« Is This a Stickup? | Main | Pelosi's aircraft fiasco is Hastert's folly »

Feb 12, 2007

Comments

PODO

Great info, thanks a lot!!! I wish I will have such a writing skills.

chanq

The MMS (DOI) auctions 3mix3mi blocks in the Gulf of Mexico twice yearly. Sections of the Gulf are put up for bid. The operators (oil companies) bid on the leases based on seismology and their best estimates for recovering oil and/or gas from that lease. The MMS geologists and geophysicists evaluate the block to make sure that the bid is reasonable before the lease is granted to the operator.
The operator has 5 years to drill a well for shallow water leases (<1000' wd) and 10 years for deep water. If a well has not been drilled in that time, the lease returns to the government and no money is refunded. If the operator does not produce the lease within 6 months of drilling or by the time the lease is up, it returns to the government. The lease is then resold, including all of the information gained from previous drilling operations.
There is a ton of oversight already. Of course, there is room for improvement. The MMS recovers more money than any agency other than the IRS.

JIM MACKEY

I agree with the Oversight committees looking into this issue. Why are we trying to give away more parcels when the ones that we awarded, the majority of them have not been developed yet and no plans presented. It seems like someone is trying to set the Oil and gas industry up for years to come with government land that they can use at their discretion to force price changes and to maintain their subsidy welfare when domestic and economic problems are being neglected and cut. I am certainly not against the oil and gas roylaties system but it definitely needs overhauling at the highest levels and more audit/accounting done. I also think that the current Interior officials should be forced to streamline, cleanup, and require an annual report as to the plans for use of this land and make it a 5 year plan and if nothing is done within that timeframe cancel the lease and rebid it to a company that is willing to utilize it
for needed oil and gas reserves and/or refine it for consumption by the American people.

The comments to this entry are closed.