MMS Gives Incentive for Offshore Subsalt Exploration
Vast resources of oil and natural gas may underlie sheets of salt on the outer continental shelf, and the Minerals Management Service is providing an extension of time to companies who are exploring to locate these resources.
A final rule on the extension was published in the Federal Register. The extension provides flexibility to industry while ensuring that companies make continued progress toward development of the lease.
"Through this incentive, MMS supports the president's National Energy Policy by providing additional flexibility to industry that will, ultimately, allow the development of oil and gas resources, thereby contributing to national domestic energy security," said MMS Director Johnnie Burton.
Gas exploration under salt sheets can be expensive and time consuming because the salt sheets interfere with analysis of the geophysical data. The extension provides additional time to leaseholders so that they can complete analysis of the complex geophysical data in areas under salt sheets before having to choose a location to drill a well.
MMS estimates that six to 16 trillion cubic feet of gas may lie beneath the salt sheets and could yield 200 to 500 billion cubic feet of gas production between 2008 and 2010.