The US Minerals Management Service will suspend royalties on the first 87.5 million boe that Chevron USA Inc. produces from Green Canyon Block 236 field off Louisiana.
The field, nicknamed Typhoon, is located 173 miles southwest of New Orleans, and lies partially in water deeper than 800 m. Chevron operates the leases in the Green Canyon Block 236 field, which also includes Green Canyon Block 237. Green Canyon is the fifth field to get royalty relief from MMS since 1995.
"Chevron's Typhoon project demonstrates the important positive role that our discretionary royalty relief program can play in deepwater exploration and development decisions," MMS Director Walt Rosenbusch said. "Operators can now explore risky high-cost prospects with more confidence, knowing that they may qualify for royalty relief if they make a discovery that is uneconomic with the inclusion of sunk costs."
The Deep Water Royalty Relief Act, signed by President Bill Clinton in November 1995, allows the Interior Department to grant royalty suspension on both producing and non-producing fields in water deeper than 200 m to promote development, increase production, or encourage marginal production of Gulf of Mexico leases.