Republican Louisiana senators John Kennedy and Bill Cassidy are seeking royalty relief for independent offshore oil and gas companies impacted by the coronavirus pandemic and the oil battle between Saudi Arabia and Russia.
In a letter drafted last week, the two warn President Donald Trump that unless the federal government provides “meaningful relief to the independent offshore oil and gas companies in the next 30 days, the continued viability of the industry will be in serious jeopardy.”
Specifically, the companies want a suspension of payment of all royalties on oil and gas produced in the federal waters of the Gulf of Mexico for one year after the World Health Organization removes the pandemic declaration. They are also requesting suspensions of operation and production for federal offshore leases for the same time period and an automatic three-year extension for the primary lease terms of offshore oil and gas leases.
Independent oil and gas companies paid the federal government over $1.5 billion in royalties in 2018.
Kennedy and Cassidy also spoke recently with Interior Secretary Bernhardt to request that he temporarily suspend royalty payments from oil and gas producers to the federal government.
Read the letter here.
