Summary: In response to a request, GAO reviewed the Department of the Interior's Southeast Georgia Embayment Outer Continental Shelf (OCS) Lease Sale 43. The lease program's primary objectives are to promote the timely and orderly exploration and development of OCS lands, to help assure that the public receives fair market value for those lands, and (in doing this) to protect the environment.
The review of the Georgia Embayment sale indicated that, like previous OCS sales reviewed, the data available to select and value tracts was limited and, in some cases, less than in the prior sales reviewed. In addition, the degree of industry interest in the Georgia Embayment sale was significantly less than in prior sales, mainly because the area was believed to have limited geologic potential. Had more information been available on this as well as other OCS areas prior to scheduling this area for sale, perhaps the area would not have been put up for sale at this time. Another significant aspect of this sale (unlike the prior sales reviewed) was the experimental use of a sliding scale royalty bidding system on about one-third of the tracts offered for sale. Such a system relates public revenues to resources eventually produced better than the bidding systems previously used. Thus, GAO believes that this new bidding system has potential for helping to assure that the public receives a fair market value return for OCS resources.
