HB 198: "An Act providing for a reduction of royalty on certain oil produced from Cook Inlet submerged land."
00 HOUSE BILL NO. 198 01 "An Act providing for a reduction of royalty on certain oil produced from Cook Inlet 02 submerged land." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 38.05.180(f)(5) is amended to read: 05 (5) notwithstanding and in lieu of a requirement in the leasing method 06 chosen of a minimum fixed royalty share, or the royalty provision of a lease, for leases 07 unitized as described in (p) of this section, leases subject to an agreement described in 08 (s) or (t) of this section, or interests unitized under AS 31.05, 09 (A) the lessee of all or part of an oil or gas field identified in 10 this section that has been granted approval of a written plan submitted to the 11 Alaska Oil and Gas Conservation Commission under AS 31.05.030(i) shall, 12 subject to (dd) of this section, pay a royalty of five percent on the first 13 25,000,000 barrels of oil and the first 35,000,000,000 cubic feet of gas 14 produced for sale from that field that occurs in the 10 years following the date
01 on which the production for sale commences; the fields eligible for royalty 02 reduction under this paragraph, all of which are located within the Cook Inlet 03 sedimentary basin, were discovered before January 1, 1988, and have been 04 undeveloped or shut in from at least January 1, 1988, through December 31, 05 1997, are 06 (i) [(A)] Falls Creek; 07 (ii) [(B)] Nicolai Creek; 08 (iii) [(C)] North Fork; 09 (iv) [(D)] Point Starichkof; 10 (v) [(E)] Redoubt Shoal; and 11 (vi) [(F)] West Foreland; 12 (B) the lessee of all or part of an oil field located offshore 13 beneath the submerged lands of Cook Inlet shall pay a royalty of five 14 percent on oil produced from the field or platform if oil production that 15 equaled or exceeded a volume of 1,200 barrels a day declines to less than 16 that amount, as certified by the Alaska Oil and Gas Conservation 17 Commission, for as long as the volume of oil produced from the field or 18 platform remains less than 1,200 barrels a day; and 19 (C) the lessee of all or part of an oil field located offshore 20 beneath the submerged lands of Cook Inlet shall pay a royalty calculated 21 under this subparagraph if the volume of oil produced from a field or 22 platform that was certified by the Alaska Oil and Gas Conservation 23 Commission under (B) of this paragraph later increases to 1,200 or more 24 barrels a day and remains at 1,200 or more barrels a day for more than 90 25 days; until the royalty rate determined under this subparagraph applies, 26 the royalty continues to be calculated under (B) of this paragraph; on and 27 after the day the increased production exceeds 90 days, the royalty 28 payable under this subparagraph is 29 (i) for production of more than 1,200 barrels a day 30 but not more than 1,300 barrels a day - seven percent; 31 (ii) for production of more than 1,300 barrels a day
01 but not more than 1,400 barrels a day - eight percent; 02 (iii) for production of more than 1,400 barrels a day 03 but not more than 1,500 barrels a day - nine percent; and 04 (iv) for production of more than 1,500 barrels a day 05 - 10 percent.