42 U.S.C. § 15905: Royalty relief for deep…

Summary

Leases for oil or gas in parts of the Gulf of Mexico deeper than 400 meters must use the bidding method from section 8(a)(1)(H) of the Outer Continental Shelf Lands Act when the lease sale happens during the five-year period that began on August 8, 2005. This applies in the Western and Central Planning Areas and the part of the Eastern Planning Area lying west of 87 degrees, 30 minutes West longitude. Royalty payments can be paused until a set amount is produced. The minimum suspended volumes are 5,000,000 barrels of oil equivalent per lease for 400–800 meters; 9,000,000 for 800–1,600 meters; 12,000,000 for 1,600–2,000 meters; and 16,000,000 for deeper than 2,000 meters. The Secretary may limit these royalty breaks based on market price.

Title 42, §15905

The Public Health and Welfare, Source: USLM XML via OLRC

(a)In general

Subject to subsections (b) and (c), for each tract located in water depths of greater than 400 meters in the Western and Central Planning Area of the Gulf of Mexico (including the portion of the Eastern Planning Area of the Gulf of Mexico encompassing whole lease blocks lying west of 87 degrees, 30 minutes West longitude), any oil or gas lease sale under the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) occurring during the 5-year period beginning on August 8, 2005, shall use the bidding system authorized under section 8(a)(1)(H) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(a)(1)(H)).

(b)Suspension of royalties

The suspension of royalties under subsection (a) shall be established at a volume of not less than—

(1)5,000,000 barrels of oil equivalent for each lease in water depths of 400 to 800 meters;

(2)9,000,000 barrels of oil equivalent for each lease in water depths of 800 to 1,600 meters;

(3)12,000,000 barrels of oil equivalent for each lease in water depths of 1,600 to 2,000 meters; and

(4)16,000,000 barrels of oil equivalent for each lease in water depths greater than 2,000 meters.

(c)Limitation

The Secretary may place limitations on royalty relief granted under this section based on market price.

Notes & Related Subsidiaries

Editorial Notes

References in Text

The Outer Continental Shelf Lands Act, referred to in subsec. (a), is act Aug. 7, 1953, ch. 345, 67 Stat. 462, which is classified generally to subchapter III (§ 1331 et seq.) of chapter 29 of Title 43, Public Lands. For complete classification of this Act to the Code, see

Short Title

note set out under section 1301 of Title 43 and Tables.

§15905 Royalty Relief for Deep Water Production