First of 30 oil lease sales planned for Gulf of Mexico draws $300 million from companies

Oil companies invested $300 million for Gulf of Mexico drilling rights on Wednesday, marking the first of 30 planned sales under the Trump administration’s push to expand domestic fossil fuel production.

The auction follows recent announcements to permit new drilling near Florida and California coastlines for the first time in decades, a move that has generated opposition even among Republicans concerned about potential impacts on tourism-dependent economies.

Wednesday’s sale was required by legislation passed by Republicans this summer, which set a 12.5% royalty rate on oil produced from these leases—the lowest deep-water drilling royalty since 2007. Thirty companies participated in the bidding, including industry leaders BP, Chevron, and Shell, securing rights to parcels covering approximately 1,600 square miles in the Gulf.

“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.

Total high bids came in slightly lower than the $382 million generated during the most recent Gulf lease sale under the Biden administration in December 2023. Officials initially reported receiving $279 million in high bids before correcting the figure to just over $300 million.

The administration’s aggressive promotion of fossil fuel development stands in stark contrast to its approach toward renewable energy, particularly offshore wind. A federal judge on Monday struck down a Trump executive order blocking wind energy projects, ruling that it violated U.S. law.

Environmental groups expressed concern that expanded drilling would increase risks to Gulf wildlife. The region has experienced numerous oil spills, including the catastrophic 2010 Deepwater Horizon disaster that killed 11 workers and caused massive environmental damage.

“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.

Most parcels receiving bids were in water depths exceeding 800 meters (2,625 feet), indicating industry interest in deep-water exploration despite the technical challenges involved.

Industry representatives welcomed the return to regular lease sales. Erik Milito, president of the National Ocean Industries Association, emphasized that “the real success is the resumption of a regular leasing cadence.” The predictable schedule—with at least two lease sales annually through 2039 and one in 2040—allows companies to develop more strategic approaches to bidding and development.

Republican lawmakers and industry leaders had previously criticized the Biden administration for conducting only a handful of Gulf lease sales while pursuing climate change initiatives. The Gulf of Mexico remains the largest source of U.S. offshore oil production.

“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 multi-year pause in leasing,” Milito added.

Administration officials suggested the more predictable schedule may have contributed to the lower bidding totals. “They are not pressed to come in all at once,” Robbins explained during an online news conference.

Environmental advocacy group Earthjustice has challenged the sale in court, arguing that the administration failed to adequately assess potential environmental impacts, particularly on endangered species like the Rice’s whale. This critically endangered marine mammal numbers only in the dozens and is found exclusively in the Gulf of Mexico.

“The Trump administration conducted the sale without analyzing how it would expose the Gulf region to spills and could devastate vulnerable marine life,” said Earthjustice attorney George Torgun, who has asked a federal judge to ensure stronger environmental protections for this and future sales.

It’s worth noting that only a small portion of offered parcels typically receive bids, generally in areas where companies aim to expand existing operations or see future development potential. Even after leases are purchased, actual drilling may not begin for years.

The drilling leases sold during previous sales under the Biden administration in December 2023 and March 2023 remain tied up in litigation. A federal court ruled this spring that Interior officials failed to properly account for greenhouse gas emission impacts and potential harm to the Rice’s whale.