The joint sale included RIK oil from producing leases located within the Federal 8(g) zone offshore Louisiana as well as RIK oil produced from Federal leases. The Federal 8(g) zone offshore Louisiana is the three-mile wide zone that lies adjacent to the state's seaward boundary.
The offering attracted offers from five parties. ChevronTexaco, Shell Trading, ExxonMobil and ConocoPhillips were awarded contracts for the Federal 8(g) crude oil and the Federal non-8(g) volume. Physical deliveries are scheduled to begin Oct. 1, 2004, and continue for six months.
The August sale is the third RIK oil sale conducted jointly by the State of Louisiana and the MMS since March 2003, when the two parties signed a Memorandum of Understanding (MOU). That MOU solidified a Federal-State partnership that provides the State of Louisiana with a more active role in managing its oil resources while protecting State and taxpayer interests.
While the MMS has historically collected royalties "in value," in the form of cash, it has in recent years been collecting its royalties "in kind," in the form of product, to more efficiently manage the nation's royalty assets. Among the objectives of the effort are maximization of taxpayer assets, reduction of regulatory costs and reporting requirements, and improvement of overall business efficiencies.
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