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Deepwater
Deepwater royalty relief consists of
discretionary relief and relief that does not require an
economic evaluation. Discretionary relief requires an application
demonstrating economic need whereas there is no application process for
the relief that does not require an economic evaluation.
Discretionary relief applies to "fields" with leases
issued prior to passage of the Deepwater Royalty
Relief Act of 1995 (i.e., November 28, 1995) in water depths 200 meters or
deeper that lie wholly west of 87 degrees, 30 minutes
West longitude. These leases are called
pre-Act leases. By
regulation, deepwater royalty relief for pre-Act leases can not be approved for
"fields" containing a current lease that produced prior to the passage of the
Act.
Relief
not requiring an economic evaluation applies to leases issued from sales
held in years 1996 through 2000 in water depths 200 meters or deeper
that lie wholly west of 87 degrees, 30 minutes West
longitude. These leases are called
"eligible" leases. Pursuant to the
decision by the United States Court of Appeals for the fifth Circuit in Santa
Fe Synder Corp., et al. v. Norton, deepwater royalty relief for "eligible
leases" is no longer applicable on a "field" basis [See
Information to
Lessees and Operatorys (ITL) dated August 8, 2005].
Eligible leases may also
be able to apply for discretionary relief under
End-of-Life and Special Case Relief programs.
In addition, leases resulting from a Sale held after year 2000 may be issued
with a designated royalty suspension volume on a "lease" basis.
Post-2000
leases issued with a designated royalty suspension volume are called
"Royalty Suspension" leases. The
Lease Instrument and Final Notice of Sale specify the applicable
water depth categories and royalty suspension volumes. All Post-2000 leases in water depths greater than 200 meters are also
eligible to apply for discretionary relief.
Please
refer to the regulations and guidelines listed below for more information.
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"Pre-Act" Lease Information
Regulations
for Discretionary Relief (See 30 CFR 203.60-91)
Guidelines for the Application,
Review, Approval, and Administration of the Deepwater Royalty Relief
Program For Pre-Act Leases and Post-2000 Leases
- Appendix (I), NTL No. 2002-N02;
Effective: February 14, 2002
Deepwater Royalty
Relief Economic Model: Economic Model Documentation, Model
Spreadsheet, and Example Files
Economic Assumptions for RSVP Deep Water
Royalty Relief Model - Click on "Most Recent Parameter
Updates" under Key Documents and Sources.
Application Fees for Royalty Relief
Requests - NTL. No. 98-5N
Field Naming Handbook, March 1996 - A
guide and reference document to the field naming process for leases with qualifying oil
and gas discoveries. Updated December 1997.
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Post-Act "Eligible" Lease Information
Deepwater Royalty Relief Regulations for Eligible Leases
(See 30 CFR 260.112-117)
- "Post-2000" Lease Information
Designated Royalty Suspension Provisions –
Deepwater Royalty Relief Regulations for Royalty Suspension
Leases (See 30 CFR 260.120-124)Refer to your Lease
Instrument and/or Final Notice of Sale starting with Sale 178, Part1.
Discretionary Royalty Suspension Provisions
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Regulations
for Discretionary Relief (See 30 CFR 203.60-91)
Guidelines for the Application,
Review, Approval, and Administration of the Deepwater Royalty Relief
Program For Pre-Act Leases and Post-2000 Leases
- Appendix (I), NTL No. 2002-N02;
Effective: February 14, 2002Deepwater Royalty
Relief Economic Model: Economic Model Documentation, Model
Spreadsheet, and Example Files
Economic Assumptions for RSVP Deep Water
Royalty Relief Model - Click on "Most Recent Parameter
Updates" under Key Documents and Sources.
Application Fees for Royalty Relief
Requests - NTL. No. 98-5N
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Shallow Water Deep Gas Incentives
As stipulated in the Lease Instrument and Final Notice of Lease Sale, certain
leases may be eligible for a royalty suspension volume
for shallow water (< 200 meters) deep gas production.
Refer to your Lease Instrument and the following:
Final Notice of Sale for Central Gulf of Mexico Lease Sale 178, Part 1
Final Notice of Sale for Western Gulf of Mexico Lease Sale 180
Final Notice of Sale for Central Gulf of Mexico Lease Sale 182
Final Notice of Sale for
Western Gulf of Mexico Lease Sale 184
Final Notice of Sale
for Central Gulf of Mexico Lease Sale 185
Final Notice of Sale
for Western Gulf of Mexico Lease Sale 187
Pursuant to 30 CFR 203.48, most of these leases have
converted to the deep gas royalty relief provisions in the final rule.
In addition to leases with shallow water deep gas royalty
relief provisions in their Lease Instruments, certain other leases may be
eligible for shallow water deep gas royalty relief through the Deep Gas in
Shallow Water Rule. For additional information, please refer to the
following sources:
Deep
Gas in Shallow Water Final Rule (January 26, 2004)
Deep Gas in
Shallow Water Final Rule - Technical Amendments (April 30, 2004)
Relief or
Reduction in Royalty Under Certain Federal Oil and Gas Leases on the Outer
Continental Shelf (April 30, 2004)
Correction to the Deep Gas in Shallow Water Final Rule - Technical Amendments
(May 7, 2004)
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End-of-Life Royalty Relief
End-of-life relief is applicable to producing leases regardless of water
depth when it can be shown that the economic limit has been reached and relief
will result in "increased production."
If approved,
the royalty rate will be reduced by half subject to certain stipulations.
Please
refer to the regulations and guidelines listed below
for more information.
Regulations
for Discretionary Relief (See 30 CFR 203.50-56)
Guidelines for the Application,
Review, Approval, and Administration of the Royalty Relief
for End-of-Life Leases; Appendix (II), NTL
No. 02-N02; Effective February 14, 2002
End-Of-Life Leases Spreadsheet
(Excel)
Application Fees for Royalty Relief
Requests Under 30 CFR 203 - NTL No. 98-5N
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Special Case Relief
Relief can be requested when our formal programs provide
inadequate encouragement to increase production or development.
Other conditions
must also be met in order to submit an application.
If
you believe your situation meets the conditions for special case relief, you
should submit data and arguments to the Regional Supervisor for Production and
Development in the Gulf Of Mexico Region. If we agree you meet the
required conditions, guidance will be provided
concerning the application and the appropriate fee.
For more details, please refer to the information listed below.
Regulations
for Discretionary Relief (See 30 CFR 203.80)
Economic Assumptions for RSVP Deep Water
Royalty Relief Model - Click on "Most Recent Parameter
Updates" under Key Documents and Sources.
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General Information
Oil and
Gas Price Thresholds
Listing of Deepwater Royalty Relief
Applications
News Releases related to Deepwater Royalty
Relief