The president can brag that he continues to protect the Gulf from the oil industry.
Depending on which audience he is addressing.
But how bad was it, you ask? It was bad. Really bad.
Mr Obama offered drillers almost 40 million acres off Louisiana, Mississippi, and Alabama.
Less than 2 million acres drew bids, and no "block" drew more than six bids. [To put that in perspective, CLR has a million acres in the Bakken -- at least the company "had" a million acres. After the divorce, the number could change.]
But you have to ask yourself: would you bid on federal leases knowing that your permit applications will be slow-rolled. And then, heaven forbid, an oil sheen within a thousand miles of your drilling site.
At the headline, "industry bids for 4.4% of central gulf acres offered," the Oil & Gas Journal is reporting:
A total high bonus of $1.2 billion at Central Gulf of Mexico Sale 227 masked the fact that oil and gas companies made only 407 bids on 320 of the 7,299 blocks offered.
Only 58 blocks drew more than a single bid, the Bureau of Ocean Energy Management revealed in sale statistics. The 52 participating companies lodged 131 bids for blocks in 1,600 m of water or more, 78 bids for tracts in 800 m to less than 1,600 m of water, and 85 bids for blocks in less than 200 m of water.
Blocks totaling 1.7 million acres off Louisiana, Mississippi, and Alabama drew bids even though the government offered 38.6 million acres. No block drew more than six bids.
Shell Offshore Inc. bid high for 38 blocks, Anadarko US Offshore Corp. and ConocoPhillips 30 blocks each, and BHP Billiton Petroleum (Deepwater) Inc. 24 blocks. Statoil Gulf of Mexico LLC and Venari Offshore LLC submitted the high bids on 15 blocks each.
Statoil and Samson Offshore LLC put up the sale’s highest bid of $81.8 million for Walker Ridge Block 271. The block drew only one other bid. ExxonMobil Corp. made the sale’s second highest high bid, offering $66.1 million for Keathley Canyon Block 789.And so it goes. The president is doing his best to make the nation energy independent.
A post-script: some days ago it was reported that BP would not be bidding for anything in the Gulf this time around. Can you blame them?
It's possible CVX was on the list above but I didn't see it. It appears CVX trusts The African Congo more than the African-American Obama, reporting at Yahoo!Finance:
Chevron Corporation announced that its subsidiary Chevron Overseas (Congo) Limited will proceed with the joint development of the Moho Bilondo “Phase 1 bis” and Moho Nord projects as the company's latest deepwater developments offshore the Republic of the Congo.
“Moho Nord is among a strong queue of major capital projects that will provide Chevron with future growth,” said George Kirkland, vice chairman, Chevron Corporation. “With the project, we will enhance our position in this prolific deepwater basin.”
Situated approximately 46 miles (75 kilometers) offshore southwest of Pointe-Noire in water depths ranging from 1,500 to 4,000 feet (450-1,200 meters), the Moho-Nord joint development is the largest-ever oil and gas project in the Republic of the Congo. The Moho Bilondo “Phase 1 bis” project includes wells tied back to an existing floating production unit with a processing capacity of 40,000 barrels of oil per day.
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I doubt if anyone has read this far, but if you have, I'm sure you've connected the dots by now.
Yesterday, it was noted that Mr Obama needs to lease a lot more off-shore oil if he's going to pay for his Solyndra Slush Fund (SSF, aka the nation's Energy Security Trust). It looks like the industry is not really interested in that initiative, having bid on less than 5% of new tracts available for leasing. For those that want to go to the Oil & Gas Journal article directly, click on this link.
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For investors only:
Energy is surging today; CVX blasts through to a new high. ENB up, but not enough for a new high; EPD does blast through to a new high, however. SRE scored a new high.
CLR is down -- what was that saying, "hell hath no fury like a woman scorned." That phrase, I see, was written by "another" William. CLR is just one more example why investing is a crap shoot. One can do all the financial analysis, all the due diligence, and then ... whamm.... Holy Catastrophe! By the way, I've noted the CLR story for a full day or so now; I see Yahoo!Financial/CNBC has finally made it a headline story.
Speaking of BP: just announced -- BP announces an $8 billion stock buyback. Wow, oil companies must have a lot money. BP will be paying every American before all the lawsuits are over, and they still have cash left over for stock buyback.
Oil company BP said Friday it will buy back $8 billion of shares using money it earned by selling its stake in Russian producer TNK-BP. The announcement came after BP completed the sale of its 50 percent interest in TNK-BP to Moscow-based Rosneft, in a deal that gave it $12.5 billion pounds in cash and a stake in the state-owned oil company. The deal allowed Rosneft, the Russian oil giant, to tighten its grip on the country's lucrative oil industry.
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Note to the Granddaughters
The CLR debacle reminds me of a story. Many years ago, when the older daughter was in middle school (maybe younger, I forget) I invested some money in Exxon shares and placed them in her UGMA account. I was quite happy explaining to her how I invested in Exxon for her and what it meant. I doubt she understood a word I was saying.
Within a week of buying those Exxon shares, the infamous Valdez oil spill occurred. I remember the older daughter, your mom, coming home from school that day and asking if the shares I bought were the same company that just destroyed Alaska.
Smile.
[I just checked: the event occurred in 1989; your mom would have been ten years old. So I guess she would have been in 5th grade.]
