Leasing became available for 21.9 million acres of federal tracts off the Texas coast today, but a major profit is unlikely, the Associated Press reports.
In the midst of still-floundering oil prices, oil lease sales typically don’t yield significant sales.
A March lease sale in in central Gulf of Mexico—a far more sought-after patch of land—attracted the lowest number of bids since 1986. Prices haven’t improved since then; the price per barrel recently continued its nosedive by $1.44.
Members of the offshore trade group National Ocean Industries Association said that though they look forward to the sale, they “do not anticipate jaw-dropping results under current conditions.”
The group cited several deterrents for leasers in the current market, including low oil prices, an uptick in lawsuits over permits and leases and the potential for more stringent regulations.
U.S. crude oil prices tumbled 22 cents to $41.65 on Tuesday. In March, when the price per barrel sat at $43.09, nearly 200 bids were placed on 169 tracts off the coasts of Louisiana, Mississippi and Alabama, totaling to $538 million in high bids.
Last year, lease sales in the Gulf generated $850.8 million in high bids. Though abandoned or rejected bids dropped the sales profit down to $845.9 million.