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Bloomberg: Shell Is High Bidder in U.S. Gulf Lease Sale (Update2)

By Daniel Whitten

Oct. 3 (Bloomberg) — Royal Dutch Shell Plc was the high winning bidder with $554.6 million in a near-record lease sale for oil and natural-gas exploration rights in the Gulf of Mexico.

The U.S. Interior Department’s Mineral Management Service received a total of $2.9 billion in winning bids for production rights off the coast of Louisiana, Mississippi and Alabama. It was the largest lease auction since 1983, the service said today in New Orleans.

Shell, the biggest oil and gas producer in the Gulf, submitted 69 high bids, including the largest, which was $90.5 million for a tract in the Walker Ridge area of the Gulf. Chevron Corp. offered 44 high bids worth $283.4 million and Marathon Oil submitted 27 worth $221.7 million.

“Our bids were aimed at securing quality prospects that would add to our current Gulf of Mexico portfolio and provide future drilling opportunities,” Annell Bay, Shell’s vice president of Americas exploration, said in a statement.

The Energy Information Administration estimates U.S. energy consumption will rise 30 percent by 2030. Annual natural-gas use is projected to increase to 26 trillion cubic feet in 2030, from 22 trillion cubic feet in 2005. Consumption of oil will climb to 26.9 million barrels per day in 2030, from 20.9 barrels in 2005, the administration estimates.

The agency estimated in August that the sale could yield as much 1.3 billion barrels of oil and 5.2 trillion cubic feet of gas. A total of 84 companies offered $5.2 billion worth of bids.

“MMS expected the deepwater and ultra-deepwater areas of the central Gulf to receive a high level of interest in this sale,” Randall Luthi, the agency’s director, said in a statement. “The progress being made both in terms of discoveries and advanced technology provide incentive for operators to explore these frontier areas.”

The Gulf produces 25 percent of the nation’s domestic oil and 15 percent of its domestic natural gas.

To contact the reporter on this story: Daniel Whitten in Washington at [email protected]

Last Updated: October 3, 2007 18:16 EDT and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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