Shell leads in oil, gas leases

• Advocate staff report
• Published: Jun 30, 2009 - Page: 6B

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A Shell business unit topped the award of oil and gas leases in the central Gulf of Mexico, the U.S. Minerals Management Service reported Monday.

Based on bids in March, the MMS awarded 39 leases valued at $153.6 million to Shell Gulf of Mexico Inc., which is part of the world’s second-largest energy company, Royal Dutch Shell PLC. About 80 percent of Shell’s U.S. oil and gas production comes from the Gulf of Mexico, where it employs about 1,800 people and has peak production rates of 425,000 barrels per day.

As a whole, the lease sale brought in $690.2 million to the U.S. Treasury, which shares some of the proceeds with states. The minerals agency rejected high bids on 19 tracts valued at $12.7 million, saying those bids were below acceptable market value.

The leases off the coasts of Alabama, Louisiana and Mississippi were a far cry from a record federal sale of $3.67 billion in 2008.

The largest single bid in the central Gulf of Mexico sale went for $65.6 million and was submitted by Shell for Mississippi Canyon, Block 721.

By value, other top bidders were:

• BP Exploration & Production Inc., 25 bids accepted at $77.1 million.
• Marathon Oil Co., 16 bids accepted at $62.4 million.
• Noble Energy Inc., 22 bids accepted at $54.1 million.
• BHP Billiton Petroleum, 28 bids at $50.4 million.