Recent U.S. Offshore Oil and Gas Lease Bidding: A Progress Report

21 Pages Posted: 15 Dec 2009

See all articles by Robert H. Porter

Robert H. Porter

Northwestern University - Department of Economics; National Bureau of Economic Research (NBER)

Philip A. Haile

Yale University - Department of Economics; National Bureau of Economic Research (NBER); Yale University - Cowles Foundation

Kenneth Hendricks

University of Texas at Austin - Department of Economics

Date Written: December 3, 2009

Abstract

This paper describes an ongoing research project, in which we examine recent trends in bidding for offshore oil and gas leases, and the exploration and development of leases after they are sold. We review empirical findings regarding bidder participation and bidding for the period 1954 through 1982. In 1983, the MMS adopted Area Wide Leasing (AWL), which dramatically changed the bidding environment. We provide an initial analysis of the post-1982 data, documenting a number of significant changes in behavior and outcomes. Bidding has been much less aggressive recently in comparison with the early years of the leasing program, in terms of both the number of bids submitted and the level of the submitted bids. This descriptive evidence leads to a number of questions, and we discuss a number of changes in the bidding environment since 1982, which may offer partial explanations of the observed changes.

Suggested Citation

Porter, Robert H. and Haile, Philip A. and Hendricks, Kenneth, Recent U.S. Offshore Oil and Gas Lease Bidding: A Progress Report (December 3, 2009). Available at SSRN: https://ssrn.com/abstract=1523359 or http://dx.doi.org/10.2139/ssrn.1523359

Robert H. Porter (Contact Author)

Northwestern University - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Philip A. Haile

Yale University - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Yale University - Cowles Foundation

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New Haven, CT 06520-8281
United States

Kenneth Hendricks

University of Texas at Austin - Department of Economics ( email )

Austin, TX 78712
United States
512-475-8532 (Phone)
512-471-3510 (Fax)

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