MMS offers Gulf of Mexico royalty oil

The US Minerals Management Service is planning its first pilot project offering federal royalty oil from Gulf of Mexico leases. The agency plans to offer 35,000 b/d of oil from 58 federal leases in the gulf. Delivery will be for a 6-month period beginning Nov. 1, with the opportunity for a 6-month extension.


Washington, DC�The US Minerals Management Service is planning its first pilot project offering federal royalty oil from Gulf of Mexico leases.

MMS has sold the government�s share of gas production, taken as royalty in-kind (RIK) from selected leases in previous and ongoing pilot projects.

The agency plans to offer 35,000 b/d of oil from 58 federal leases in the gulf. Delivery will be for a 6-month period beginning Nov. 1, with the opportunity for a 6-month extension.

MMS Director Walt Rosenbusch said, "This is the fist sale of RIK oil open to all bidders. Previous oil sales have been open exclusively to eligible small refiners.

"We believe that taking oil royalties as a share of production from the properties offered in this sale is a viable alternative to the usual practice of collecting oil royalties in cash. MMS will monitor the effectiveness of the RIK approach to taking crude oil royalties in the Gulf of Mexico."

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