WASHINGTON, DC, Mar. 12�The US Minerals Management Service said Monday it has revised its program that allows small refiners to purchase royalty oil from federal leases.
The Federal Register notice said eligible refiners now must submit additional documentation disclosing whether the purchased oil will be subject to third-party trading agreements.
Specifically, MMS wants refiners to disclose the method and costs of delivery of royalty oil, or crude oil exchanged for the royalty oil, from the point of delivery under the contract to the purchaser's refinery.
MMS also wants copies of agreements pertaining to oil quality differences that may occur between leases and delivery points. Finally, eligible refiners who purchase royalty oil, cannot transfer, assign, or sell the rights of interest in a royalty oil contract without written approval of the MMS director.
MMS proposed the changes last August and there was no formal opposition to the plan from industry.
Eight small refiners participate in the MMS program. When oil prices were at historic lows in the late 1990s, the Clinton Administration initiated the royalty in kind plan to provide small refiners with access to adequate crude supplies at �equitable� prices. Last year MMS retooled the program so the royalty oil is sold through a more competitive bid process; refiners pay for the oil on actual deliveries they receive.