Houston (Platts)--15May2007

A bill that would create a Louisiana non-profit corporation to tap future
revenues from oil and gas drilling in the federal waters of the Outer
Continental Shelf, with the funds to be spent on protection of the state's
coastline is to be considered by lawmakers later this week, sources said.

     The proposed law, S.B. 53, was approved by the state Senate Finance
Committee Monday and is expected to be introduced on the Senate floor within
"the next couple of days," State Senator Reggie Dupre, the bill's sponsor,
told Platts. The bill would allow the state to borrow against future funds it
is expected to receive from OCS royalty revenues.

     The proposed legislation, which has the backing of Governor Kathleen
Babineaux Blanco, would create the Louisiana Coastal Protection and
Restoration Financing Corp., a non-profit corporation, similar to one set up
by the state to handle monies due to Louisiana from the settlement of a
lawsuit against tobacco companies. 

     Dupre said the new corporation would provide a way to begin to take
advantage of revenues that the state is projected to receive as a result of
the federal OCS legislation, which President Bush signed into law in December
2006. That law will give the states of Louisiana, Alabama, Mississippi and
Texas a 37.5% share of new OCS gas and oil production revenues. 

     "It's going to take 10 years before we start to see some significant
revenue from drilling activity on new leases," he said. "We cannot wait 10
years to do some projects." 

     He said an example of this is the projects the state plans to undertake
to protect its low-lying barrier islands, which are rapidly being eaten away
by the encroaching waters of the Gulf of Mexico. "These barrier islands won't
even be there any more in 10 years," he said.

     Dupre said that over the next decade, as offshore
exploration-and-production companies are just beginning to ramp up their
operations to begin production from new OCS leases, the state's percentage of
revenue from these leases is only expected to average about $20 million a
year. However, beginning in the year 2017 those same leases are expected to
bring $650 million a year in revenues to Louisiana. 

		--Jim Magill, jim_magill@platts.com