US Offshore Leasing Plunge and North Sea Gas Finds Revamp Offshore Energy Outlook

Interior Department unveils comprehensive overhaul of US offshore leasing program

The United States Department of the Interior recently issued a directive to replace its restrictive 2024-2029 National Outer Continental Shelf Oil and Gas Leasing Program with one that will open up much more federal waters for exploration and production by October 2026. The Secretarys Order was released November 20, and is called Unleashing American Offshore Energy; this directive instructs Bureau of Ocean Energy Management to take any lawful steps necessary to transition from prior plan to one that allows more exploration and production activity on federal waters.

Interior's initial proposal for its 11th program would make more than 85% of technically recoverable oil and gas resources on the US Outer Continental Shelf available for leasing in five years following program approval, targeting three of four Outer Continental Shelf regions that offer significant hydrocarbon potential, domestic supply capacity, employment potential, as well as federal/state revenue opportunities. The administration sees this initiative as part of their efforts to restore American energy dominance after what it sees as a sharp decrease in leasing pipeline activity over recent years.

Interior has made clear that its release of the Secretarys Draft Proposed Program represents only the first formal proposal stage before adopting its 2026-2031 offshore leasing program. Inclusion in this stage does not guarantee its ultimate sale as each planned sale may require further environmental review, public consultation opportunities and decision points under federal law. This order implements Executive Order 14154 and Secretarys Order 3418 both entitled "Unleashing American Energy," both which direct Interior bureaus to accelerate energy development while adhering to existing safeguards and policies.

BOEM Launches Big Beautiful Gulf 1 and Big Beautiful Cook Inlet 1 Lease Sales

Underscoring its shift towards expanded offshore hydrocarbon development, the Bureau of Ocean Energy Management released the Final Notice of Sale for Lease Sale Big Beautiful Gulf 1 and Proposed Notice of Sale Big Beautiful Cook Inlet 1. These lease sales were mandated under One Big Beautiful Bill Act which calls for auctions both in the Gulf of America and Alaska's Cook Inlet. BOEM indicated that its program aimed to establish a predictable leasing schedule designed to support long-term exploration and development campaigns.

As part of Big Beautiful Gulf 1, BOEM plans to offer leases across portions of the Gulf of Americas Outer Continental Shelf - estimated to contain roughly 29.59 billion barrels of undiscovered technically recoverable oil and 54.84 trillion cubic feet of natural gas - in an effort to encourage robust industry participation. Incentivising such participation, BOEM has set a royalty rate of 12.5 percent across shallow water tracts as well as deepwater tracts - the lowest permitted by statute - although sensitive areas will be exempted such as previously withdrawn blocks, tracts beyond US EEZ in Eastern Gap or areas within Flower Garden Banks National Marine Sanctuary.

On November 10, BOEM plans to publish in the Federal Register its Final Notice of Sale for Big Beautiful Gulf 1, initiating a 30-day waiting period leading up to its sealed bid opening on December 10 in New Orleans and live streaming of this bid reading event. Meanwhile in Alaska, Proposed Notice of Sale Big Beautiful Cook Inlet 1 kickstarts consultation and comment processes required under that same legislation for one of six lease sales across that region required by it. According to BOEM Acting Director Matt Giacona this series of sales marks an exciting chapter in offshore development across both regions while contributing directly towards national energy security and employment goals.

Equinor announces two gas and condensate discoveries in North Sea Sleipner area

Offshore Europe enjoyed another success as Equinor announced two gas and condensate discoveries near existing infrastructure in Sleipner in Norway's sector of the North Sea. Initial assessments indicate the discoveries are commercially valuable; Equinor indicated tie back options to current production hub are being considered by them as they evaluate options to sustain regional offshore gas output as older fields decline. These discoveries add another success story for offshore Europe amid efforts to sustain output as older fields decline.

Although resource estimates have yet to be fully disclosed, the company noted that these discoveries showcase the remaining potential in the Sleipner area and highlight infrastructure-led exploration's value in high plateau parts of the basin. Future appraisal and development decisions will depend upon reservoir quality, tie back economics, facility capacity constraints and market conditions affecting gas exports into continental Europe and Britain; European policymakers continue emphasizing domestic offshore gas as key component in underpinning near term energy security during energy transition processes.