Division of Oil & Gas updating royalty payment regulations

Petroleum News Alaska Staff

The Department of Natural Resources Division of Oil and Gas is updating its royalty payment regulations.

The division has had regulations for electronic royalty payments since February of 1998 and began introducing the process to companies in May of 1998.

Merlin Wibbenmeyer, operations research analyst with the division, told PNA Aug. 13 that the system is almost 100 percent automated now and the current regulation revisions are essentially housekeeping. The division is revising the instruction manual to provide better explanations, he said, and because the instructions are tied to regulations, updating the instructions requires public notice.

Companies have been allowed to pay by Automated Clearing House, by federal wire transfer or by check. The regulation revisions require Automated Clearing House or federal wire transfer payment.

The regulations also add penalties for late payments. Late payment hasn’t been a big problem, Wibbenmeyer said, but the division wants to make sure it doesn’t become one. The new regulations provide for a 5 percent penalty.

The revised regulations also require electronic commerce agreements with the state specifying terms and conditions under which royalty reports are filed electronically.