NATION & WORLD


US auctions 1st offshore tracts since oil spill


By ALAN SAYRE AP Business Writer


government’s fi rst auction of offshore petroleum leases in the Gulf of Mexico since the Deepwater Horizon oil spill disaster in 2010 drew $337.7 million in winning bids Dec. 14. Petroleum explorers bid on 191 tracts


in the western Gulf off the coast of Tex- as.


U.S. sitting on vast shale deposits of gas, most of the bidding centered on deep- water sites targeted for oil exploration. Twenty companies offered 241 bids to- taling $712.7 million. ConocoPhillips submitted the largest


bid, agreeing to pay for $103.2 million for a deepwater tract. The sale total was sharply higher than


during the last western Gulf sale in 2009, which drew only $115 million in high bids during a time of economic recession and increasing production of natural gas


With natural gas prices low and the NEW ORLEANS (AP) — The federal


from shale. Randall Luthi, president of the Na-


tional Ocean Industries Association, an offshore trade group, said it appeared that most of the bidding — especially in the Keathley Canyon region of the Gulf, which received the highest number of bids — was tied to oil prospects already discovered. ConocoPhillips’ sale-leading bid was for a site in that area. “There could be large areas of un-


known potential out there, but for now they are trying to lock up areas they know,” Luthi said. John Rodi, Gulf of Mexico regional


director for the Bureau of Ocean Energy Management, said he wasn’t surprised by the lack of interest in the shallow Gulf shelf, which was a hotbed for gas explo- ration before shale fi nds came into play. “That area has been picked over and


tracts in the central Gulf of Mexico — off the coasts of Louisiana, Mississippi


Survey shows economic strength of Midwest, Plains


bankers in 10 Midwest and Great Plains states refl ected continued economic growth in the region, which boasts strong agricultural performance and rising com- modity prices, according to a report is- sued Dec. 15. The Rural Mainstreet Index rose to 59.7 in December, its highest level since June 2007. The index, which ranges from 1 to 100, hit 58.4 in November, 52.9 in October and 52.2 in September. Survey organizers say that whenever the index is above 50, it suggests the economy will grow. Creighton University economist Er-


nie Goss, who oversees the survey, said in news release that growth in U.S. regions tied to agriculture and energy are outpac- ing urban areas. “Our survey is detecting a very healthy


OMAHA, Neb. (AP) — A survey of


bers in the 10 states, however, Goss said he expects European economic problems to slow growth in agriculture and energy because of a strengthening dollar and weaker exports. “This will tend to push agriculture


Iowa, Kansas, Minnesota, Missouri, Ne- braska, North Dakota, South Dakota and Wyoming. One of the survey areas, farming, rose


and energy commodity prices lower in the fi rst half of 2012,” Goss said. The survey covers Colorado, Illinois,


to a record high in December: to an in- dex reading of 84.1, compared with 75.4 in November. It was the 23rd straight month the index has been above growth neutral, Goss said. The farm equipment sales index


Rural Mainstreet economy, with the gap between urban and rural widening,” Goss said. “Bankers reported that approximate- ly 60 percent of agricultural producers have contracted or sold their 2011 pro- duction. Global demand and alternative energy generation are driving the Rural Mainstreet economy higher.” Despite the strong December num-


climbed to 73.8, its highest level since February 2008. Across all 10 states, the average cash


rent was $191 an acre, ranging from $105 in Kansas to $269 in Illinois. “Land prices appear to continue to


rise,” said Don Reynolds, president of Regional Missouri Bank in Salisbury, Mo. “But, we noted that a few small tracts that were desired by multiple cash-rich buyers appeared to distort people’s thinking.”


and Alabama — in July for the fi rst time since BP’s Macondo spill in the Gulf. ConocoPhillips


submitted the great- est number of high bids, totaling $157.8 million, followed by Exxon Mobil Corp. with $63.3 million. BP also was an ac- tive player with $27.5 million in winning bids.


Thursday, December 22, 2011 ■ Page 11


the gas price is not as rosy as oil prices,” Rodi said. The government plans to auction


leases run from fi ve to 10 years and re- vert back to the government if not de- veloped. The federal government will receive an 18.75 percent royalty rate on all production. A suit was fi led Dec. 13 by several en-


vironmental groups challenging an envi- ronmental impact study before the sale — a move that could eventually over- turn the sale. Interior Secretary Ken Sala-


Depending upon water depth, the


zar, who attended the sale, said he could not comment specifi cally on the suit, but believed the agency “can successfully de- fend this sale.”


by the sale following implementation of new safety standards for drilling, includ- ing requirements that operators must prove they are capable of quickly dealing with blowouts. “We don’t want to forget the lessons of the Deepwater Horizon,” he said.


Salazar also said he was encouraged


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