News & Alerts
April 21, 2020 WASHINGTON, D.C. – BLM OFFICE RELEASES GUIDANCE FOR ROYALTY REDUCTION REQUESTSpdf
On Tuesday, April 21, 2020, the BLM National Office in Washington, D.C. released guidance for oil and gas operators seeking royalty rate reductions as a result of the COVID-19 national emergency declared on March 16, 2020. In recognition of the massive drop in demand for crude oil and the subsequent stark decline in oil prices, the BLM, under its authority, may grant reductions in royalties on federal leases so as to prevent the premature plugging and abandonment of producing wells. There is no blanket reduction in royalties, rather the BLM has released guidance and procedures for any operator seeking temporary royalty relief on a case-by-case basis. If granted, the reduction in rate will expire after one year. Until a standard template application can be developed, the BLM has provided the attached guidance for operators to apply for temporary royalty relief.