Wednesday May 29, 1:17 pm Eastern Time Bush/Destin Dome/Gas -3: Total Cost Of $235 Million
In a teleconference with reporters to announce the buyback, Florida Governor Jeb Bush said the agreement will help ensure no more oil and gas drilling off Florida 's coasts.
Asked if his brother, President Bush, has made a political calculation to prevent oil and gas development in controversial areas off Florida while pursuing new drilling in Alaska , the governor said, "I disagree with that, but I don't really care." Alaska 's residents and state officials should determine what's in their best interests, he said.
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The U.S. Interior Department has agreed in principal to pay a total of $235 million for petroleum and minerals rights in the Destin Dome region and parts of the Everglades.
Interior's Minerals Management Service will pay $115 million for companies to relinquish nine of 11 leases at and around the Destin Dome discovery, leases which were issued before the current moratoria on drilling this portion of the eastern Gulf.
Under the agreement, El Dorado, Ark. -based Murphy will retain a 100% interest in Destin Dome blocks 56 and 57, but the company won't be able to submit a development plan for the blocks until 2012 and won't have any guarantee that state or federal officials won't veto the plan.
Murphy will receive about $23 million from the $115 million lease buyback and believes the two blocks it has retained could contain "significant" gas reserves, company spokeswoman Mindy West said.
In a prepared statement, ChevronTexaco said it was very disappointed it won't be able to develop the Destin Dome discovery, which it believes could have been done in an environmentally sound way. But the San Francisco -based company said it was satisfied its $46 million share of the reimbursement will cover its investment in the project to date.
The lease buyback will settle a court case ChevronTexaco, Conoco and Murphy brought against the government in July 2000 for indefinitely delaying their plan to produce an estimated 2.6 trillion cubic feet of gas in Destin Dome. In 1998 the state of Florida filed an objection to the development in federal waters off its shores, requiring an override decision from the Commerce Department.
The Interior Department said ChevronTexaco, Conoco and Murphy have agreed to compensate ExxonMobil Corp. and Samedan Oil Corp. for two of the Destin Dome leases.
In the Everglades, the Interior Department is asking Congress for $120 million to buy back mineral rights held in the Big Cypress National Preserve, Florida Panther National Wildlife Refuge and Thousand Islands National Wildlife Refuge from Collier Resources Co .
The federal government will buy back rights for oil, gas and other minerals under 765,000 acres currently owned mainly by Collier, a family-held real estate, agribusiness and minerals firm. The area is estimated to hold the equivalent of 40 million barrels of oil.
Interior Secretary Gale Norton said the agreement will support the $8 billion Comprehensive Everglades Restoration Plan, a 35-year federal-state program launched two years ago to restore South Florida 's ecosystem while providing water for its growing population.
Norton said the areas where mineral rights are being repurchased are near federally managed conservation areas including the Everglades National Park and are home to endangered or threatened species including the Florida panther, American crocodile, red-cockaded woodpecker and manatees.
-By Campion Walsh, Dow Jones Newswires; 202-862-9291; Campion.Walsh@ dowjones.com