The U.S. House of Representatives has voted 261-160 to retain a provision that would allow the Interior Department to grant royalty relief for marginally economic deepwater oil and gas fields in the central and western Gulf of Mexico.
The provision is part of a bill to allow exports of Alaskan North Slope (ANS) crude, which passed 28%134.
The Clinton administration supported the deepwater royalty provision. In July, the House had voted 261155 against deepwater royalty relief.
After the Senate approves the House-Senate conference committee bill, it will go to President Clinton for his signature (OGJ, Oct. 9, p. 42).
The royalty relief measure would allow Interior to waive royalties on production of 17.5 million bbl of oil equivalent from fields in water depths of 200-400 m, 52.5 million bbl in waters of 400-800 m, and 87.5 million bbl from fields in more than 800 m. The bill also allows more flexibility in royalty relief for existing leases in deep water.
Proponents of the bill said it would 'not cost the federal government money because it affects fields that otherwise would not be produced. The Congressional Budget Office (CBO) estimated the provision would generate $130 million for the government during 7 years.
CBO said the export provision would raise $50 million for the federal government during 5 years.
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