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The Deep Water Royalty Relief Act: Three Years Later

Nancy L. Pell, L. Poe Leggette, Oil & Gas Development on the Outer Continental Shelf (1998)

The Outer Continental ShelfDeep Water Royalty Relief Act (“DWRRA”) was signed into law on November 28, 1995. The purpose of DWRRA was to provide royalty relief incentives to stimulate exploration and production in the Gulf of Mexico, specifically in the deep-water areas. At the time the statute was enacted, only two platforms were producing in water deeper than 400 meters.1 On January 16, 1998, the Minerals Management Service (“MMS”) of the Department of the Interior published final rules implementing DWRRA.2 In February 1998, MMS issued guidelines to supplement the rules.3 This paper will provide a general review of the statute, regulations, and guidelines, and then describe some of the issues that have arisen in connection with deep water royalty relief in the three years since DWRRA was passed.