BOEM Schedules Gulf, Offshore Alaska Lease Sales Under OBBBA Guidelines

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Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--Fulfilling the requirements of the One Big Beautiful Bill Act's (OBBBA) energy section, the Bureau of Ocean Energy Management (BOEM) announced the scheduling of lease sales starting in December this year with a Gulf of Mexico (GOM) sale.

This will be the first Gulf sale since 2023, and it will be the first one not mandated by Congress since 2021.

The BOEM's proposed schedule stretches through 2040, with lease sales for the GOM in March and August every year after 2025, and sales for Alaska's Cook Inlet in March each year. Cook inlet sales end in 2032 and skip 2029.

The December 2025 offering, Lease Sale 262, also numbered "Big Beautiful Gulf 1", will include approximately 15,000 unleased blocks covering around 80 million acres, in the Gulf's Western, Central, and Eastern planning areas. Water depths in the offered areas range from 9 feet to more than 11,000 feet, at distances from 3 to 231 miles offshore.

To further encourage leasing and exploration on federal lands in the Gulf, the BOEM is proposing to reduce the deepwater royalty rates, involving depths at or greater than 200 meters, to 16.66% from the 18.75% currently set. This would be the lowest deepwater royalty rates since 2007.

The Department of the Interior (DOI) announcement said of the Gulf sale, "The inclusion of at least 30 lease sales in the Gulf...underscores the region's indispensable role in America's energy ecosystem, accounting for roughly 14--15% of U.S. crude oil production and serving as the linchpin of offshore energy output."

And of the Cook Inlet sales it said, "By including six lease sales in Cook Inlet through 2032, the plan ensures Alaskans benefit from new jobs, stronger local economies and long-term investment in their communities. Alaska's unique position as both a strategic energy hub and a gateway to the Arctic makes it essential to U.S. energy security."

Gulf lease sales and royalties from production are a significant source of federal income. The DOI reports, "In FY2024, revenues totaled $7 Billion from Outer Continental Shelf (OCS) oil and gas activities."

Currently across the three planning areas, the BOEM shows 29,186 blocks leased totaling more than 11 million acres. The Central block, centered around Louisiana, leads in leases and acreage while the Western Block, closer to Texas, is second. The Eastern Block, near Florida, has only 13 leases compared to 1,639 for the Central and 394 for the Western.

Gulf Production and Projections
The U.S. Energy Information Administration (EIA) reports 2024 production from the Gulf was 1.77 million barrels per day (Mb/d). The agency expects it to rise slightly to 1.80 Mb/d in 2025. They expect the Gulf to account for about 13% of U.S. crude oil production (slightly less than the 14-15% listed by the BOEM) and 1% of marketed natural gas production in 2025 and 2026.

Revenue Sharing Boost
Also this month, the DOI announced a boost in the annual revenue-sharing cap for the Gulf's Outer Continental Shelf energy revenues based on another aspect of OBBBA. The cap, formerly at $500,000 per year, will now be at $650 million per year starting in fiscal year 2025 and continuing through 2034.

Funds generated by federal offshore leases goes to "coastal protection, restoration and infrastructure projects in Alabama, Louisiana, Mississippi and Texas, as well as the Land and Water Conservation Fund," said the DOI.

The states listed receive 75% of that money directly, with the remaining 25% going to the Land and Water Conservation Fund (LWCF). The LWCF was created in 1965, and its access to funding from offshore royalties began in 2009. The $500 million cap had been in place since 2015, with a brief bump up to $650 million in 202 and 2021. A federal program, it provides funds for the acquisition of land and water resources for conservation.

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