The US Minerals Management Service is expanding its oil and gas royalty in-kind pilot projects.
It is testing procedures to take and sell royalty production as an alternative to the usual practice of taking a cash royalties based on the lessee's sale of production.
MMS and Wyoming plan to sell 4,900 b/d of federal and state royalty oil for 6 months beginning Apr. 1. Production is from 85 federal or state leases in the Bighorn and Powder River basins.
Bids will be accepted on specific pipeline subgroups and on entire packages of Wyoming sweet, sour, and asphaltic sour crude.
The current sale includes 3,250 b/d and ends Mar. 31.
MMS also plans to expand its sale of Gulf of Mexico offshore royalty gas. It will offer 200 MMcfd from two additional pipeline systems, Bluewater and Sea Robin (OGJ, Jan. 24, 2000, p. 27). It will reoffer 265 MMcfd from leases connected to the Stingray, Pelican, High Island Offshore, and Transco North High Island gathering systems.
Royalty gas from the latter properties is being sold under contracts that expire Mar. 31.
The bids must offer to exchange royalty gas delivered at the platform for gas supplies onshore. The General Services Administration will distribute the onshore gas to various government facilities.
