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BP Back to Bidding on Gulf of Mexico Leases

BP's legal fate has yet to be decided by the judge, but the company is moving ahead with new oil and gas exploration projects in the Gulf. The British oil giant posted 24 high bids Wednesday at the feds' latest massive auction of offshore leases, just a week after environmental officials cleared the company to receive federal contracts for the first time in two years. Louisiana's coastal restoration efforts also stand to gain millions.


In 2012, the Environmental Protection Agency (EPA) hit BP with a ban on entering into federal contracts -- including offshore drilling leases -- with the federal government. At the time, the EPA said the company hadn't cleaned up its safety procedures in the wake of the Big Oozy. The disciplinary measure, known as debarrment, was lifted by the EPA last week after sidelining the company for three lease sales.


That cleared the way for the oil giant to start bidding again at Wednesday's lease sale. The company spent $41.6 million on potential oil and gas tracts mostly located in the central Gulf of Mexico, winning 24 out of 31 bids they submitted.


The company was not the biggest spender on the day, however, as they finished behind Freeport-McMoran, Chevron, Murphy Exploration and Shell when it came to the amount of money turned over. Freeport-McMoran spent about $321 million on new tracts, and recorded six of the top ten highest bids on the day. (More results here.)


Overall, the feds collected $827 million in bids on about 330 tracts during today's proceedings, according to the U.S. Bureau of Ocean Energy Management. In addition to the Central Gulf , three areas of the Western Gulf of Mexico were auctioned off to Exxon Mobil in a separate lease sale to the tune of about $21 million.


About $2.1 million from nine of the leases sold Wednesday will go directly to Louisiana coastal restoration efforts, and the state is expected to gain billions more from the leases over time. That's because the Gulf of Mexico Energy Security Act, which was passed in 2006 by Landrieu and former Sen. Pete Domenici, allows Louisiana to share in 37.5 percent of today's bonuses and bids, as well as the same percentage of royalty and rental payments once the tracts start producing. The money goes to rebuilding coastal wetlands, as well as hurricane and flood protection projects, many of which have already been delineated in the state's coastal master plan.


"When it comes to protecting that coast, it is time to stop studying and start building, and the money generated from today’s leases will help us take a big step forward in that effort,” said Landrieu, who recently took over as head of the Senate's Energy and Natural Resources Committee.


This was the first time the revenue sharing was applied since 2008. Louisiana will get a share of revenues from other leases starting in 2017. The Senator has another revenue sharing bill, known as the FAIR Act, which would speed up payments from current leases, and lift a $500-million cap on revenues that can be shared with states.

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