[Code of Federal Regulations] [Title 30, Volume 2] [Revised as of July 1, 2002] From the U.S. Government Printing Office via GPO Access [CITE: 30CFR203.4] [Page 17-19] TITLE 30--MINERAL RESOURCES DEPARTMENT OF THE INTERIOR PART 203--RELIEF OR REDUCTION IN ROYALTY RATES--Table of Contents Subpart A--General Provisions Sec. 203.4 How do the provisions in this part apply to different types of leases and projects? The tables in this section summarize how similar provisions of this part apply in different situations. (a) We require the information elements indicated by an X in the following table and described in Secs. 203.51, 203.62, and 203.81 through 203.89 for applications for royalty relief. ---------------------------------------------------------------------------------------------------------------- Deep water End-of- ------------------------------------------ Information elements life Expansion Pre-act Development lease project lease project ---------------------------------------------------------------------------------------------------------------- (1) Administrative information report..................... X X X X (2) Net revenue and relief justification report X (prescribed format)...................................... [[Page 18]] (3) Economic viability and relief justification report X X X (Royalty Suspension Viability Program (RSVP) model inputs justified with Geological and Geophysical (G&G), Engineering, Production, & Cost reports)................. (4) G&G report............................................ X X X (5) Engineering report.................................... X X X (6) Production report..................................... X X X (7) Deep water cost report................................ X X X ---------------------------------------------------------------------------------------------------------------- (b) We require the confirmation elements indicated by an X in the following table and described in Secs. 203.70, 203.81 and 203.90 through 203.91 to retain royalty relief. ---------------------------------------------------------------------------------------------------------------- Deep water End-of- ------------------------------------------ Confirmation elements life Expansion Pre-act Development lease project lease project ---------------------------------------------------------------------------------------------------------------- (1) Fabricator's confirmation report...................... X X X (2) Post-production development report approved by an X X X independent certified public accountant (CPA)............ ---------------------------------------------------------------------------------------------------------------- (c) The following table indicates by an X, and Secs. 203.50, 203.52, 203.60 and 203.67 describe, the prerequisites for our approval of your royalty relief application. ---------------------------------------------------------------------------------------------------------------- Deep water End-of- ------------------------------------------ Approval conditions life Pre-act Development lease Expansion lease project ---------------------------------------------------------------------------------------------------------------- (1) At least 12 of the last 15 months have the required X level of production...................................... (2) Already producing..................................... X (3)A producible well into a reservoir that has not X X X produced before.......................................... (4) Royalties for qualifying months exceed 75% of net X revenue (NR)............................................. (5) Substantial investment on a pre-Act lease (e.g., X platform, subsea template)............................... (6) Determined to be economic only with relief............ X X X ---------------------------------------------------------------------------------------------------------------- (d) The following table indicates by an X, and Secs. 203.52 and 203.74 through 203.75 describe, the prerequisites for a redetermination of our royalty relief decision. ---------------------------------------------------------------------------------------------------------------- Deep water End-of- ------------------------------------------ Redetermination conditions Life Expansion Pre-act Development lease project lease project ---------------------------------------------------------------------------------------------------------------- (1) After 12 months under current rate, criteria same as X for approval............................................. (2) For material change in geologic data, prices, costs, X X X or available technology.................................. ---------------------------------------------------------------------------------------------------------------- (e) The following table indicates by an X, and Secs. 203.53 and 203.69 describe, the characteristics of approved royalty relief. ---------------------------------------------------------------------------------------------------------------- Deep water End-of- ------------------------------------------ Relief rate and volume, subject to certain conditions life Expansion Pre-act Development lease project lease project ---------------------------------------------------------------------------------------------------------------- (1) One-half pre-application effective lease rate on the X qualifying amount, 1.5 times pre-application effective lease rate on additional production up to twice the qualifying amount, and the pre-application effective lease rate for any larger volumes........................ (2) Qualifying amount is the average monthly production X for 12 qualifying months................................. (3) Zero royalty rate on the suspension volume and the X X X original lease rate on additional production............. (4) Suspension volume is at least 17.5, 52.5 or 87.5 X million barrels of oil equivalent (MMBOE)................ (5) Suspension volume is at least the minimum set in the X X Notice of Sale, the lease, or the regulations............ [[Page 19]] (6) Amount needed to become economic...................... X X X ---------------------------------------------------------------------------------------------------------------- (f) The following table indicates by an X, and Secs. 203.54 and 203.78 describe, circumstances under which we discontinue your royalty relief. ---------------------------------------------------------------------------------------------------------------- Deep water End-of- ------------------------------------------ Full royalty resumes when life Expansion Pre-act Development lease project lease project ---------------------------------------------------------------------------------------------------------------- (1) Average NYMEX price for last 12 months is at least 25 X percent above the average for the qualifying months...... (2) Average NYMEX price for last calendar year exceeds $28/ X X bbl or $3.50/mcf, escalated by the gross domestic product (GDP) deflator since 1994................................ (3) Average prices for designated periods exceed levels we X X specify in the Notice of Sale or the lease............... ---------------------------------------------------------------------------------------------------------------- (g) The following table indicates by an X, and Secs. 203.55 and 203.76 through 203.77 describe, circumstances under which we end or reduce royalty relief. ---------------------------------------------------------------------------------------------------------------- Deep water End-of- ------------------------------------------ Relief withdrawn or reduced life Expansion Pre-act Development lease project lease project ---------------------------------------------------------------------------------------------------------------- (1) If recipient requests................................. X X X X (2) Lease royalty rate is at the effective rate for 12 X consecutive months....................................... (3) Conditions occur that we specified in the approval X letter in individual cases............................... (4) Recipient does not submit post-production report that X X X compares expected to actual costs........................ (5) Recipient changes development system.................. X X X (6) Recipient excessively delays starting fabrication..... X X X (7) Recipient spends less than 80 percent of proposed pre- X X X production costs prior to start of production............ (8) Amount of relief volume is produced................... X X X ---------------------------------------------------------------------------------------------------------------- [67 FR 1873, Jan. 15, 2002]