US, WASHINGTON (ORDO NEWS) — The Trump administration has reduced payments for several oil and gas drilling companies on federal lands as the industry seeks help to survive a period of low energy prices, reports Reuters.
This step shows that drillers accepted the government’s proposal to reduce payments on a case-by-case basis after the sectoral appeal for a general concession covering all federal lease agreements was rejected.
The U.S. Land Management Bureau (BLM) has approved a cut in rates on at least 76 Utah rental properties in recent weeks. The reduction in many cases implied a reduction in the rates that companies must pay on the cost of their products, from typical 12.5% to 5%.
BLM also approved the suspension of more than 90 leases in Wyoming, Nevada and California due to an outbreak of coronavirus, the database showed. Suspensions allow companies to stop production for up to two months without losing a lease.
A BLM official said the bureau followed existing rules when evaluating aid applications.
“Any assistance provided is temporary for up to 60 days,” the official said.
One of the main beneficiaries of reduced payments is Kirkwood Oil & Gas, a Wyoming-based company. Steve Degenfelder, company manager, said she also sought help in Wyoming, Nevada, and North Dakota.
World oil prices have fallen due to the consequences of the coronavirus pandemic, which caused unprecedented restrictive measures and destroyed the demand for transport fuel.
Contact us: firstname.lastname@example.org