[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: 30CFR203.68]

[Page 23]
 
                       TITLE 30--MINERAL RESOURCES
 
                       DEPARTMENT OF THE INTERIOR
 
PART 203--RELIEF OR REDUCTION IN ROYALTY RATES--Table of Contents
 
               Subpart B--OCS Oil, Gas, and Sulfur General
 
Sec. 203.68  What pre-application costs will MMS consider in determining economic viability?

    (a) We will not consider ineligible costs as set forth in 
Sec. 203.89(h) in determining economic viability for purposes of royalty 
relief.
    (b) We will consider sunk costs according to the following table.

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                We will                          When determining
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(1) Include sunk costs.................  Whether a field that includes a
                                          pre-Act lease which has not
                                          produced, other than test
                                          production, before the
                                          application or redetermination
                                          submission date needs relief
                                          to become economic.
(2) Not include sunk costs.............  Whether an authorized field, a
                                          development project, or an
                                          expansion project can become
                                          economic with full relief (see
                                          Sec.  203.67).
(3) Not include sunk costs.............  How much suspension volume is
                                          necessary to make the field, a
                                          development project, or an
                                          expansion project economic
                                          (see Sec.  203.69(c)).
(4) Include sunk costs for the project   Whether a development project
 discovery well on each lease.            or an expansion project needs
                                          relief to become economic.
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[63 FR 2618, Jan. 16, 1998, as amended at 67 FR 1876, Jan. 15, 2002]