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Eastern Gulf of Mexico Overview

The Eastern Gulf of Mexico Planning Area extends along the Gulf’s northeastern coast for some 1,120 kilometers (700 miles), from Baldwin County, Alabama, southward to the Florida Keys. The area encompasses approximately 76 million acres, with water depths ranging from tens of meters to over 3,000 meters (9,900 feet). Seaward of the State/Federal boundary (3 leagues or roughly 9 miles off the Florida coast) the area extends southward for more than 480 kilometers (300 miles). Since the late 1980's, a limited amount of OCS activity has taken place in this planning area because of administrative deferrals and annual congressional moratoria. In 2000, MMS estimated that between 6.95 and 9.22 trillion cubic feet of natural gas and 1.57 and 2.78 billion barrels of oil and condensate are contained in the Eastern Gulf of Mexico Planning Area.

Drilling for natural gas and oil has been occurring in the Eastern Gulf of Mexico offshore Alabama and Florida for more than three decades (See Eastern Gulf of Mexico Milestones).  The first of 13 natural gas and oil lease sales held offshore Florida occurred in 1959 and resulted in the issuance of 23 leases.  Currently, there are 241 active leases in the Eastern Gulf of Mexico Planning Area.

To date, over 81 exploratory wells (see Map) have been drilled in the Eastern Gulf of Mexico. Thirteen wells discovered natural gas, condensate, and crude oil (see discoveries).

Exploratory drilling started in the Eastern Gulf of Mexico in the mid-1970's with the drilling of Destin Dome Block 162, located 64 kilometers (40 miles) south of Panama City, Florida. After two years of drilling and 15 dry holes, exploration ground to a halt. The 1980's ushered in three Eastern Gulf lease sales and renewed industry interest in this area. Finally, in the late 1980's, Chevron U.S.A. and Gulfstar made natural gas discoveries in the area.

In October 1995, 73 oil and gas leases located south of 26° N. latitude were returned to the Federal Government as part of a litigation settlement. Consequently, no active Federal natural gas and oil leases exist off southwest Florida. Likewise, no active leases exist in the Straits of Florida Planning Area or off Florida’s east coast (South Atlantic Planning Area).

In the latter part of 1996, a development plan was filed by Chevron U.S.A. and partners on the Destin Dome 56 Unit (see Activities Offshore Florida).  On July 24, 2000, Chevron U.S.A. and partners filed a lawsuit against the U.S. government for denying the companies "timely and fair review" of plans and permits, and an appeal concerned with its Destin Dome 56 Unit (for more, see Activities Offshore Florida and agreement).

Unocal (Spirit Energy) began the first production in the Eastern Gulf Planning Area in mid-February 1999 on Pensacola Block 881.  Located approximately 12 miles offshore Alabama, this site involves the production of some 5 million cubic feet of natural gas per day.

In October 1999, Gulfstream Natural Gas Systems (ANR) and Buccaneer Gas Pipeline Company (Transco/Williams) submitted pipeline right-of-way applications to the MMS for the construction of two 400-mile (36-inch) natural gas pipelines spanning the Eastern Gulf of Mexico (see Activities Offshore Florida).  The Gulfstream right-of-way was approved by MMS on June 1, 2001.  This line went into service in June 2002.

In November 1996, the Secretary of the Interior released the Outer Continental Shelf Oil and Gas Leasing Program (1997-2002). The program included 16 lease sales, with one sale (see Eastern Gulf of Mexico Sale 181 Information) proposed for the Eastern Gulf of Mexico in 2001. The original sale area was carefully reviewed to be consistent with the State of Florida’s opposition to offshore oil and gas activities within 100 miles of its coast and responded to concerns raised by the Governor of Alabama.  The first steps in the 3-year planning process began on January 25, 1999, with the release of the Call for Interest and Information and the Notice of Intent to Prepare an Environmental Impact Statement (see Call/NOI).  A draft environmental impact statement was released in December 2000 and a final EIS was made available to the public in July 2001. 

On July 2, 2001, Interior Secretary Gale Norton announced that Sale 181 would be adjusted from 5.9 million acres to about 1.5 million acres or 256 blocks.  The adjusted area lies more than 100 miles off the Alabama/Florida State line.  Twenty-three blocks in this area were under lease at that time.  Lease Sale 181 was held on December 5, 2001.  MMS awarded leases on 95 tracts involving $340,474,113.  Seventeen companies participated in this sale.  

AES Ocean Express LLC (February 2002) and Tractebel Calypso LLC have proposed to transport natural gas from the Bahamas to South Florida and building an LNG terminal in the Bahamas.  These projects have been approved.

In July 2002, Interior Secretary Gale Norton announced approval of the 2002-2007 OCS 5-year oil and gas leasing program.  Two Sales are scheduled for the Eastern Gulf of Mexico in 2003 (Sale 189) and 2005 (Sale 197).

On May 29, 2002, Interior Secretary Gale Norton announced that the Department had agreed in principle to settle litigation with oil companies that own interests in the Destin Dome Unit.  The companies -- Chevron, Conoco and Murphy Oil -- will relinquish seven of nine leases in the unit that were the subject of the litigation in exchange for $115 million.  The remaining two leases, Destin Dome Blocks 56 and 57, are to be held by Murphy and will be suspended until at least 2012, under the terms of the agreement.  Murphy agreed not to submit a development plan on the two remaining leases before 2012, the year when the current moratoria will expire.  Under the terms of the agreement, the leases can not be developed unless approved by both the Federal Government and the State of Florida.

On December 10, 2003, Eastern Gulf of Mexico Sale 189 was held, attracting $8.4 million in high bids on 14 tracts.  Six companies participated in the lease sale that offered 138 blocks comprising approximately 794,880 acres offshore Alabama.  The highest bid received was $2.2 million, submitted by Shell and Nexen.

Five independent exploration and production companies and one energy company have come together to develop multiple ultra-deepwater natural gas discoveries located in the Central and Eastern Gulf of Mexico.  The Independence Hub will be located on unleased Mississippi Canyon Block 920, in a water depth of 8,000 feet.  First production is expected in 2007.  The Independence Hub development will include dedicated anchor gas fields, Atlas and Atlas NW (Lloyd Ridge Blocks 5, 49, &50), Jubilee (Atwater Valley Blocks 305 &349 and Lloyd Ridge Blocks 265 & 309), Merganser (Atwater Valley Blocks 36 &37), San Jacinto (DeSoto Canyon Blocks 618 &619), Spiderman (DeSoto Canyon Blocks 620 &621) and Vortex (Atwater Valley Blocks 217 & 261 and Lloyd Ridge Blocks 177 & 221), in addition to future discoveries on surrounding undeveloped blocks.  The fields will be tied-back to the platform through producer-owned subsea flowline systems.  The fields' water depths range from 7,800 to 9,000 feet.