[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: 30CFR203.69]

[Page 23-24]
 
                       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. 203.69  If my application is approved, what royalty relief will I receive?

    If we approve your application, subject to certain conditions, we 
will not collect royalties on a specified suspension volume for your 
field, development project, or expansion project. Suspension volumes 
include volumes allocated to a lease under an approved unit agreement, 
but exclude any volumes of production that are not normally royalty-
bearing under the lease or the regulations of this chapter (e.g., fuel 
gas).
    (a) For authorized fields, the minimum royalty-suspension volumes 
are:
    (1) 17.5 million barrels of oil equivalent (MMBOE) for fields in 200 
to 400 meters of water;
    (2) 52.5 MMBOE for fields in 400 to 800 meters of water; and
    (3) 87.5 MMBOE for fields in more than 800 meters of water.
    (b) For development projects, any relief we grant applies only to 
project wells and replaces the royalty suspension volume with which we 
issued your lease. If your project is economic given the royalty 
suspension volume with which we issued your lease, we will reject the 
application. Otherwise, the minimum royalty suspension volumes are as 
shown in the following table:

[[Page 24]]



------------------------------------------------------------------------
                                  The minimum royalty
              For                suspension volume is         Plus
------------------------------------------------------------------------
(1) RS leases.................  A volume equal to the   10 percent of
                                 combined royalty        the median of
                                 suspension volumes      the
                                 (or the volume          distribution of
                                 equivalent based on     known
                                 the data in your        recoverable
                                 approved application    resources upon
                                 for other forms of      which we based
                                 royalty suspension)     approval of
                                 with which we issued    your
                                 the leases              application
                                 participating in the    from all
                                 application that have   reservoirs
                                 or plan a well into a   included in the
                                 reservoir identified    project.
                                 in the application.
(2) Other deep water leases     A volume equal to 10
 issued in sales after           percent of the median
 November 28, 2000.              of the distribution
                                 of known recoverable
                                 resources upon which
                                 we based approval of
                                 your application from
                                 all reservoirs
                                 included in the
                                 project.
------------------------------------------------------------------------

    (c) If your application includes pre-Act or eligible leases in 
different categories of water depth, we apply the minimum royalty 
suspension volume for the deepest such lease then assigned to the field. 
We base the water depth and makeup of a field on the water-depth 
delineations in the ``Lease Terms and Economic Conditions'' map and the 
``Field Names Master List'' documents and updates in effect at the time 
your application is deemed complete. These publications are available 
from the MMS Regional Office for the GOM.
    (d) You will get a royalty suspension volume above the minimum if we 
determine that you need more to make the field or development project 
economic.
    (e) For expansion projects, the minimum royalty suspension volume 
equals 10 percent of the median of the distribution of known recoverable 
resources upon which we based approval of your application from all 
reservoirs included in your project plus any suspension volumes required 
under Sec. 203.66. If we determine that your expansion project may be 
economic only with more relief, we will determine and grant you the 
royalty suspension volume necessary to make the project economic.
    (f) The royalty suspension volume applicable to specific leases will 
continue through the end of the month in which cumulative production 
reaches that volume. You must calculate cumulative production from all 
the leases in the authorized field or project that are entitled to share 
the royalty suspension volume.

[63 FR 2618, Jan. 16, 1998, as amended at 67 FR 1876, Jan. 15, 2002]