The
NewsRoom
Release #: 3125
Date: August 30, 2004
MMS, Wyoming
team up for RIK crude sale
Contracts of approximately 2,500
barrels per day of Royalty in Kind (RIK) crude oil were awarded to
three companies this month as part of a joint sale conducted by the
Department of the Interior’s Minerals Management Service (MMS) and the
State of Wyoming.
The sale included both Federal and
State of Wyoming crude oil. Deliveries on the contracts will begin
Oct. 1, 2004, and will continue for six months.
Offers were received from five
parties. Winning bidders included Teppco Crude Oil, L.P.; Nexen
Marketing U.S.A., Inc.; and Eighty-Eight Oil. Awards included all of
the offered sweet and portions of the asphaltic and newly offered
Green River condensate. No general sour production was awarded.
The Aug. 11 sale is the 13th
in a series of joint sales dating back to 1998 when the State of
Wyoming and the MMS first entered into the Wyoming Oil Pilot Program.
As in previous sales, MMS and the state will take royalties “in kind,”
in the form of oil, as opposed to “in value,” or cash payments, and
competitively sell the commodities in the marketplace.
Following earlier feasibility
studies and pilot projects, MMS has determined that RIK will be an
integral part of its approach to manage mineral royalties, to be used
in tandem with royalties in value. Among the objectives of the effort
are to return fair value on the public’s royalty assets, reduce
regulatory costs and reporting requirements, shorten the compliance
cycle, and improve overall business efficiencies. In addition, taking
royalties in kind in the form of product simplifies audits and can
potentially reduce the number of audits performed on royalty in value
cash payments.
The Minerals Management Service is
the federal bureau 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 bureau also
collects, accounts for, and disburses mineral revenues from Federal
and American Indian lands. MMS disbursed more than $8 billion in 2003
and more than $135 billion since it 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
Media Contacts
Patrick Etchart
(303) 231-3162
Nicolette Nye
(202) 208-3985
MMS: Securing Ocean Energy & Economic Value for
America
U.S. Department of the Interior |