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June 25 (Reuters) – The Trump administration is proposing to hold a sale of oil and gas drilling rights on 80 million acres (32.4 million hectares) in the Gulf of Mexico on December 10 with lower deepwater royalty rates, according to the U.S. Bureau of Ocean Energy Management.
President Donald Trump issued an executive order in January 2025 calling on U.S. institutions to refer to the Gulf of Mexico as the Gulf of America.
The sale would be the first of three outlined in a Biden-era five-year offshore drilling program that included the smallest ever number of oil and gas auctions.
The Trump administration in April kicked off the process to develop a new five-year program to maximize energy development. Trump has ordered government agencies to identify ways to increase already record high U.S. oil and gas production, arguing that past administrations had unnecessarily curtailed drilling to combat climate change.
The administration plans to offer about 15,000 unleased blocks located 3 to 231 miles (5-372 km) offshore, according to BOEM, a division of the Department of the Interior. It is proposing a royalty rate of 16.67%, the minimum required by law, for both shallow and deepwater leases.
Recent oil and gas auctions have required drillers to pay 18.75% on the value of oil produced in deep water.
The administration said the lower rate would boost industry participation and lower production costs.
“Offshore oil and gas play a vital role in our nation’s energy portfolio, with the Gulf of America supplying 14% of domestically produced oil,” BOEM Principal Deputy Director Matt Giacona said in a statement. “This proposed lease sale demonstrates BOEM’s commitment to advancing American Energy Dominance and fostering the production of affordable, reliable energy resources for the nation.”
The proposal is subject to 60 days of public comment. A final sale notice will be published at least 30 days before the auction, BOEM said.
Reporting by Nichola Groom; editing by Diane Craft and Marguerita Choy
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