The U.S. Minerals Management Service has altered two of its policies to help keep offshore fields in production during the current oil price slump.
For the second time in 5 months, MMS devalued the price forecasts it applies when it considers leaseholders' applications for deepwater royalty relief.
Operators of fields in more than 200 m of water in the central and western Gulf of Mexico can apply for a suspension of royalty payments upon demonstrating economic need.
The agency also revised its guidelines for leaseholders applying for end-of-life royalty relief. Under the old process, a lessee that has invested significant resources to reduce production costs would be required to wait at least a year before applying for end-of-life royalty relief.
Under the new approach, a lessee that has made a commitment of capital and met additional criteria could apply immediately.
Associate MMS Director Carolita Kallaur said, "When the price of oil falls, it can simply make continued production of a given oil field uneconomic.
"MMS would like to make sure that industry has every opportunity to make a project economic, rather than the nation losing the oil and gas resources that would be left behind if the wells are abandoned early."
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