Exxon Bids for Gulf of Mexico Leases Ahead of Carbon-Capture Plans

The oil explorer faced no competition for the leases across underwater hills and valleys with names such as Brazos and High Island during a U.S. Bureau of Ocean Energy Management lease sale on Wednesday. The bids were for about $158,400 each and were notable because they’re far from sought-after deep water zones that host the biggest oil and natural gas fields.

Instead, Exxon appears likely to employ the leases as part of an ambitious carbon-capture hub that would gather millions of tons of emissions from refineries and chemical plants near the Houston Ship Channel and bury them beneath the floor of the Gulf of Mexico. Dow Inc., Chevron Corp., Phillips 66 and Calpine Corp. are among 11 companies signed up to begin discussions on Exxon’s proposal.

Exxon said it was the apparent high bidder and declined to specify its intentions for the acreage.

“We will work with the Department of Interior on plans for the blocks once they are awarded,” spokesman Todd Spitler said in an email. “ExxonMobil takes a long-term business view. We are evaluating/analyzing the seismic/subsurface geology for future commercial potential.”

The proposed hub would store 50 million tons of CO2 annually by 2030 and double that by 2040, according to Exxon. The oil titan has said the $100 billion endeavor will require significant government incentives to reach completion.