43 CFR § 3178.3 - Production on which royalty is not due.

---
identifier: "/us/cfr/t43/s3178.3"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "43 CFR § 3178.3 - Production on which royalty is not due."
title_number: 43
title_name: "Public Lands: Interior"
section_number: "3178.3"
section_name: "Production on which royalty is not due."
chapter_name: "BUREAU OF LAND MANAGEMENT, DEPARTMENT OF THE INTERIOR"
subchapter_number: "C"
subchapter_name: "MINERALS MANAGEMENT (3000)"
part_number: "3170"
part_name: "ONSHORE OIL AND GAS PRODUCTION"
positive_law: false
currency: "2026-03-24"
last_updated: "2026-03-24"
format_version: "1.1.0"
generator: "[email protected]"
authority: "25 U.S.C. 396d and 2107; 30 U.S.C. 189, 306, 359, and 1751; and 43 U.S.C. 1732(b), 1733, and 1740."
regulatory_source: "81 FR 81421, Nov. 17, 2016, unless otherwise noted."
cfr_part: "3170"
---


# 3178.3 Production on which royalty is not due.

(a) To the extent specified in §§ 3178.4 and 3178.5, royalty is not due on:

(1) Oil or gas that is produced from a lease or communitized area and used for operations and production purposes (including placing oil or gas in marketable condition) on the same lease or communitized area without being removed from the lease or communitized area; or

(2) Oil or gas that is produced from a unit PA and used for operations and production purposes (including placing oil or gas in marketable condition) on the unit, for the same unit PA, without being removed from the unit.

(b) For the uses described in § 3178.5, the operator must obtain prior written BLM approval for the volumes used for operational and production purposes to be royalty free.