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Lease of Oil and Gas Deposits |
The Secretary of the Interior is authorized to lease deposits of oil and gas in or under lands embraced in railroad or other rights of way acquired under any law of the United States, whether the same be a base fee or mere easement. However, no lease can be executed except to the municipality, corporation, firm, association, or individual by whom such right of way was acquired, or to the lawful successor, assignee, or transferee of such municipality, corporation, firm, association, or individual.
The right conferred, subject to the approval of the Secretary of the Interior, can be assigned or sublet by the owner to any corporation, firm, association, or individual.
The Secretary of the Interior notifies the owner or lessee of adjoining lands and allows him a reasonable time, fixed in the notice given, within which he is to submit an offer or bid of the amount or percentage of compensatory royalty that such owner agrees to pay for the extraction through wells on his or its adjoining land, of the oil or gas under and from such adjoining right of way, and at the same time afford the holder of the railroad or other right of way a like opportunity within the same time to submit its bid or offer as to the amount or percentage of royalty it will agree to pay. In case of competing offers by the said parties in interest, the Secretary awards the right to extract the oil and gas to the bidder, making the offer in his opinion most advantageous to the United States. In case one bid or offer is received after notice duly given, he may, in his discretion, award the right to extract the oil and gas to such bidder.
(See:http://www.law.cornell.edu/uscode/html/uscode30/usc_sup_01_30_10_5.html)
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