U.S. to open up offshore acreage for drillers

The U.S. government said it was offering more than 40 million acres for drilling opportunities in the central and eastern Gulf of Mexico.

"As one of the most productive basins in the world, the Gulf of Mexico is a cornerstone of our domestic energy portfolio, offering vital oil and gas resources that further economic growth and continue to reduce our dependence on foreign oil," Abigail Ross Hopper, director of the Bureau of Ocean Energy Management, said in a statement.

BOEM said sales for central and eastern acreage within the Gulf of Mexico mark the ninth and 10th auctions under a five-year lease plan ending in 2017. The lease for 42.1 million acres in the central Gulf of Mexico has the potential for the production of up to 894 million barrels of oil and 3.9 trillion cubic feet of gas. The eastern 595,475 acres could produce 71 million barrels of oil and 162 billion cubic feet of natural gas.

The proposed auction, scheduled for March 2016, builds on the first eight sales under the five-year program, which generated nearly $3 billion in bids for the federal government.

Most energy companies are spending less on oil and gas exploration because of lower crude oil prices. Offshore oil services company Hercules Offshore filed for Chapter 11 bankruptcy last month in an effort to ensure durability during the oil market depression.

Just five companies came forward with bids on the 33 tracts on the auction block in August in New Orleans. Though the lease sale drew in more than $20 million in high bids, the industry interest was suppressed as companies mind their revenue streams during the market downturn.