Oil groups seek royalty rule delay

IPAA and API are urging the US Minerals Management Service to delay the June 1 implementation of its controversial oil royalty reform rule. While the groups have sued to overturn the rule, they say it would be very difficult to persuade a federal judge to issue an injunction to prevent the rule from taking effect.


SAN FRANCISCO�Producers groups are urging the US Minerals Management Service to delay the June 1 implementation of its controversial oil royalty reform rule.

MMS issued the rule, 3 years in the making, on Mar. 15. The Independent Petroleum Association of America and the American Petroleum Institute subsequently sued to overturn the rule. But the two groups say it would be very difficult to persuade a federal judge to issue an injunction to prevent the rule from taking effect.

Ben Dillon, IPAA vice-president for political affairs, told the group�s meeting in San Francisco last Friday that IPAA and API have urged MMS Director Walt Rosenbusch to delay the regulation.

Separately, IPAA said it is working with MMS to facilitate the federal government�s taking of oil royalties in-kind rather than in cash.

David Blackmon, of Burlington Resources Oil & Gas Co., said IPAA is discussing with MMS what legislation the agency needs in its �tool kit� to simplify the bidding process, allow greater state participation, and achieve other goals. �It looks like we can mark up something that we and MMS can both live with,� Blackmon said.

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