Record-setting Gulf drilling auction nets $1.7B

The Interior Department held a record-setting sale of oil and gas drilling rights in the central Gulf of Mexico today, with companies submitting $1.7 billion in winning bids for 454 offshore tracts and Statoil establishing a new high-water mark with its $157 million offering for a single lease. Industry watchers and Obama administration officials heralded the strong auction as a sign of a Gulf of Mexico renaissance more than two years after the oil spill that halted most deepwater drilling and slowed exploration in shallower depths. Louisiana Mid-Continent Oil and Gas Association President Chris John calls the lease sale—which was the first in two years—"another great step forward for the oil and gas industry in continuing to develop offshore resources." The robust sale was driven by pent-up demand for the acreage, recent big discoveries in the Gulf and strong oil prices earlier this year. "The Gulf is back," says Interior Secretary Ken Salazar. "There is great robustness in oil and gas activity currently under way in the Gulf, as well as interest in additional exploration." The Houston Chronicle has more details on today's lease sale and further reaction from industry observers here. Not surprisingly, Republicans—including Sen. David Vitter—are already saying the Obama administration is taking too much credit for the record-setting lease sale and still not doing enough to support the oil and gas industries. Read that story here.