US administration proposes legal amendments to boost oil, gas production

The US Department of the Interior proposed on July 7 a set of legal amendments aimed at boosting oil and gas production in the western region of the country and reducing extraction costs for companies.

The proposed changes would allow companies to combine oil and gas output from multiple leases into a single drilling site, potentially saving the industry up to $1.8 billion annually, according to a statement from the department.

The amendments primarily target onshore drilling operations in the American West, with the main objective of easing restrictions on the consolidation of lease agreements.

The department explained that the proposed changes would enable oil and gas operators to more accurately track production and calculate royalties paid to the federal government and local tribes for output derived from public and tribal lands.

Under current regulations, the Bureau of Land Management (BLM), which falls under the Department of the Interior, only permits lease consolidation when mineral ownership rights, royalty rates, and revenue-sharing structures are fully aligned.

The department added that these conditions pose challenges in certain parts of the western US, where mineral rights ownership is often highly complex.