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Released June 27, 2025 | SUGAR LAND
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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Announcing the first of three lease sales under the 2024-2029 program, the U.S. government said Wednesday it was putting up some 80 million acres in the Gulf of Mexico (designated as the Gulf of America by the Trump administration) for drillers.
"Offshore oil and gas play a vital role in our nation's energy portfolio, with the Gulf of America supplying 14% of domestically produced oil," said Matt Giocona, the deputy director of the Bureau of Offshore Energy Management (BOEM). "This proposed lease sale demonstrates BOEM's commitment to advancing American energy dominance and fostering the production of affordable, reliable energy resources for the nation."
In its monthly market report for June, the Energy Information Administration (EIA), the data arm of the U.S. Department of Energy, estimated that total Gulf oil production would average 1.81 million barrels per day (BBL/d) this year.
In one of his final acts of office, former President Joe Biden in January withdrew "significant portions" of the Outer Continental Shelf from future oil and gas leases. The administration argued that 2024 oil production was at an all-time high at 13.2 million barrels per day (BBL/d) and the industry has yet to tap into 80% of the 12 million acres already under lease.
President Donald Trump rescinded that order on his return to the White House. Trump, a pro-fossil fuels leader, has advocated for more drilling in general, hoping to tap into long-abandoned acreage in Alaska and elsewhere.
"This action sets the stage for continued investment, innovation, and responsible development in one of the world's most strategic energy regions," Erik Milito, the president of the National Ocean Industries Association, said Wednesday. "We look forward to working with policymakers to ensure the Gulf's continued contributions to U.S. energy strength for generations to come."
Offshore production is less expensive than production from inland basins, and typically lower in carbon intensity. The EIA in its latest monthly market assessment said legacy production in the Gulf was not enough to lift output, leaving any gains dependent on new developments.
Without those new developments, the EIA said the production in the Gulf would decline. Gains are expected to be incremental in any event, with output increasing only 2.2%. Most of the new operations, meanwhile, are coming from tie-backs to existing infrastructure, as opposed to new developments.
Total U.S. crude oil production is on pace to decline, the EIA estimates. Before the brief conflict between Iran and Israel added a significant risk premium to the price of oil, commodities were in retreat as attention was centered on macroeconomic concerns.
However, regulators in North Dakota, home to the Bakken shale formation, said recently that market volatility was not good for confidence in the upstream sector. For more on that, see June 26, 2025, article - North Dakota Oil Production Declines.
Projects in U.S. territorial waters of the Gulf could help lift overall crude oil production. Among the largest startups this year is the Shenandoah prospect, led by Beacon Offshore Energy LLC (Houston, Texas), which is expected to add 120,000 BBL/d of production. Shenandoah has a total investment value of $300 million. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project and Plant databases can click here for the project report and click here for the plant profile.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
"Offshore oil and gas play a vital role in our nation's energy portfolio, with the Gulf of America supplying 14% of domestically produced oil," said Matt Giocona, the deputy director of the Bureau of Offshore Energy Management (BOEM). "This proposed lease sale demonstrates BOEM's commitment to advancing American energy dominance and fostering the production of affordable, reliable energy resources for the nation."
In its monthly market report for June, the Energy Information Administration (EIA), the data arm of the U.S. Department of Energy, estimated that total Gulf oil production would average 1.81 million barrels per day (BBL/d) this year.
In one of his final acts of office, former President Joe Biden in January withdrew "significant portions" of the Outer Continental Shelf from future oil and gas leases. The administration argued that 2024 oil production was at an all-time high at 13.2 million barrels per day (BBL/d) and the industry has yet to tap into 80% of the 12 million acres already under lease.
President Donald Trump rescinded that order on his return to the White House. Trump, a pro-fossil fuels leader, has advocated for more drilling in general, hoping to tap into long-abandoned acreage in Alaska and elsewhere.
"This action sets the stage for continued investment, innovation, and responsible development in one of the world's most strategic energy regions," Erik Milito, the president of the National Ocean Industries Association, said Wednesday. "We look forward to working with policymakers to ensure the Gulf's continued contributions to U.S. energy strength for generations to come."
Offshore production is less expensive than production from inland basins, and typically lower in carbon intensity. The EIA in its latest monthly market assessment said legacy production in the Gulf was not enough to lift output, leaving any gains dependent on new developments.
Without those new developments, the EIA said the production in the Gulf would decline. Gains are expected to be incremental in any event, with output increasing only 2.2%. Most of the new operations, meanwhile, are coming from tie-backs to existing infrastructure, as opposed to new developments.
Total U.S. crude oil production is on pace to decline, the EIA estimates. Before the brief conflict between Iran and Israel added a significant risk premium to the price of oil, commodities were in retreat as attention was centered on macroeconomic concerns.
However, regulators in North Dakota, home to the Bakken shale formation, said recently that market volatility was not good for confidence in the upstream sector. For more on that, see June 26, 2025, article - North Dakota Oil Production Declines.
Projects in U.S. territorial waters of the Gulf could help lift overall crude oil production. Among the largest startups this year is the Shenandoah prospect, led by Beacon Offshore Energy LLC (Houston, Texas), which is expected to add 120,000 BBL/d of production. Shenandoah has a total investment value of $300 million. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project and Plant databases can click here for the project report and click here for the plant profile.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
