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The
sale will be a key test of industry appetite for investment as
crude oil prices remain below levels at which many companies can
drill profitably and bankruptcies in the sector are mounting.
Drilling on federal lands is a crucial part of U.S. President
Donald Trump's "energy dominance" agenda to maximize domestic
production of fossil fuels. His opponent in the November
election, Joe Biden, has pledged to ban new oil and gas leasing
on public lands.
The U.S. Bureau of Land Management will offer 106 parcels on
more than 48,000 acres of federal land in New Mexico, Texas and
Oklahoma over two days, according to online auction site
EnergyNet and sale planning documents.
Many of the parcels scheduled for sale are in New Mexico's
southeast corner, overlaying parts of the sprawling Permian
Basin, the world's biggest oil field. Just four of the parcels
are in Texas and Oklahoma.
Most of the acreage had previously been scheduled to be offered
in May. That sale was postponed to give drillers time to recover
from challenges posed by the sharp drop in crude oil demand
precipitated by state lockdown orders to slow the spread of the
virus.
BLM ultimately shelved auctions in a slew of states in May and
June. Several lease sales the agency held in March, just as
states were implementing steps to contain the virus, attracted
meager bidding.
BLM will offer 12 parcels on 2,867 acres on Wednesday and 94
parcels covering 45,406 acres on Thursday, according to
EnergyNet.
(Reporting by Nichola Groom; Editing by Andrea Ricci)
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