(Reuters) – The U.S. government’s first oil and fuel lease sale. In five months it began Wednesday, attracting lower bids in New Mexico than the auctions that took place before the oil collapse cost the pandemic, according to the effects published in an online auction. Site.
The sale of 2,800 acres is the Trump administration’s first since March, when blockades to combat the spread of coronavirus paralyzed the order for crude oil and costs fell. It will be followed by a much larger sale of more than 45,000 acres in New Mexico and Texas.
Sales are a brake on the industry’s investment appetite, as crude oil costs remain below levels where many corporations can drill profitably and bankruptcies in the sector multiply.
The average acre bid of $466 for nine plots in New Mexico was well below recent sales before the pandemic, while average bids were thousands of dollars consistent with acre. New Mexico’s plots cover portions of the vast Pérmica Basin, the world’s largest oil field.
The average value of Oklahoma’s 3 plots is $119 in line with acre, in line with recent sales in the state due to a $201 offer in line with the 58.6-acre acre in Dewey County.
A spokeswoman for the U.S. Bureau of Land Administration (BLM) in New Mexico, Cathy Garber, said the offers were “competitive.”
“Without comparing this sale with other sales involving plots in the same general area, it’s hard to characterize average prices,” Garber said in an email.
Drilling on federal land is a component of U.S. President Donald Trump’s “energy dominance” program to maximize domestic fossil fuel production. His opponent in the November election, Joe Biden, has pledged to ban the rental of new fuels and oil on public lands.
(Report through Nichola Groom; Edited through Andrea Ricci and David Gregorio)
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