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Wednesday, Aug. 26, 1998
Offshore bids drop amid falling oil prices
Lack of takers for federal leases reflects weakened market
Associated Press
NEW ORLEANS -- Bids dropped sharply for the latest federal auction of offshore petroleum leases in the western Gulf of Mexico, mostly near the coast of Texas.
A total of 486 bids for 402 tracts in the western Gulf were received for today's sale by the Minerals Management Service.
That's far off the record 1,224 bids taken on 804 tracts for the western Gulf sale in August 1997. High bids for that sale totaled $616.2 million.
Until now, the number of bids for federal leases in the Gulf had been skyrocketing, along with renewed interest in offshore exploration, including in deep water.
A fall in oil prices, which began late last year, had little effect on March's sale of federal leases in the central Gulf, off the coasts of Louisiana, Mississippi and Alabama. That sale attracted $810.4 million in high bids.
Analysts have said that deepwater leases are being acquired for long-term development and would not be so drastically affected by swings in oil prices.
However, oil prices recently have been hovering around $13 per barrel, while natural gas prices have fallen below $2 per thousand cubic feet, leading to widespread predictions that the western Gulf sale would be down.
In addition, some petroleum companies have begun to announce layoffs, including 6,000 jobs that will be cut by the pending merger of British Petroleum and Amoco Corp.
Independent companies, pinched by lower stock prices and reduced cash flow, also are finding it more difficult to obtain loans, analysts say .Post your comments about local news eventsFront Page || Main Index || News || Business || Texas || South Texas Outdoors || Birdwatching || Sports || Entertainment || Selena || Education || South Texas Attractions || World Wide Web