Gulf leases use the 2020 sale terms, a capped royalty and a ten year term in deep water
What the document says“shall, for a lease in water depths of 800 meters or deeper issued as a result of a sale, set the primary term for 10 years.”
The section requires the Secretary to offer the same lease form, lease terms, economic conditions and stipulations 4 through 9 as in the Bureau of Ocean Energy Management final notice of sale for Lease Sale 254, lets the Secretary update stipulations 1 through 3 and 10 to reflect current conditions, requires the royalty rate to be set at not less than 12 and a half percent and not more than 16 and two thirds percent, and requires a ten year primary term for a lease in water 800 meters deep or deeper.
What the document actually says“shall, for a lease in water depths of 800 meters or deeper issued as a result of a sale, set the primary term for 10 years.”
A lease in deep water gets a ten year first term. Deep water here means 800 meters or more.
Other leases use the terms from a 2020 sale notice. The royalty rate must sit within a set band. That band runs from 12.5 percent to 16 and two thirds percent.
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