[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: 30CFR203.80]

[Page 29]
 
                       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. 203.80  When can I get royalty relief if I am not eligible for end-of-life or deep water royalty relief?

    We may grant royalty relief when it serves the statutory purposes 
summarized in Sec. 203.1, and our formal relief programs provide 
inadequate encouragement to increase production or development. Unless 
your lease lies wholly west of 87 degrees, 30 minutes West longitude in 
the Gulf of Mexico, your lease must be producing to qualify for relief. 
Before you may apply for royalty relief apart from our end-of-life or 
deepwater programs, we must agree that your lease or project has two or 
more of the following characteristics:
    (a) The lease has produced for a substantial period and the lessee 
can recover significant additional resources. Significant additional 
resources means enough to allow production for at least a year more than 
would be profitable without royalty relief.
    (b) Valuable facilities (e.g., a platform or pipeline that would be 
removed upon lease relinquishment) exist that we do not expect a 
successor lessee to use. If the facilities are located off the lease, 
their preservation must depend on continued production from the lease 
applying for royalty relief. We will only consider an allocable share of 
costs for off-lease facilities in the relief application.
    (c) A substantial risk exists that no new lessee will recover the 
resources.
    (d) The lessee made major efforts to reduce operating costs too 
recently to use the formal program for royalty relief (e.g., recent 
significant change in operations).
    (e) Circumstances beyond the lessee's control, other than water 
depth, preclude reliance on one of the existing royalty relief programs.

[67 FR 1879, Jan. 15, 2002]

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