Auction of Oil Drilling Tracts in Gulf Draws Tepid Interest
CreditChris Carmichael for The New York Times
HOUSTON — In a setback to Trump administration efforts to increase offshore oil production, the industry responded with only modest interest on Wednesday in a federal auction covering a record 77 million acres in the Gulf of Mexico.
Companies bid on only 1 percent of the acreage, and the winning bids yielded a mere $125 million for the government.
The results reflected broad uncertainty among oil executives that global oil prices can remain at current levels over $60 a barrel, as well as a general preference for drilling in onshore shale fields that require smaller investments and are less risky.
Administration officials characterized the auction as a success since major oil companies — Royal Dutch Shell, BP, Chevron and Total — had placed over 150 bids, and the yield tally was $3 million above a regional lease sale in August.
But independent analysts said the results were modest.