060-7 Wyo. Code R. § 7-4 - Sale of Royalty Oil to Eligible Refiners

(a) Any eligible refiner who is interested in purchasing royalty oil may file with the Office a request to be notified of any royalty sales. After the Board has decided to sell its royalty oil, the Office shall notify all eligible refiners who have made this request of the proposed sale.

(b) An eligible refiner may file an application to purchase royalty oil within thirty (30) days after the Director has, upon the direction of the Board, determined that royalty oil should be sold to eligible refiners within the state. An application, which shall be filed at the Office, shall include the following information:

(i) The full name and address of the applicant; the location of the refinery to be supplied; and a complete disclosure of applicant's affiliation or association with any other refinery.

(ii) A certified statement that the applicant is an eligible refiner.

(iii) A certified statement, including volumetric substantiation, that the applicant will make diligent efforts to market the products of the royalty oil within the state.

(iv) The capacity of the refinery to be supplied, the amount of royalty oil requested by the applicant, the kinds of refined products the applicant presently produces, and where refined products are being or will be marketed.

(v) The amount of additional crude oil needed to meet either existing refining capacity or the amount needed to meet the additional capacity which is projected to come on stream during the period of the royalty oil sale contract.

(c) The Director shall examine each application filed by an eligible refiner pursuant to this chapter and, where he finds that the showing submitted is inadequate or unsatisfactory, may request additional showing as he deems necessary.

(d) The Director shall allow or disallow, subject to the approval of the Board, each application for royalty oil submitted by an eligible refiner and shall report his decision to the Board for its approval at its next regular meeting or special meeting held for consideration of the sale of royalty oil to an eligible refiner.

(e) If applications are filed by two or more eligible refiners for the same oil, the Director will determine how the oil is to be allocated. In making his determination, the Director will consider, among other things, how much crude oil each applicant needs in order to operate its refinery at capacity, the size of the refinery, whether the refinery is able to produce the types of refined products needed in the state, and how much of the refinery's product is presently sold in the state. The Director may solicit information from the eligible refiners to facilitate prorata allocations when required.

(f) Except in the circumstances defined in Subsection (g) of this section and Section 7(b) of this chapter, all royalty oil purchased by an eligible refiner must be refined in that refiner's facility within the state and may not be resold in kind.

(g) Eligible refiners purchasing royalty oil may enter into agreements for the processing of the royalty oil only if justified by reason of operational interruption or to minimize transportation, distribution, and handling costs. Processing agreements shall not result in a reduction in the amount of refined products for existing available markets within the state or the market value of the oil delivered. Processing agreements will not be effective until approved by the Director.

(h) The Director shall specify or approve the form of the contract to be used in such sale of royalty oil to an eligible refiner. The Director shall execute the contract, or contracts, of sale of royalty oil on behalf of the Board upon approval of the Board.

(j) Contracts for the sale of royalty oil to eligible refiners within the state shall be for a maximum term of two (2) years.

(k) Eligible refiners must provide a performance and payment bond in a sum sufficient to cover the estimated monthly production for three (3) months of all of the Board's crude oil royalty in-kind volume contracted. Bond may be raised at the discretion of the Board.

Notes

060-7 Wyo. Code R. § 7-4