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Recent U.S. offshore oil and gas lease bidding: A progress report

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Author Info

  • Haile, Philip
  • Hendricks, Kenneth
  • Porter, Robert

Abstract

We describe 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.

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Bibliographic Info

Article provided by Elsevier in its journal International Journal of Industrial Organization.

Volume (Year): 28 (2010)
Issue (Month): 4 (July)
Pages: 390-396

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Handle: RePEc:eee:indorg:v:28:y:2010:i:4:p:390-396

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Web page: http://www.elsevier.com/locate/inca/505551

Related research

Keywords: Auctions Bidding Offshore oil and gas leases;

References

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  1. Hendricks, Kenneth & Porter, Robert H, 1992. "Joint Bidding in Federal OCS Auctions," American Economic Review, American Economic Association, vol. 82(2), pages 506-11, May.
  2. Philip A. Haile & Han Hong & Matthew Shum, 2003. "Nonparametric Tests for Common Values in First-Price Sealed-Bid Auctions," Cowles Foundation Discussion Papers 1445, Cowles Foundation for Research in Economics, Yale University.
  3. Hendricks, Kenneth & Porter, Robert H, 1988. "An Empirical Study of an Auction with Asymmetric Information," American Economic Review, American Economic Association, vol. 78(5), pages 865-83, December.
  4. Robert H. Porter, 1992. "The Role of Information in U.S. Offshore Oil and Gas Lease Auctions," NBER Working Papers 4185, National Bureau of Economic Research, Inc.
  5. Hendricks, Kenneth & Porter, Robert H, 1996. "The Timing and Incidence of Exploratory Drilling on Offshore Wildcat Tracts," American Economic Review, American Economic Association, vol. 86(3), pages 388-407, June.
  6. Athey, Susan & Haile, Philip A., 2007. "Nonparametric Approaches to Auctions," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 6, chapter 60 Elsevier.
  7. Hendricks, Kenneth & Porter, Robert H & Wilson, Charles A, 1994. "Auctions for Oil and Gas Leases with an Informed Bidder and a Random Reservation Price," Econometrica, Econometric Society, vol. 62(6), pages 1415-44, November.
  8. Ken Hendricks & Robert Porter & Guofu Tan, 2008. "Bidding rings and the winner's curse," RAND Journal of Economics, RAND Corporation, vol. 39(4), pages 1018-1041.
  9. C. E. Moody, Jr. & W. J. Kruvant, 1990. "OCS Leasing Policy and Lease Prices," Land Economics, University of Wisconsin Press, vol. 66(1), pages 30-39.
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Cited by:
  1. Skrzypacz, Andrzej, 2013. "Auctions with contingent payments — An overview," International Journal of Industrial Organization, Elsevier, vol. 31(5), pages 666-675.

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