Federal leases

The following statement of API Pres. Red Cavaney quoted on p. 34 of your Oct. 18, 1999, issue is simply false:"He said oil companies' leases with the government require them to pay royalties based on the value of production at the lease, but MMS is tryng to establish royalty values at points downstream."There never has been any provision in federal leases for valuation of production at the lease.The OCS leases, which currently account for more than 84% of federal oil production, provide that "[t]he value of production for purposes of computing royalty on production from this lease shall never be less than the fair market value of the production," and "shall not be deemed to be less tha...

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