MMS raises royalty for OCS Sales 206 and 224
The US government has raised the royalty rate on new offshore leases for the second time this year.
By OGJ editors
HOUSTON, Oct. 31 -- The US government has raised the royalty rate on new offshore leases for the second time this year.
In proposals for Outer Continental Lease Sales 206, covering the Central Gulf of Mexico, and 224, covering the Eastern Gulf, the Minerals Management Service stipulates a royalty rate of 18.75%. The standard royalty has been 16.7%. The sales are scheduled Mar. 19, 2008.
Last January, MMS raised the royalty on new deepwater leases to 16.7% from 12.5% (OGJ, Jan. 15, 2007, p. 37).
MMS proposes to offer 5,000 blocks covering more than 28.5 million acres in the Central Gulf. Water depths of some blocks exceed 11,200 ft. Sale 206 covers the same area that Central Gulf Sale 205 did Oct. 3.
Sale 205 drew apparent high bids totaling more than $2.9 billion—the second highest total in US leasing history—for 723 tracts (OGJ, Oct. 15, 2007, Newsletter).
In Sale 224, MMS proposes to offer 118 whole or partial unleased blocks covering 547,230 acres in the Eastern Gulf. Water depths are 2,675-10,213 ft.
It would be the first offering of these Eastern Gulf blocks since 1988.