Crew

The federal government could raise an additional $1.2 billion over the next decade through higher fees and royalties on crude oil and natural gas drillers and revamped oil and gas lease auctions, according to areport from the Congressional Budget Office (CBO). While CBO offered no recommendations, it analyzed several options to increase federal income from oil and gas on federal lands. Those options included increasing production by opening new federal lands; repealing tax preferences for companies producing oil or gas on federal lands; imposing fees on non-producing parcels; increasing the royalty rate for onshore production to 18.75% from the current 12.5%; increasing the royalty rate for offshore leases when oil or gas prices reach certain thresholds, and a series of revisions to the Bureau of Land Management’s lease auction process. Gross income from onshore oil and gas resources averaged $3 billion annually from 2005 to 2014, and $8 billion came from offshore resources during the same period, CBO said. Last year, the Department of Interior launched a plan to adjust royalty rates on federal lands (see Daily GPI,April 17, 2015).

There are three major plays that have the full attention of Occidental Petroleum Corp.’s (Oxy) strategy to significantly grow its U.S. drilling operations — California, the Permian Basin and the Bakken — and they each have their different timetables and challenges, said Oxy CEO Stephen Chazen.

Interior’s Bureau of Land Management (BLM) office in Alaska has issued a call for nominations and comments on tracts for oil and leases to be offered in the National Petroleum Reserve in Alaska (NPR-A) in November. The notice, which was published in the Federal Register, is subject to a 45-day comment period. This is the second consecutive annual sale that President Obama has directed BLM to hold in the NPR-A. The first NPR-A sale in 2011 generated bids totaling more than $3.6 million (see NGI, Dec. 12, 2011). BLM Alaska said it plans to offer 630 tracts on 7.1 million acres in the upcoming lease lease, which would be more than double what was offered in 2011. The tracts to be auctioned would be within the Northeast and Northwest Planning Areas of the NPR-A, according to the notice. The U.S. Geological Survey in 2010 estimated that the NPR-A, which covers 22.8 million acres on Alaska’s North Slope, holds approximately 896 million bbl of oil and 53 Tcf of natural gas. Both figures were below what the agency estimated in 2002. BLM Alaska said it must receive all nominations and comments on the tracts for consideration by June 29. The nominations and/or comments should be sent to the State Director, Bureau of Land Management, Alaska State Office, 222 West 7th Ave., Mailstop 13, Anchorage, AK 99513-7504. For further information, contact Deputy State Director Ted Murphy at (907) 271-4413.

On the heels of selling off much of its Barnett Shale assets to focus on the liquids-rich Eagle Ford Shale and Niobrara Formation, Carrizo Oil & Gas Inc. is reporting record production rates from the second quarter of the year.

Northern Natural Gas said Friday afternoon it had contracted a repair crew and dive boat that were en route to a leak site (see Daily GPI, March 2) on the Northern-operated Matagorda Offshore Pipeline System offshore Texas. Pending any weather delays, Northern expected the dive boat to arrive at the site late Saturday evening and repairs to begin Sunday. It anticipates restoration of service to some of the affected platforms downstream of Matagorda 758 by the start of Tuesday’s gas day.

A skeleton crew of six Minerals Management Services (MMS) employees from the New Orleans regional office is operating out of the Interior Department’s Minerals Royalty Management office in Houston, and is responsible for compiling the estimates on shut-in oil and natural gas production and damages to production platforms, pipelines and other structures in the hurricane-ravaged Gulf of Mexico.

North Carolina Natural Gas (NCNG) employees last week were working to repair a ruptured gas transmission pipeline that serves the New Bern, NC area. The line, located near the intersection of Racetrack Road and State Road 1005, was struck by a construction contractor’s equipment at 3:35 p.m. last Monday. No injuries were reported. Emergency personnel secured the scene of the break and evacuated 500 people in the area. Power also was cut off in the area.

North Carolina Natural Gas (NCNG) employees are working to repair a ruptured gas transmission pipeline that serves the New Bern, NC area. The line, located near the intersection of Racetrack Road and State Road 1005, was struck by a construction contractor’s equipment at 3:35 p.m. Monday. No injuries were reported. Emergency personnel secured the scene of the break and evacuated 500 people in the area. Power also was cut off in the area.

Due to a construction crew inadvertently rupturing the ColumbiaGas line in Hunterdon County, NJ, about noon Tuesday, deliveries toAlgonquin were interrupted at Hanover. Algonquin prorated Hanoverreceipts for Tuesday’s gas day and said no additional nominationswill be scheduled there or at its Ramapo interconnect with Columbiauntil further notice. About 100 MMcf/d was flowing at Hanover,Columbia said; however, it expects little or no impact on today’sgas day, estimating that line repairs will be completed thismorning.