*
Chevron bids amounted to 41% of $264 million in total bids
*
Exxon's near-shore selections most suited to carbon storage
(Rewrites, adds analyst, BP comments)
By Sabrina Valle
HOUSTON, March 29 (Reuters) - Exxon Mobil Corp on Wednesday bid for offshore blocks to store carbon dioxide
underground during a government oil and gas lease sale in the
U.S. Gulf of Mexico, while rivals Chevron Corp and BP
Plc targeted areas for production.
The largest U.S. oil company has been selling oil production
blocks in the U.S. Gulf since 2018 as it shifts to more
lucrative fields elsewhere. And yet, it bought dozens of blocks
in the past couple of years in the same basin with a new
purpose: burying carbon dioxide instead of pumping oil.
The government oil license auction generated
$264 million
in high bids, according to the Bureau of Ocean Energy
Management.
Chevron was the most active bidders offering
$108 million
in 75 high bids - more than all the other oil majors
combined, according to energy consultants Wood Mackenzie.
A Chevron spokesperson said the No. 2 U.S. oil company
was pleased with the auction results and intends to further
evaluate the blocks' potential.
BP offered $47 million for 37 blocks. The company said it wants to expand its deepwater oil and gas production in the U.S. Gulf, which has "some of the lowest-cost and lowest-emissions barrels" in the company's portfolio.
Exxon's bids totaled less than $10 million for all 69 blocks where it was high bidder. The land was just off the Texas coast adjacent to areas it previously acquired, the BOEM indicated.
The company will work with the Department of Interior on plans for the blocks once they are awarded, Exxon spokesperson Todd Spitler said, declining to comment on commercial details.
Exxon choose shallow water areas close to the largest U.S.
refining and petrochemical complex. The blocks fit with the
company's plan to develop a carbon capture and storage (CCS)
business close to the Houston Ship Channel, home to dozens of
oil and chemical plants, says Justin Rostant, principal research
analyst at Wood Mackenzie.
Exxon has proposed a large carbon storage and hydrogen hub
in the area, and last year signed its first deal offering
decarbonization services for high-polluting industries in the
region. It plans to build a large-scale hydrogen plant for 2027
that will include carbon storage.
(Reporting by Sabrina Valle in Houston and Nichola Groom in Los
Angeles
Editing by Marguerita Choy)
