US Officials Extend Nearly 1,400 Offshore Oil Drilling Leases

WASHINGTON (Dow Jones Newswires), Nov. 1, 2011

U.S. officials have extended oil-drilling leases for the vast majority of companies that say their work in the Gulf of Mexico was disrupted by the Deepwater Horizon oil spill or the temporary drilling ban that followed the spill.

The Bureau of Safety and Environmental Enforcement announced Monday that it had approved more than 97% of the lease-extension requests it had received so far--or 1,381 of 1,413 applications.

Those that were denied an extension either failed to qualify for an extension or withdrew their applications, the bureau said. The bureau did not identify which companies had received lease extensions and which ones had been denied.

President Barack Obama announced in May that his administration would grant one-year extensions to certain companies operating in the deep waters of the Gulf. The goal was to give oil companies additional time to drill on their offshore leases following a moratorium on deepwater activity that lasted from May to October 2010.

The typical deepwater lease is 10 years.

The president announced his willingness to extend the leases as part of a number of initiatives aimed at boosting domestic oil production. Among the other initiatives was a pledge to hold annual auctions of oil-drilling leases in Alaska's National Petroleum Reserve. The next auction will take place Dec. 7.

In order to qualify for a lease extension in the Gulf, companies had to prove that they were not producing oil or natural gas on the lease as of May 15 and that the lease occurred in deep waters, or depths greater than 500 feet. Companies also had to show that their lease expires before the end of 2015.

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