U.S. auctions first drilling leases in Gulf of Mexico

The U.S. government on Wednesday auctioned offshore drilling leases in the western Gulf of Mexico, the first such sale since last year's BP oil spill. The auction drew 241 bids from 20 oil and gas companies that collectively bid more than 700 million U.S. dollars for access to 191 offshore tracts in the western Gulf, U.S. Interior Secretary Ken Salazar said in a press conference. "The results demonstrate there is a great interest in continuing to develop oil and gas in the Gulf of Mexico," Salazar said. ConocoPhillips' 103.2 million U.S. dollars offer for the deepwater Keathley Canyon Block 95 was the highest bid. Other bidders for the same block included BP and Royal Dutch Shell.BP submitted a dozen high bids for leases, worth 27.5 million U.S. dollars.Salazar said the auction garnered 337 million U.S. dollars in high bids. The U.S. Bureau of Ocean Energy Management estimated that the sale could produce about 222 million to 423 million barrels of oil and 1.5 trillion to 2.7 trillion cubic feet of natural gas. Wednesday's auction of leases was being closely watched as it 's the first since BP's Macondo well exploded in last April, killing 11 workers and unleashing the worst oil spill in U.S. history. Several environmental groups filed a lawsuit Tuesday asking a Washington federal district court void the results of the auction. The U.S. government is failing to learn from the BP oil spill by conducting the auction without making enough changes to improve the safety of offshore drilling, the groups said.