The Bureau of Ocean Energy Management (BOEM) with support from the Bureau of Safety and Environmental Enforcement (BSEE) published joint research in November 2020 that indicates certain economic policy changes may help increase oil and natural gas production in the Gulf of Mexico (GOM), using deepwater infrastructure already in place.
The study titled, “Recommended Special Case Royalty Relief Discount Rates for Deepwater Oil and Gas Projects Using Subsea Tiebacks Requiring Enhanced Flow Assurance Technologies” evaluated and recommended updating economic parameters used by BSEE in the evaluation of certain special case royalty relief applications. This research examined future wells using subsea tiebacks, including extended-reach tiebacks, that require high-cost enhanced flow assurance technologies, such as subsea booster pumps. The following links provide detailed information, statistics and background on the Gulf of Mexico Deepwater Province and recommendations to avoid the potential of stranding oil and natural gas resources.
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Deepwater Report
12/11/2020The deepwater portion of Gulf of Mexico has shown a continued increase in oil and gas exploration and development. The majority of exploration activity is currently taking place in water depths greater than 500 feet. BSEE engineers within each of the Region’s District Offices review and approve well operations permits.
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Royalty Relief
12/11/2020The Deepwater Royalty Relief Act of 1995 (DWRRA) was designed to promote increased exploration, development, and production on leases found in deep water areas of the Gulf of Mexico, providing economic incentives to operators. Leases sold between 1996 and 2000 in water depths 200 meters or deeper received “automatic” royalty relief in the form of large royalty suspension volumes. Pursuant to the Fifth Circuit Court Decision in Kerr-McGee v. DOI, price thresholds did not apply to these leases.
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Special Case Royalty Relief Overview
12/11/2020In November 2019, the Bureau of Ocean Energy Management (BOEM) published a comprehensive report on the appropriate discount rates to use in Special Case Royalty Relief (SCRR) applications for Gulf of Mexico (GOM) shallow water oil and gas projects
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Press Release
12/11/2020WASHINGTON –The Bureau of Ocean Energy Management (BOEM) with support from the Bureau of Safety and Environmental Enforcement (BSEE) published new research on Dec. 3, that indicates certain economic policy changes may help increase oil and natural gas production in the Gulf of Mexico (GOM), using deepwater infrastructure already in place. Read More