Kerr-McGee opens discussions with DOI over royalty disagreement

Kerr-McGee says it has agreed to open discussions with the US Department of the Interior over disagreement on royalty relief under the Deep Water Royalty Relief Act of 1995.
June 30, 2006
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Offshore Staff

(US, GoM) - Kerr-McGee has agreed to open discussions with the US Department of the Interior over disagreement on royalty relief under the Deep Water Royalty Relief Act of 1995.

According to the operator, in March 2006, it brought suit in federal court in Louisiana challenging an order from the department to pay royalties on natural gas and oil produced from leases issued between 1996 and 2000 under the relief provisions of the act.

The suit concerns whether the department is authorized to limit royalty relief for those leases if the price of natural gas or oil exceeds certain "threshold" levels.

"Kerr-McGee has previously sought to resolve this issue, and we welcome the department's recent invitation for lessees to discuss renegotiation of their deepwater leases," says Luke Corbett, Kerr-McGee chairman and CEO.

06/30/06

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