The US Bureau of Ocean energy management (BOEM), part of the Department of the Interior (DOI), on Thursday said it is cutting the royalty rate for Gulf of Mexico oil and gas leases at water depths of 200 metres or less in Lease Sale 249.
BOEM said the rate will drop from 18.75% in the proposed notice of sale to 12.5%. That makes it the same as the rate for federal onshore leases.
The change is necessary, BOEM maintains, to “reflect recent market conditions” with falling hydrocarbon prices and the marginal nature of Gulf of Mexico shelf resources.
Lease Sale 249, to be streamed live from New Orleans on August 16, will be the first offshore sale of the new Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2017-2022.
BOEM, tasked to manage OCS energy and mineral resources in a responsible way, said it is also considering the possibility of a price-based royalty system whereby royalties would be less if the price dropped.