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Posts Tagged ‘block sizes’

Wisdom from T&T

Posted in energy policy, Offshore Energy - General, tagged , , , on May 30, 2024| Leave a Comment »

Trinidad and Tobago (T&T), which has had oil drilling operations since 1857, 2 years prior to the Drake well in Pennsylvania, closed another bidding round this week. In this Shallow Water Bidding Round, they received bids on 4 of the 13 blocks that were offered.

T&T clearly understands the importance of regular offerings in all areas of their offshore sector. Per the Energy Ministry:

“These bid rounds are aimed at ensuring sustainable exploration and production and maximizing our country’s hydrocarbon resources. Following the successes of the 2021 Deep Water Competitive Bidding Round and the 2022 Onshore/Near Shore Competitive Bidding Round, this Shallow Water Competitive Bidding Round was the third in a series of bid rounds conducted by the Ministry of Energy and Energy Industries.” 

Regular sales are even more important in the US given the small lease blocks and thus the need to have access to nearby resources for sustained production and efficient utilization of facilities.

Below are the blocks receiving bids in the T&T sale, and the size of those blocks. US lease blocks are approximately 23 sq km.

BlockBidderBlock Size (sq km)
Lower Reverse LEOG and BG363.64
Modified U(c)bp and EOG767.75
NCMA 2bp1028.44
NCMA 4(a)EOG1338.47

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Fundamental reason why regular offshore lease sales are imperative

Posted in Gulf of Mexico, Offshore Energy - General, tagged , , , , , , on March 31, 2022| Leave a Comment »

Yesterday, EIAP issued a report for API and NOIA that estimates economic impacts from leasing program delays. The fundamental reason for regular sales has not received much public attention, but is summarized succinctly in the report:

In most cases, additional leases are required to produce an existing field fully or to underpin the economics of processing and transportation infrastructure. It is thus important for the industry to have continued opportunities to secure leases through a predictable leasing program.

Keep in mind that US lease blocks are the smallest in the offshore world, too small for optimal development in deepwater and frontier areas. The smaller the blocks, the greater the importance of regular lease sales. Pictured below is a 2017 graphic graphic which superimposes Kosmos Energy’s blocks off Senegal and Mauritania on the Central Gulf of Mexico.  Note that the six West African blocks encompass 36,000 sq km and are the equivalent of 1600 GoM lease blocks.  

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