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StatoilHydro scores in Gulf sale



By Upstream staff 

Norwegian giant StatoilHydro said today it was the highest bidder on 29 leases in the US Gulf of Mexico, boosting its position in the area.

StatoilHydro said its winning bids were subject to review and final approval by the Minerals Management Service in New Orleans, and that process could take up to 90 days.

"In just a few years StatoilHydro has grown to be the fourth largest lease holder in the Gulf of Mexico and the second largest in deepwater," Oivind Reinertsen, StatoilHydro's senior vice president for North America, said in a statement.

StatoilHydro has a working interest in five of the 11 largest discoveries in the Gulf of Mexico including the Tahiti, Jack and Knotty Head finds, it said.

"We are eager to further develop these assets in the years to come," Reinertsen said.

More than $5.2 billion in bids were submitted by 84 participating companies in the competitive auction, which routinely saw multi-million bets on various tracts.

Lease Sale 205 pulled in a total 1428 bids on 723 blocks. Total high bids were $2.9 billion.

Minerals Management Service regional director Gulf of Mexico Lars Herbst said the high bid amounts were the second highest ever, bested only by the first-ever Gulf auction held by the MMS in 1983.

MMS director Randall Luthi said the number of bids received "reaffirms the strong commitment of the offshore oil and gas industry to develop the nation's resources in the Gulf of Mexico".

The main driver behind the activity was the interest in picking up large numbers of deep-water blocks coming off their initial 10-year lease terms.

The highest bid on one block was $90 million ponied up by Shell for Walter Ridge Block 7. That block along with Walker Ridge Block 51 were also the most heavily contested, attracting 13 bids each. ConocoPhillips took Block 51 with $51 million.

Walker Ridge Block 95 attracted 12 bids and Block 139 10 bids.

The top five companies who submitted the most number of high bids were BP with 83, Shell with 69, Cobalt International Energy with 53, Chevron with 44, and Nexen with 30. Llog came in sixth with 28 apparent winning bids.

Based on sum of high bids submitted, Shell was the clear winner with $554 million, followed by Chevron with $283 million, Marathon with $221 million, Cobalt with $211 million, and Murphy E&P with $161 million.

The deepest block receiving a bid was Amery Terrace 206 with a water depth of 3398 metres.

The shallow shelf was not without some stars. Notably, West Cameron Block 134, which attracted an $8 million bid, and South Timbalier Block 231 roped in $12 million from Llog Exploration.

Some unfamiliar names participating included Bayou Bend Offshore, Castex Offshore, Sequel Energy Ventures, Deep Gulf Energy, and a shelf partnership of Texas Standard Oil & Gas, Petrovalve and Grimes Energy.


Thursday, 04 October, 2007, 10:03 GMT  | last updated: Thursday, 04 October, 2007, 11:58 GMT

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