American Oil and Gas Reporter - September 2015 - 24

IndustryDigest
covering more than 190,000 acres. The
August sale drew a total of
$22,675,212.
BOEM says the five companies that
participated in the sale, in order of high
bids submitted, are:
* BHP Billiton Petroleum
(Deepwater) Inc. at $16.0 million bids
on 26 blocks;
* Ecopetrol America Inc. at $4.0
million bids on four blocks;
* Anadarko U.S. Offshore Corp. at
$1.0 million bids on three tracts;
* BP Exploration & Production Inc.
at $900,000 on two blocks; and
* Peregrine Oil & Gas II LLC at
$300,000 for a single tract.
The single highest bid was
Ecopetrol's $2.8 million bid on the East
Breaks 685 Block in water depths from
800 to 1,600 feet.
Lease Sale 246 offered 4,063 blocks
covering 21.9 million acres in water
depths up to 10,975 feet, the bureau adds.
"The Gulf remains a critical
component of our nation's energy
portfolio, and holds important energy
resources that spur economic
opportunities for Gulf producing
states," BOEM Director Abigail Ross
Hopper states. "While this sale reflects
today's market conditions, it
underscores a steady, continued interest
in developing deepwater federal
offshore oil and gas resources."
National Ocean Industries
Association Vice President of
Communications and Industry Affairs
Nicolette Nye remarks that the sale's
results are "disappointing, but not
surprising, and accurately reflect the
low commodity price environment and
increasing regulatory uncertainty."
"The entire oil and natural gas
industry, especially the offshore
segment, understandably is being very
cautious," she continues. "The
companies that did participate in this
sale should be appreciated for their faith
in a bright energy future and in the
Gulf's potential. This commitment
comes in spite of mixed energy
messages from Washington."
Nye remarks that the United States
should attempt to keep pace as other
countries start to open their offshore oil
and gas resources. "We are hopeful
Washington will acknowledge these
benefits and validate their importance to
our nation's economic and energy
health," she states. ❒
24 THE AMERICAN OIL & GAS REPORTER

Commerce Department
Opens Door To Exports
Of U.S. Oil To Mexico

WASHINGTON-The Obama
administration announced in midAugust it planned to allow limited sales
of U.S. crude oil to Mexico. The
decision comes amid national debate
about ending the 40-year prohibition on
exporting U.S. crude.
"Consistent with long-standing law,
the Commerce Department's Bureau of
Industry and Security is taking action on
applications for the exchange of crude
oil with a number of countries," a
Commerce Department official says.
"Also, consistent with provisions that
allow for the exchange of U.S. crude oil
under certain circumstances and that
support exchanges with Mexico, BIS is
acting favorably on license applications
for the exchange of U.S. crude oil for
similar quantities of Mexican crude oil."
The official adds that BIS is denying
a number of applications for exchange
of U.S. crude oil for crude oil or
petroleum product from other countries.
News reports say oil swaps with
countries in Europe and Asia have been
rejected.
According to media reports, Mexican
state oil company Petroleos Mexicanos
began discussions about an oil swap in
January. The talks sought to allow U.S.
companies to export 100,000 barrels a
day of light crude oil to support
Mexico's gasoline production. In return,
reports say Pemex would send heavy oil
to U.S. refineries. Export licenses
would be good for one year.
Two U.S. representatives from Texas
hail the announcement, with Democrat
Henry Cuellar and Republican Will
Hurd predicting the swap will further
develop the state's Eagle Ford Shale.
"These swaps will further positively
impact energy production in Texas and
the United States. The United States and
Mexico have a great relationship when it
comes to trade and commerce, and this
announcement is a clear sign that both
countries are eager to further develop
their energy sectors," Cuellar says.
Hurd predicts the agreement will
open the door to more reforms that will
move North America toward energy
independence.
"Energy trade is a key component of
our economic relationship with Mexico,
and changes in their energy policies

have given us an opportunity to
strengthen that exchange," Hurd says.
"The American energy renaissance that
has flourished in Texas because of the
Eagle Ford, Permian Basin and Barnett
shale exploration will continue to
strengthen because of this decision." r

Gas Storage Levels
Increase By 313 Bcf

WASHINGTON-Underground
natural gas storage in the United States
stood at 3.193 trillion cubic feet on
Aug. 28, 4.0 percent above the five-year
average, according to the U.S. Energy
Information Administration. That was
up 313 billion cubic feet from the 2.880
Tcf reported by EIA on July 24, which
was 3.0 percent above the five-year
average. The Aug. 28 storage number
was 494 Bcf more than a year ago,
when storage stood at 2.699 Tcf.
EIA reports gas storage in the
producing region stood at 1.130 Tcf on
Aug. 28, 14.5 percent above the fiveyear average and 32 Bcf more than the
1.098 Tcf reported in storage on July
24, which was 12.4 percent above the
five-year average. The Aug. 28 storage
number for the producing region was up
310 Bcf from a year ago.
In the eastern region, EIA reports,
gas storage on Aug. 28 was 1.581 Tcf,
2.3 percent below the five-year average,
but up 263 Bcf from the 1.318 Tcf
reported in storage on July 24, which
was 4.4 percent below the five-year
average. The Aug. 28 storage number
for the eastern region was up 127 Bcf,
compared with a year earlier.
In the western region, EIA reports,
storage levels on Aug. 28 were 482 Bcf,
3.9 percent above the five-year average
and up 18 Bcf from the 464 Bcf
reported on July 24, which was 5.5
percent above the five-year average.
The Aug. 28 storage number in the
western region was up 57 Bcf from a
year ago. r

Coming In October

An update on independents' latest
field activity in the Eagle Ford Shale
play, a case study of real-time in situ
reservoir characterization, and the
lessons learned in refrac pilots in the
Eagle Ford horizontal wells.
American Oil and Gas Reporter - September 2015

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