The largest lease sale in American history in the offshore Gulf of Mexico yielded $124.76 million in winning bids Wednesday, a modest response to the Trump administration's effort to pump up investment in the region.
The Interior Department had offered up more than 77 million acres (31.2 million hectares), an area twice the size of Florida, as part of a broader effort by President Donald Trump's administration to ramp up U.S. fossil fuels output.
Companies bid on just 1 percent of that acreage, and won those tracts with bids averaging $153 an acre — 35 percent below average winning bids at a similar auction last year, and a fraction of the level paid in the region in 2013 when oil prices were much higher, according to a Reuters review of the data.
The Interior Department's Bureau of Ocean Energy Management, which administered the auction, characterized the results as robust.
"I think we're seeing continued consistent investment in the Gulf of Mexico," BOEM spokesman Mike Celata said in a conference call with reporters.
He said 33 companies, including majors Royal Dutch Shell Plc and Total SA, had placed 159 bids on 148 blocks.
But critics of the administration have called the unusually large lease sale ill-timed. U.S. crude oil and natural gas output is already smashing records thanks to improved drilling technology that has opened up cheaper onshore reservoirs, and Brazil and Mexico are competing for drilling investment in their own deep-water acreage.
"Offering a nearly unrestricted supply in a low demand market with a cut-rate royalty and almost no competition is bad policy and an inexcusable waste of taxpayer resources," the Center for American Progress, a left-leaning policy think tank, said in a statement.
The United States produces about 1.5 million barrels of oil per day from the Gulf of Mexico, about 15 percent of the national total, according to the Energy Information Administration.
The U.S. government offers Gulf of Mexico leases annually, but usually in smaller regional batches. An auction in March 2017, for example, offered up 48 million acres in the Central Gulf of Mexico planning region.