02/10 11:12 US oil producers formally ask federal gov't relief
WASHINGTON, Feb 10 (Reuters) - U.S. independent oil producers on Tuesday
said they expect to present a formal proposal this week to the U.S.
Government requesting relief from suffering caused by continued low
crude oil prices.
The proposal was included in a list of recommendations drawn up by
Independent Petroleum Association of America (IPAA) one of which asks
for a reduction of royalties on wells producing less than 50 barrels per
day.
Independent oil producers had been pushing for government relief mostly
for so-called "marginal" wells that have output of less than 15 barrels
a day, but account for about one-third of U.S. oil supplies.
"Royalties need to be reduced for these wells, otherwise they will be
shut-in or abandoned, further reducing the benefits of domestic
production," the trade group said.
The IPAA plans to forward their recommendations to the U.S. Interior
Department, which oversees oil production on federal lands.
The Interior Department responded last week by allowing operators of
such low-volume wells on federal lands to shut down for up two years
while crude prices are low without losing their leases.
The IPAA said that relief doesn't go far enough and it wants the
Interior Department to undertake other cost-cutting measures for oil
producers. "Shut-in wells don't keep people in business," the group
said.
Other relief the IPAA wants the department to take include:
*Temporarily suspending mandatory on-site maintenance tasks that don't
pose a threat to public health, safety and the environment, but are
costly for producers to carry out.
*Faster processing of permits and applications to operate on public
lands.
*Eliminate rights of way and rental charges for pipelines, roads and
other surface facilities.
*Reinvest royalty dollars back into uneconomical wells to keep them
open.
The trade group said if the Interior Department doesn't have the
authority to implement all the cost-savings measures, then Congress
should enact legislation to permit the relief. |
