The
NewsRoom
Release #: 3029
Date: February 12, 2004
MMS Issues
Final Notice of Central Gulf Lease Sale 190
The Minerals
Management Service published in the Federal Register today the
Final Notice of Sale 190 for an offshore oil and gas lease sale to be
held in the Central Planning Area of the Gulf of Mexico. Sale 190 is
scheduled for March 17, 2004, in Grand Ballroom C (5th
floor) at the Sheraton New Orleans Hotel, 500 Canal Street, New
Orleans, Louisiana.
The final notice
includes a new royalty suspension provision affecting shallow-water
deep gas production that was not included in the proposed notice of
Sale 190. In lieu of the royalty suspension provisions recently
offered on new leases, the expanded royalty suspension provisions of
the final rule contained in 30 CFR 203.41 through 203.47, effective
March 1, 2004, will apply to leases in water depths less than 200
meters issued as a result of this sale and where new deep gas is
drilled and commences production by March 1, 2009. The provisions of
this new rule also expand royalty relief to include approximately
2,400 existing leases in the Gulf of Mexico. Recent royalty
suspension measures for deepwater oil and gas production will
continue. These provisions are designed to increase domestic natural
gas and oil production to meet our Nation's energy needs.
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New shallow-water
deep gas royalty relief - In water depths less than 200 meters,
royalty suspension for the first 15 billion cubic feet (BCF) of gas
production from wells drilled with a perforated interval, the top of
which is at least 15,000 feet total vertical depth subsea (TVD SS) and
less than 18,000 feet TVD SS, and royalty suspension for the first 25
BCF of gas production from wells drilled to a TVD SS of 18,000 feet or
greater. In addition, a royalty suspension supplement of 5 BCF is
applicable in the event of a dry hole drilled 18,000 feet subsea or
greater.. Two such supplements are available per lease prior to
production from a deep well. Sidetrack wells also may earn royalty
suspensions in amounts based upon depth and sidetrack length. A gas
price threshold of $9.34 per million British Thermal Units (MMBtu)
applies in calendar year 2004 and is adjusted thereafter for
inflation.
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Deepwater oil and gas
royalty relief in the 400-799 meter water depth zone (5 million
barrels of oil equivalent (BOE) per lease); in the 800-1,599 meter
water depth zone (9 million BOE per lease); and in the 1,600-meter and
deeper water depth zone (12 million BOE per lease). The applicable
price thresholds are $4.03 per MMBtu for gas and $32.27 per barrel for
oil expressed in year 2002 dollars and adjusted thereafter for
inflation.
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Opportunity to apply for
additional “discretionary” royalty relief in water depths greater than
200 meters, pursuant to regulations at 30 CFR 203, if certain
conditions are satisfied.
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Included in this
final notice are a recently revised Protected Species Stipulation and
a related Information-to-Lessees clause designed to minimize or avoid
potential adverse impacts to federally protected species. These
measures resulted from recent formal MMS consultations (pursuant to
the Endangered Species Act) with the National Oceanic and Atmospheric
Administration – Fisheries Service and the U.S. Fish and Wildlife
Service.
This final notice
includes a revised Information-to-Lessees clause that informs
potential bidders of three applications received by the Coast Guard
and the Maritime Administration for deepwater port and liquefied
natural gas (LNG) facilities. Two of these LNG projects have been
approved by the Maritime Administration – Port Pelican on Vermilion
Area Blocks 139 and 140 (currently unleased, but unavailable in Lease
Sale 190), and Energy Bridge on West Cameron Area, South Addition,
Block 603 (currently leased). The decision to defer leasing of
Vermilion Area Blocks 139 and 140 applies only to Lease Sale 190. The
MMS will continue to consult with the Coast Guard and Maritime
Administration to develop appropriate safeguards so that these blocks,
and others that may be affected by additional LNG deepwater port
applications, may be offered for oil and gas leasing in the future.
Included also in
this final notice is an Information-to-Lessees clause informing
potential bidders of potential sand dredging activities on Ship Shoal
Blocks 87, 88, 89, 94 and 95, South Pelto Area Blocks 12, 13, 14, 18
and 19 and West Delta Blocks 27 and 49. In addition, a new
stipulation applies specifically to Ship Shoal Blocks 87 (S½), 88, and
89 and requires lessees of these blocks to coordinate oil and gas
activities in these blocks to avoid conflict with sand-dredging
activities. MMS intends to coordinate activities of sand-dredge
vessels with oil and gas lessees to preclude any adverse time, space,
and use conflicts.
Finally, this
final notice contains a requirement that each bidder submit, by the
bid submission deadline, a Geophysical Data and Information Statement
declaring whether they possess or control depth-migrated geophysical
data and information pertaining to each block upon which they are
participating as a bidder.
Lease Sale 190
encompasses 4,324 available blocks in the Central Gulf of Mexico Outer
Continental Shelf planning area offshore Louisiana, Mississippi,
and Alabama. This area covers
about 22.7 million acres. Blocks in this sale are located from 3 to
about 210 miles offshore in water depths ranging from 4 to more than
3,425 meters. Estimates of undiscovered economically recoverable
hydrocarbons expected to be discovered and produced as a result of
this sale range from 270 to 650 million barrels of oil and 1.59 to
3.30 trillion cubic feet natural gas.
Statistical Information Lease
Sale 190
Size: |
4,324
unleased blocks; 22.7 million acres
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Initial Period:
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5 Year -
Water depths less than 400 meters - 1,390 Blocks
8 Year - Water depths between 400 and 799 meters - 128 Blocks
10 Year - Water depths between 800 meters or deeper - 2,806
Blocks
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Minimum Bids:
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$25.00 per
acre or fraction thereof - Water depths less than 800 meters -
1,518 Blocks
$37.50 per
acre or fraction thereof - Water depths 800 meters or deeper -
2,806 Blocks
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Annual Rental
Rates:
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$5.00 per
acre or fraction thereof - Water depths less than 200 meters -
1,282 Blocks
$7.50 per acre or fraction thereof - Water depths 200 meters or
deeper - 3,042 Blocks
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Royalty Rates:
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16 2/3%
Royalty - Water depths less than 400 meters - 1,390 Blocks
12 ½%
Royalty - Water depths 400 meters or deeper - 2,934 Blocks
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Royalty Relief Areas:
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0 - 199
Meter Royalty Suspension Area - 1,282 Blocks
400 - 799 Meter Royalty Suspension Area - 128 Blocks
800 - 1,599
Meter Royalty Suspension Area - 231 Blocks
1,600 Meters and Greater Royalty Suspension Area - 2,575 Blocks
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Royalty
Suspension Volumes: |
1,282
blocks subject to shallow-water deep gas incentive
108 blocks
with no automatic royalty relief
128 blocks subject to 5-MMBOE relief
231 blocks
subject to 9-MMBOE relief
2,575 blocks subject to 12-MMBOE relief
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The
Minerals Management Service is the federal agency in the U.S.
Department of the Interior that manages the nation’s oil, natural gas,
and other mineral resources on the Outer Continental Shelf in Federal
offshore waters. The agency also collects, accounts for, and
disburses mineral revenues from Federal and American Indian lands.
MMS disbursed more than $8 billion in FY 2003 and more than
$135 billion since the agency was created in 1982. Nearly $1 billion
from those revenues go into the Land and Water Conservation Fund
annually for the acquisition and development of state and Federal park
and recreation lands.
Relevant Web Sites
MMS Main Website:
www.mms.gov
Gulf of Mexico Website:
www.gomr.mms.gov
Media Contacts
Debra Winbush
(504) 736-2597
Caryl Fagot
(504) 736-2590
MMS: Securing Ocean Energy & Economic Value for
America
U.S. Department of the Interior |