BP, Chevron, and the Australian oil and gas company Woodside Energy were the top bidders on Wednesday for the Trump administration’s first sale of offshore oil and gas drilling rights in the Gulf of America.
The Bureau of Ocean Energy Management, part of the Interior Department, offered about 15,000 unleased blocks across the western, central, and eastern gulf in the first offshore federal lease sale since 2023.
BP Exploration won 51 leases for a total of nearly $62 million, followed by Chevron USA, which spent just over $53 million on 24 leases.
“As today’s bidding makes clear, BP will continue to invest in the deepwater Gulf of America, underscoring our commitment to expanding U.S. energy production and delivering on BP’s strategy to safely and profitably grow its global oil and natural gas business,” the British company said in a statement to Reuters.
Woodside Energy paid more than $38 million for eight leases, followed by Murphy Oil of Houston, which spent more than $27 million for 14 leases.
The sale generated over $279 million in high bids for 181 blocks across 80 million acres in federal waters of the Gulf of America.
“The strong bidding we saw today reflects sustained industry confidence in the long-term potential of the U.S. outer continental shelf and the clear direction of this Administration to expand responsible offshore development,” said acting Bureau of Ocean Energy Management Director Matt Giacona.
The federal agency also offered bidders the lowest deepwater royalty rate since 2007 of 12.8 percent to spur investment.
The royalty rate is the percent of revenue companies pay the United States for operating at the site. In 2009, President Barack Obama increased the minimum royalty rate for offshore leases to 18.75 percent.
In 2022, the Inflation Reduction Act changed royalty rates, requiring every federal oil and gas lease to have a minimum rate of 16.67 percent.
The lease sale is the first of 10 mandated by the One Big Beautiful Bill Act, signed in July, which mandates 30 offshore sales in the gulf and six in Alaska’s Cook Inlet by 2040. The sales are part of the Trump administration’s push to increase domestic energy production.
The sale took in about $100 million less in high bids than the last gulf lease sale two years ago, but oil companies bid more per acre than at any government auction in the region since 2017.
The Trump administration’s focus on fossil fuel production is a sharp contrast to energy policies under President Joe Biden, who withdrew more than 625 million acres of federal waters from future oil and gas leasing to align with his climate-related mandates.
“President Trump made clear from Day 1 that the United States will no longer be held back by bad policy or foreign dependence,” said Interior Secretary Doug Burgum. “Today’s lease sale is another major milestone in rebuilding American energy dominance by unlocking investment, strengthening our energy security, creating jobs and ensuring Americans have access to affordable and reliable energy.”
The Gulf of America’s Outer Continental Shelf spans 160 million acres and holds 29.59 billion barrels of undiscovered, technically recoverable oil and 54.84 trillion cubic feet of natural gas, according to the Interior Department.
In 2024, offshore development generated $6.5 billion in royalties, the agency reported.
Environmental groups tried to stop Wednesday’s lease sale by filing a lawsuit against the Trump administration on Nov. 18, claiming the government was violating federal environmental law.
“Trump’s plan to auction off millions of acres of our public waters to Big Oil is a wholesale assault on gulf communities and endangered marine wildlife,” said Rachel Mathews, a senior attorney in the Center for Biological Diversity’s Oceans program.
The U.S. District Court in Washington has not ruled on the lawsuit.
Reuters contributed to this report.
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