U.S. Western Gulf of Mexico Lease Sale 248 made history Aug. 24 in more ways than one: the first livestreamed sale set record lows for the number of companies bidding, blocks receiving bids and total bonus bids since 1983.

With only three companies submitting bids on 24 of the nearly 4,400 tracts offered, the lease sale generated just more than $18 million in bids as the oil and gas industry continues to rebound from one of the worst downturns in its history. Blocks ranging from nine to more than 250 miles offshore Texas were offered.

“We can mainly attribute the low bidding to the continued low price of oil,” Mike Celata, the Gulf of Mexico (GoM) region director for the U.S. Bureau of Ocean Energy Management (BOEM), said during a media call after the sale. “There are still significant opportunities in the deepwater Gulf of Mexico. We think this sale was low simply because of the low price of oil at this time.”

Abundant global supplies of oil and gas have outpaced demand across the world, which have sent commodity prices plummeting from highs above $100 two years ago to around $27 in January. In the months since, oil prices have risen steadily but failed to stay above $50/bbl as companies cut costs and hold off spending. But tough market conditions linger as projects that secured funding before the downturn come onstream, helping to push GoM production to record highs.

Interest remains, including from companies with deep pockets.

ExxonMobil Corp. (NYSE: XOM), BHP Billiton Petroleum Inc. and BP Exploration & Production Inc. were the only companies that submitted bids. And if federal authorities deem their bids carried fair market value, the three could get the blocks they desired—none of the blocks offered received multiple bids.

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The highest bid—$1.124 million for East Breaks Block 590—came from ExxonMobil. The world’s largest publicly-traded oil company, which at midyear had earned $3.5 billion and generated $10.5 billion of cash flow from operations and asset sales, also placed a bid on another East Breaks block—bringing its total bids to $1.75 million.

At nearly $10 million, BHP was the apparent big spender. The Australia-based company, which has GoM assets in the Green Canyon area, placed 12 bids. While most of these were for blocks in the East Breaks area, the company also targeted Alaminos Canyon acreage—the only one doing so during this lease sale.

BP placed bids on 10 blocks—all in Garden Banks—for a total of about $6.3 million.

The companies were mostly attracted to deepwater. More than half of the blocks receiving bids had water depths between 800 meters (m) and 1,600 m. BHP placed the lone bid for the deepest of these—East Breaks 785, which has a water depth of 1,576 m.

“Despite these challenging circumstances, the companies that participated in today’s sale are investing millions of dollars in the future of America’s energy and economic security with no guarantee of success or financial return,” National Ocean Industries Association President Randall Luthi said in a statement. “The purchase of a lease block is a first step in a lengthy process that involves rigorous regulatory oversight including extensive environmental reviews, permitting, and safety checks.”

In a statement released a day before the lease sale, Luthi pointed out deepwater leases in the transboundary that enable U.S. companies to team up with other companies, such as Pemex, to develop resources.

But he also said that commodity prices and concern over regulatory burdens would factor into the sale’s outcome, possibly swaying U.S. companies into Mexican waters. Mexico is gearing up to offer 10 deepwater blocks on Dec. 5.

“Our neighbor to the south is eager to attract U.S. companies into their portion of the Gulf of Mexico,” Luthi said. “The continuing onslaught of ever-changing U.S. regulatory policies may tilt companies towards investing more in Mexican waters and thus dampen interest in this sale.”

Many oil and gas companies have been critical of new well control rules that require real-time monitoring for deepwater and HP/HT drilling, more controls on maintenance and repair of BOPs and third-party reviews, among other regulations. The final rules, unveiled in April by the Bureau of Safety and Environmental Enforcement (BSEE), followed the deadly 2010 Macondo well blowout and Deepwater Horizon rig fire.

Some of the rules had already been adopted by the industry, which created its own standards, improved operating procedures and devised better technology following the tragedy. The use of double shear rams in the BOP stack is one of the rules that is now a baseline industry standard.

When asked whether regulations played a role in the lease sale’s outcome, BOEM Director Abigail Ross-Hopper said the BSEE rule is appropriate.

“Participation level is more a reflection of current market conditions and companies’ development strategy rather than a particular piece of regulation,” she said.

Lease Sale 248 was the last for the western GoM region in the current 2012-2017 lease sale schedule. The previous Western GoM lease sale, held in August 2015, generated about $22.7 million in bids. Five companies submitted a total of 33 bids on the 4,083 blocks offered. Blocks in the Alaminos Canyon area received the most bids, but the highest bid was on an East Breaks block—submitted by Ecopetrol America Inc. for about $2.8 million.

Velda Addison can be reached at vaddison@hartenergy.com.