The US Department of the Interior announced that it has finalised plans to sell oil and gas drilling leases for 38 million acres in the Central Gulf of Mexico, in an effort to provide an opportunity for oil companies to expand their operations in the offshore oil region.

The lease sale is expected to produce about one billion barrels of oil and nearly four trillion cubic feet of natural gas.

Secretary of the Interior Ken Salazar said the Obama administration is committed to developing the country’s domestic energy resources to create jobs, promote economic opportunities and to reduce America’s dependence on foreign oil.

"Exploration and development of the Gulf of Mexico’s vital energy resources will continue to help power our nation and drive our economy," Salazar added.

Scheduled to be held at the Mercedes-Benz Superdome in New Orleans on 20 March 2013, the sale will include all unleased locations in the Central Gulf of Mexico Planning Area.

The Lease Sale 227 will include 7,299 blocks, located from three to about 230 miles offshore, in water depths ranging from nine to more than 11,115 feet (three to 3,400 meters).

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By GlobalData

According to BOEM, the lease sale is expected to produce 0.46 billion to 0.89 billion barrels of oil and 1.9 trillion cubic feet to 3.9 trillion cubic feet of natural gas.

It will be the second sale under the Obama administration’s new Outer Continental Shelf Oil and Gas Leasing Program for 2012-2017, and the first of five Central Gulf of Mexico lease sales that’s supposed to take place under the programme.

"The lease sale is expected to produce about one billion barrels of oil and nearly four trillion cubic feet of natural gas."

The five-year programme, which was announced in June 2012, will create new offshore areas that will include 75% of the technically recoverable offshore oil and gas resources available for exploration and development.

In June 2012, the Central Gulf Lease Sale 216/222 covered about 39 million acres, and attracted more than $1.7bn in high bids for more than 2.4 million acres.

In November 2012, the Western Gulf Lease Sale 229 made 20 million acres available for exploration and received high bids on tracts covering about 650,000 acres, collecting about $134m in high bids.

Under US President Barack Obama’s leadership, domestic oil and gas production has increased every year, while natural gas production is reaching its highest level ever, said BOEM.

BOEM Director Tommy P. Beaudreau said: "This sale is another important step to promote responsible domestic energy production through the safe, environmentally sound exploration and development of the nation’s offshore oil and gas resources."

"The Central Gulf of Mexico is one of the bedrocks of the United States’ energy portfolio," Beaudreau added.

Image: US Secretary of the Interior Ken Salazar. Photo courtesy of Department of the Interior.