There is increasing evidence that the U.S. sector of the Gulf of Mexico is facing a decline in interest from oil and gas companies in the wake of more lucrative onshore shale basins stateside, Mexico’s shallow water plays and more favorable terms from other exploration basins worldwide.
In a competitive high risk, high reward industry that is understandable, but part of the blame lies with the Interior Department, according to sources in Houston’s legal circles. The deep U.S. Gulf acreages carry a royalty rate of 18.75%, while shallow blocks carry a 12.5% levy.