(The Center Square) – A well yielding “high-quality” oil discovered off the Louisiana coast in the Gulf of America by a partnership of three international energy companies should boost the state’s tax revenues for coastal restoration beginning as early as 2027.
Houston-based Occidental Petroleum and partners Chevron and Woodside Energy discovered high-quality oil-bearing Miocene sands at a depth of 36,535 feet at the “Bandit” prospect about 125 miles south of Morgan City. The Bandit well is 17 feet shallower than the Ardennes well, the deepest ever drilled in the Gulf.
To avoid the years-long process of building a new platform, the companies are evaluating “subsea tie-back” technology to link the find to existing infrastructure, according to Occidental. This strategy could bring the well into production in a year or less, potentially allowing royalties to begin flowing as early as 2027 to coastal communities in Louisiana and other Gulf Coast states.
Under the Gulf of Mexico Energy Security Act (GOMESA) of 2006, Louisiana, Texas, Mississippi, and Alabama receive 37.5% of the federal royalties, bonus bids, and rentals generated from offshore energy production.
“Occidental is focused on strengthening our Gulf of America portfolio,” said Jeff Simmons, Senior Vice President, Subsurface Technology and Chief Petrotechnical Officer. “We believe this discovery demonstrates the continued importance of the region as a strategic source of reliable domestic oil supply that supports long-term energy security.”
Chevron Vice President of Exploration Kevin McLachlan said the Bandit discovery highlights the Gulf’s high-quality development opportunities. “We are working with our co-owners to advance appraisal and development planning in a disciplined manner, leveraging existing infrastructure to help deliver competitive barrels,” McLachlan said.
Louisiana’s share hit a record $203.7 million for the 2025 fiscal year, a significant increase from the approximately $156 million received annually in previous years when the state’s share was limited by a federal revenue-sharing cap.
House Majority Leader Steve Scalise, R-La., secured language in the Working Families Tax Cut, signed into law in July 2025, to raise that annual cap from $500 million to $650 million.
Scalise noted that when the legislation passed, the resulting $46 million annual boost for Louisiana would be dedicated to protecting the lives and livelihoods of people living in Southeast Louisiana.
“Most people in Louisiana recognize we’ve got to put money into restoring our coast,” Scalise told Fox 8 in New Orleans on a trip to visit an oil rig on Thursday. “It’s a major problem that’s a threat to our existence as a state,” Scalise said.
Under the Louisiana Constitution, the state directs 80% of its share into the Coastal Protection and Restoration Trust Fund for large-scale infrastructure, while the remaining 20% distributed directly to the state’s 19 coastal parishes for local drainage and flood control projects. The new funding is seen by government officials in coastal communities as vital as disbursements of settlement money from the 2010 BP oil spill wind down and end in 2031-2032.
Louisiana could gain an extra $460 million over the next decade, if the cap is hit each of those years.
For the 2026 fiscal year, the Department of the Interior announced that $92 million would be distributed directly to counties and parishes along the Gulf Coast, an increase of over $20 million from the previous year.
St. Mary Parish, which includes Morgan City, received a payout of approximately $1.87 million in the 2026 fiscal year. Lafourche Parish received $4.5 million in direct program funding.
In fiscal year 2026, the most in Louisiana, followed by Terrebonne Parish at $3.8 million and Plaquemines Parish at $3.5 million.
St. Mary Parish President Sam Jones supports coastal restoration projects that include the Bayou Chene floodgate and Shoreline Protection in West Cote Blanche Bay.
