The U.S. Minerals Management Service has scheduled central Gulf of Mexico lease Sale 166 for Mar. 5 in New Orleans.
The sale will offer 5,063 blocks covering 27.2 million acres 3-200 miles offshore in water depths from 4 m to more than 3,425 m.
Cynthia Quarterman, MMS director, said, "This is the second central Gulf of Mexico sale in which blocks receiving bids in water depths of 200 m or more are eligible for consideration under the Deep Water Royalty Relief Act.
"The results of central Gulf Sale 157, held Apr. 24, 1996, clearly indicated that royalty relief was a tremendous success by setting an all-time leasing record on the number of bids received and number of blocks leased.
"In Sale 166, there are 3,959 blocks in water depths of 200 m or more. I don't know if this sale will be a record setter like Sale 157, but I am confident that there will be considerable industry interest and that the coffers of the U.S. Treasury will be fuller as a result."
The 1995 law act allows MMS to suspend royalties on 17.5 million bbl of oil equivalent (BOE) from fields in 200-400 m of water, 52.2 million BOE in 400-800 m of water, and 87.5 million BOE in more than 800 m.
Leases will carry varying terms, depending on water depth. Blocks in less than 400 m are leased for 5 years, in 400-800 m for 8 years, and deeper than 800 m for 10 years.
Also, 1,197 of the blocks are in less than 400 m of water and carry a one-sixth royalty, while the remaining 3,866 blocks are in deeper water and are subject to a one-eighth royalty.
Copyright 1997 Oil & Gas Journal. All Rights Reserved.
