DOI Signs Agreement on 1998/1999 Lease

Friday, December 15, 2006
s ssistant Secretary of Land and Minerals Management, C. Stephen Allred signed agreements with BP, ConocoPhillips, Marathon Oil Company, Shell, and Walter Oil and Gas Corporation, addressing deepwater Gulf of Mexico offshore oil and gas leases issued in 1998 and 1999. Under the agreements these companies will pay royalties on oil and gas produced under leases issued in 1998-1999. Revenue will be received for products starting from October 1, 2006 onward.

Deepwater leases issued during this time included a royalty incentive to encourage companies to explore for oil and gas in areas where the costs to explore and produce were high. The incentive allowed companies to produce a set volume of oil and gas before they would begin paying royalties. The incentive would not apply if market prices exceeded a certain threshold. However, for leases issued during the Clinton administration in 1998 and 1999, a price threshold was omitted and, as a result, companies have not been required to pay royalties until all of the incentive volume was produced, even when prices are high. Today’s agreement will remedy this omission for production that occurs on or after October 1, 2006. Few leases produced oil and gas before that date.

Since the first lease offering of federal offshore tracts in 1954, MMS has entered into 25,532 leases with oil and gas companies. These leases, which cover more than 133 million acres, have netted a total of $65.5 billion in bonus bids. In 2005 alone, MMS entered into 872 leases resulting in bonus bids totaling $678,637,123. MMS collects $10 billion each year in revenues for the federal treasury.

Maritime Reporter October 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds


US Shipowner Creates Fund for Families of Missing El Faro Crew

The owners of the cargo ship El Faro that sank after it was trapped in the path of Hurricane Joaquin off the Bahamas last week announced the creation of a family

Coast Guard Foundation Raises $250,000 for Scholarships

The Coast Guard Foundation, a nonprofit organization committed to the education and welfare of all Coast Guard members and their families, announced today that

Newport News Shipbuilding Converts to Natural Gas

Huntington Ingalls Industries (HII) announced today that its Newport News Shipbuilding division has converted its steam-generation plant from heavy fuel oil, also known as Bunker C,

Maritime Contracts Maritime Security Maritime Standards Navigation Offshore Oil Pipelines Port Authority Ship Repair Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1443 sec (7 req/sec)