Companies offer $279 million for Gulf of Mexico drilling rights in first of 30 planned oil sales

WASHINGTON (AP) — Oil companies offered $279 million for drilling rights in the Gulf of Mexico on Wednesday in the first of 30 sales planned for the region in coming years under Republican efforts to ramp up U.S. fossil fuel production.

The sale came after President Donald Trump's administration recently announced plans to allow new drilling off Florida and California for the first time in decades. That's drawn pushback including from Republicans worried about impacts to tourism.

Wednesday's sale was mandated by the sweeping tax-and-spending bill approved by Republicans over the summer. Under that legislation, companies will pay a 12.5% royalty on oil produced from the leases. That’s the lowest royalty level for deep-water drilling since 2007.

Thirty companies submitted bids, including industry giants Chevron, Shell and BP, federal officials said. The total amount of high bids was down by more than $100 million from the previous lease sale in the Gulf of Mexico, under former Democratic President Joe Biden, in December 2023.

“This sale reflects a significant step in the federal government’s efforts to restore U.S. energy dominance and advance responsible offshore energy development,” said Laura Robbins, acting director of the Gulf region for the Bureau of Ocean Energy Management, which is part of the Interior Department.

Environmentalists said the sales would put wildlife in the Gulf at an higher risk of dying in oil spills. Spills occur regularly in the region and have included the 2010 Deepwater Horizon tragedy that killed 11 workers in an oil rig explosion and unleashed a massive spill.

“The Gulf is already overwhelmed with thousands of oil rigs and pipelines, and oil companies are doing a terrible job of cleaning up after themselves,” said Rachel Matthews with the Center for Biological Diversity.

Erik Milito with the National Ocean Industries Association, an industry group, said the takeaway from Wednesday's sale was that the Gulf “is open.”

While results of individual lease sales may fluctuate, Milito added, “the real success is the resumption of a regular leasing cadence."

"Knowing that (another lease sale) is coming in March 2026 allows companies to plan, study, and refine their bids, rather than being forced to respond to the uncertainty of a politically-driven multiyear pause," he said.

The sale supports an executive order by Trump that directs federal agencies to accelerate offshore oil and gas development, Interior Secretary Doug Burgum said in a statement. He said it would unlock investment, strengthen U.S. energy security and create jobs.