No one can accuse the oil industry of a failure to recycle.
The proof emerged in Wednesday's Western Gulf of Mexico lease sale where nine of the 10 highest priced leases came on blocks recycled from 10 years ago, when they were leased by companies who could not develop them.
Lease holders surrendered a total of 364 blocks from the 1997 sale back to the US Minerals Management Service so the agency could offer them again this year. And nine of those recycled blocks attracted $220 million worth of high bids Wednesday for 45% of the sale's total $487 million in high bids.
Only the seventh highest bid occurred on a block that has not previously been leased. Key recycling treasure hunters included Statoil with the top bid of $61 million for Alaminos Canyon 380 and $22 million on neighboring Alaminos Canyon 424.
Chevron bought three recycled blocks for a total of $106 million, including a $20 million bid on Alaminos Canyon 775 -- doubling down on a block that the company has held since 1997 when its $6.6 million bid made AC775 the sixth most expensive block in Western Region Sale 168.
The companies have cited factors ranging from technology challenges in deep water to a lack of available rigs. Whatever the reason, it appears the participant with the broadest grin from this year's sale 207 should certainly be the host. The MMS now has collected twice on sales of high value targets for drilling in the Western Gulf.
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