C0-29372. Relief or Reduction in Royalty RatesDeep Water Royalty Relief for OCS Oil and Gas Leases Issued After 2000  

  • [Federal Register Volume 65, Number 226 (Wednesday, November 22, 2000)]
    [Corrections]
    [Pages 70386-70387]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: C0-29372]
    
    
    =======================================================================
    -----------------------------------------------------------------------
    
    DEPARTMENT OF THE INTERIOR
    
    Minerals Management Service
    
    30 CFR Part 203
    
    RIN 1010-AC71
    
    
    Relief or Reduction in Royalty Rates--Deep Water Royalty Relief 
    for OCS Oil and Gas Leases Issued After 2000
    
    Correction
    
        In proposed rule document 00-29372 beginning on page 69259 in the 
    issue of Thursday, November 16, 2000, make the following corrections:
        1. On page 69263, the table headings are corrected to read as 
    follows:
    
    
                   Proposed Modifications to DWRR Applications
    ------------------------------------------------------------------------
                                          Current and      Proposed changes
                                      continuing program -------------------
                 Element             --------------------  Applies to post-
                                      Applies to pre-Act    2000 deep water
                                            leases              leases
    ------------------------------------------------------------------------
    Eligibility (Central, Western,    Leases in 200m or   Leases in 200m or
     and western part of Eastern       more water depth    more water depth
     Gulf of Mexico).                  issued before       issued after
                                       1996.               2000.
    Royalty-free production can come  Any production      Only production
     from.                             from the field      from resources
                                       until cumulative    identified in the
                                       recovery volume     application until
                                       equals the          cumulative
                                       suspension volume.  recovery equals
                                                           the suspension
                                                           volume
    Minimum suspension volume for     For fields that     For development
     non-producing leases.             did not produce     projects, matches
                                       before the Act,     volumes
                                       matches eligible    designated in
                                       lease suspension    sale and lease
                                       volumes (17.5,      documents for
                                       52.5, 87.5 MMBOE)   various water
                                       in equivalent       depths of 200m or
                                       water depths.       greater plus 10
                                                           percent of
                                                           reserves.
    Credit for sunk costs in          For fields with     For development
     application.                      pre-Act leases      projects, after-
                                       that did not        tax cost of only
                                       produce before      the discovery
                                       the application,    well, except when
                                       after-tax costs     the application
                                       of and after        involves a pre-
                                       discovery well      Act lease.
                                       used in
                                       qualification.
    Threshold oil and gas price       Statute sets        Lease terms set
     levels for lifting relief.        threshold price     threshold price
                                       for light sweet     for light sweet
                                       crude oil and       crude oil and
                                       natural gas.        natural gas.
    ------------------------------------------------------------------------
    
        2. On page 69264, the table headings are corrected to read as 
    follows:
    
    
    [[Page 70387]]
    
    
    
                   Proposed Modifications to DWRR Applications
    ------------------------------------------------------------------------
                                          Current and      Proposed changes
                                         discontinuing   -------------------
                                            program
                 Element             -------------------- Applies to pre-Act
                                      Applies to pre-Act  and post-2000 deep
                                            leases           water leases
    ------------------------------------------------------------------------
    Discount rate used in evaluation  Same rate used on   Use 10% on
                                       viability and       viability test,
                                       profitability       applicant chooses
                                       tests, applicant    rate between 10%
                                       chooses between     and 15% for
                                       10% and 15%.        profitability
                                                           test.
    Redetermination of field          Available for new   Available anytime
     qualification or volume by MMS.   well or seismic     after relief
                                       data, 25% lower     relinquished or
                                       prices, or 20%      withdrawn.
                                       higher cost.        Otherwise, for
                                                           new well or
                                                           seismic data, 25%
                                                           lower prices, 20%
                                                           higher cost, or
                                                           more efficient
                                                           development
                                                           system.
    Deadline for starting             Within 1 year of    Within 18 months
     fabrication.                      approval,           of approval,
                                       extendable for up   extendable for up
                                       to 1 year.          to 6 months.
    Correction for overestimating     Retain only half    Retain only half
     cost by 20% or more.              of suspension       or smaller of
                                       volume granted.     granted
                                                           suspension volume
                                                           or most likely
                                                           resource size.
    Minimum suspension volume for     None..............  10 percent
     expansion project.                                    reserves.
    Credit for sunk costs in          None..............  After-tax cost of
     application for expansion                             the discovery
     project.                                              well.
    ------------------------------------------------------------------------
    
    Sec. 203.74  [Corrected]
    
        3. On page 69273, in the second column, in the section heading, 
    ``Sec. 203.70'' should read ``Sec. 203.74''.
    [FR Doc. C0-29372 Filed 11-21-00; 8:45 am]
    BILLING CODE 1505-01-D
    
    
    

Document Information

Published:
11/22/2000
Department:
Minerals Management Service
Entry Type:
Correction
Document Number:
C0-29372
Pages:
70386-70387 (2 pages)
RINs:
1010-AC71: Deep Water Royalty Relief for Outer Continental Shelf Oil and Gas Leases Issued After 2000
RIN Links:
https://www.federalregister.gov/regulations/1010-AC71/deep-water-royalty-relief-for-outer-continental-shelf-oil-and-gas-leases-issued-after-2000
PDF File:
c0-29372.pdf
CFR: (1)
30 CFR 203.74