We may reduce or suspend royalties for Outer Continental Shelf (OCS) leases or projects that meet the criteria in the following table. ----------------------------------------------------------------------------------------------------------------
Then we may grant you . . .
(a) With earnings that cannot sustain Would abandon otherwise potentially A reduced royalty rate on
production (i.e., End-of-life lease), recoverable resources but seek to current monthly production
increase production by operating beyond and a higher royalty rate
the point at which the lease is on additional monthly
economic under the existing royalty production (see Sec. Sec.
rate, 203.50 through 203.56).
(b) Located in a designated GOM deep Propose an expansion project and can A royalty suspension for a
water area (i.e., 200 meters or greater) demonstrate your project is uneconomic minimum production volume
and acquired in a lease sale held before without royalty relief, plus any additional
November 28, 1995, or after November 28, production large enough to
2000, make the project economic
(see Sec. Sec. 203.60
through 203.79).(c) Located in a designated GOM deep Are on a field from which no current pre- A royalty suspension for a
water area and acquired in a lease sale Act lease produced (other than test minimum production volume
held before November 28, 1995 (Pre-Act production) before November 28, 1995, plus any additional volume
lease), (Authorized field,) needed to make the field
economic (see Sec. Sec.
203.60 through 203.79).(d) Located in a designated GOM deep Propose a development project and can A royalty suspension for a
water area and acquired in a lease sale demonstrate that the suspension volume, minimum production volume
held after November 28, 2000, if any, for your lease is not enough to plus any additional volume
make development economic, needed to make your
project economic (see Sec.
Sec. 203.60 through
203.79).(e) Where royalty relief would recover Are not eligible to apply for end-of- A royalty modification in
significant additional resources or, life or deep water royalty relief, but size, duration, or form
offshore Alaska or in certain areas of show us you meet certain eligibility that makes your lease or
the GOM, would enable development, conditions, project economic (see Sec.
203.80).(f) Located in a designated GOM shallow Drill a deep well on a lease that is not A royalty suspension for a
water area and acquired in a lease sale eligible for deep water royalty relief volume of gas produced
held before January 1, 2001, or after and you have not previously produced from successful deep and
January 1, 2004, or have exercised an oil or gas from a deep well or an ultra- ultra-deep wells, or, for
option to substitute for royalty relief deep well, certain unsuccessful deep
in your lease terms, and ultra-deep wells, a
smaller royalty suspension
for a volume of gas or oil
produced by all wells on
your lease (see Sec. Sec.
203.40 through 203.49).(g) Located in a designated GOM shallow Drill and produce gas from an ultra-deep A royalty suspension for a
water area, well on a lease that is not eligible volume of gas produced
for deep water royalty relief and you from successful ultra-deep
have not previously produced oil or gas and deep wells on your
from an ultra-deep well, lease (see Sec. Sec.
.203.30 through 203.36).(h) Located in planning areas offshore Propose an expansion project or propose A royalty suspension for a
Alaska, a development project and can minimum production volume
demonstrate that the project is plus any additional volume
uneconomic without relief or that the needed to make your
suspension volume, if any, for your project economic (see Sec.
lease is not enough to make development Sec. 203.60, 203.62,
economic, 203.67 through 203.70,
203.73, and 203.76 through
203.79).----------------------------------------------------------------------------------------------------------------