The
NewsRoom
Release #: 3071
Date: April 7, 2004
Royalty-in-kind Gas Sale Attracts Top Bids
Approximately 329,000 MMBtu (million British
Thermal Units) of royalty-in-kind (RIK) gas produced from federal
leases in the Gulf of Mexico was sold to eight companies during a
March sale conducted by the Department of the Interior’s Minerals
Management Service.
The sale provides for
the royalty-in-kind gas to be delivered to 11 offshore pipeline
systems originating in the Gulf of Mexico, and destined for consumer
and industry use primarily during this summer’s cooling season.
Deliveries under these sales began April 1, 2004.
“The competition for
this sale was extremely strong,” said Minerals Management Service
Director Johnnie Burton, noting that 17 companies offered a total of
86 bids for the specific sales packages. “Taking this royalty gas
in-kind,” Burton added, “reduces administrative and operational costs
and is a win-win for both industry and government.”
Winning companies in
this month’s sale represented large integrated producers and
affiliates of local distribution companies. Winners included Dominion
Producers Service Inc., Houston Pipeline Company (HPL), Cinergy
Marketing & Trading, Coral Energy, Louis Dreyfus, Bridgeline, BP
Energy Co., and ConocoPhillips.
The gas
“royalty-in-kind” effort, originally begun as a pilot program in the
latter 1990s, continues to provide strong returns to the federal
government and taxpayers. Historically, the government collected most
royalty revenues in the form of “royalty-in-value” cash payments made
by those who lease and produce gas on federal lands. Taking
“royalty-in-kind,” in the form of product when economics favor its
use, allows the government to optimize taxpayer assets, reduce
regulatory costs and reporting requirements, and improve overall
business efficiencies.
MMS 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. Between 1982 and 2003, MMS
distributed more than $135 billion in revenues from onshore and
offshore lands, an average of more than $6 billion per year, to the
Nation, States and American Indians. Nearly $1 billion from those
revenues go into the Land and Water Conservation Fund annually for the
development of State and Federal park and recreation lands.
Relevant Web Sites
MMS Main Website
Media Contacts
Patrick Etchart
(303) 231-3162
Nicolette Humphries
(202) 208-3985
MMS: Securing Ocean Energy & Economic Value for
America
U.S. Department of the Interior |