HOUSTON, June 19 -- Mariner Energy Inc. Tuesday said the US Minerals Management Service has granted it royalty relief for the King Kong deepwater Gulf of Mexico development project.
King Kong is on Green Canyon blocks 472 and 473, about 150 miles southeast of New Orleans, in 3,900 ft of water.
MMS agreed to suspend royalty payments on the first 87.5 million bbl of oil equivalent from the field. First production from King Kong is anticipated in December.
Mariner operates King Kong and has a 50% interest. Agip Petroleum Co. Inc., the US upstream division of Eni SpA, owns the rest.
Mariner bought Shell Exploration & Production Co.'s share of the development last year for an undisclosed amount of cash and overriding royalty interest (OGJ Online, Aug. 1, 2000).
At the time Mariner planned to tie back two wells in the field 16 miles to the Allegheny mini tension-leg platform operated by Agip. Mariner also said it might develop Yosemite prospect on Green Canyon Block 516 jointly with King Kong.
Mariner, of Houston, mostly operates in the gulf and along the Gulf Coast. It is majority owned by an affiliate of Enron North America Corp., which, along with a group of Mariner employees, provided equity financing for a management-led buyout in 1996. Mariner has operated nine field developments in the deepwater Gulf since 1995.