The U.S. federal agencies regulating offshore leases are considering granting royalty relief to new oil and gas drilling in shallow waters in the Gulf of Mexico, in a bid to avoid the stranding of what they estimate could be US$20 billion worth of American oil and gas resources. In new research this week, the Bureau of Safety and Environmental Enforcement (BSEE) and the Bureau of Ocean Energy Management (BOEM) recommend a discount royalty rate for what they propose should be the Gulf of Mexico Shallow Water Province of water depths fewer than 200 meters. As development in the Gulf of Mexico has moved onshore or into deepwater in the past two decades, the number of wells drilled has slumped by 89 percent over the last decade, the agencies say. Some 100 platforms are being removed every year and no new platforms are being installed. “If this trend continues, the […]