year.