§ 1206.119 - How do I determine royalty quantity and quality?

§ 1206.119 How are do I determine royalty quantity and quality determined?

(a) Compute You must calculate royalties based on the quantity and quality of oil as measured at the point of royalty settlement approved by that BLM for onshore leases or BSEE approves for offshore onshore leases and OCS leases, respectively.

(b) If you base the value of oil determined under this subpart is based upon on a quantity and/or quality that is different from the quantity and/or quality at the point of royalty settlement approved by the BLM for onshore leases that BLM or BSEE for offshore leasesapproves, you must adjust the that value for those the differences in quantity and/or quality.

(c) You may not make any deductions from the royalty volume or royalty value for actual or theoretical losses. Any actual loss that you may incur sustain before the royalty settlement metering or measurement point is not subject to royalty if BLM or BSEE, as whichever is appropriate, determines that the such loss is was unavoidable.

(d) Except as provided in paragraph (b) of this section, royalties are due You must pay royalties on 100 percent of the volume measured at the approved point of royalty settlement. You may not claim a reduction in that measured volume for actual losses beyond the approved point of royalty settlement or for theoretical losses that are claimed you claim to have taken place either before or after the approved point of royalty settlement.