La. Admin. Code tit. 43 § V-545

Current through Register Vol. 50, No. 11, November 20, 2024

Section V-545 - Utilization; Right of First Refusal; Assignment; Resale [Formerly LAC 43:I.945]

A. Refiner shall not resell any royalty crude oil without the prior written consent of the mineral board.

B. All royalty crude oil sold or processed under any contract, or other crude oil received in lieu of royalty crude oil under an exchange agreement, shall be utilized at refiner's facilities in the state and shall not be used for resale in kind except as authorized by the provisions of this Section. To the extent permitted by controlling federal law or regulations no gasoline or diesel end product refined from state royalty crude under any contract shall be sold for the ultimate purpose of retail sale outside of the state of Louisiana.

C. The resale or exchange of royalty crude oil in violation of the provisions of this Section shall be punishable by a fine of not less than $10,000 per day for each day of violation.

D. Any contract for the sale or processing of state royalty oil shall be conditioned upon the right of the state to exercise a right of first refusal to any product refined from the royalty crude.

E. Any contract for the sale or processing of state royalty oil shall also require that first priority be given to Louisiana customers in the usual course of sale of end products.

F. Refiner shall be required to furnish the board copies of all contracts entered into between refiner and third parties reflecting delivery, receipt, handling, transporting, sale and use of crude oil covered by a contract with the board, or refined products derived therefrom.

G. No contract shall be assignable without the prior written consent of the board.

H. Refiner shall not enter into any exchange agreement whereby other crude oil in lieu of the state's royalty crude oil is delivered to refiner without the prior written consent of the mineral board.

La. Admin. Code tit. 43, § V-545

Promulgated by the Department of Natural Resources, Office of the Secretary, LR 6:135 (March 1980), amended by the Department of Natural Resources, Office of Mineral Resources, LR 34:259 (February 2008), repromulgated LR 411732 (9/1/2015).

AUTHORITY NOTE: Promulgated in accordance with R.S. 30:143.