FORT FOURCHON, LA (AP) — Some tenants at Port Fourchon, the main service hub for the Gulf of Mexico oilfield, will see lower rental rates starting April 1.
The Courier’s Aaren Gordon reports the Greater Lafourche Port Commission on Wednesday approved a 20 percent rental discount for port land leases.
Tenants have requested lower rents because of falling oil prices and they've met several times with commissioners.
U.S. benchmark crude oil closed Wednesday at $43.46 a barrel, its lowest point in nearly six years and more than 60 percent lower than the high of $115 a barrel in June.
"There's been several requests, a meeting with many members of our tenant base in attendance, as we have today to discuss the issues as far as the squeezes being put on our tenant base when it comes from the operators, when it comes to pricing, and that sort of thing has absolutely obviously trickled down to the port commission and the costs of our leases," the port's Executive Director Chett Chiasson said.
Chiasson recommended a 20 percent discount on all current basic rent for all Port Fourchon land leases.
Tenants with basic land rentals will see reductions while tenants that agreed to improvements by the port will not.
The discount will end March 31, 2016, or when the price of a barrel of crude reaches $70 per barrel for 60 consecutive days.
Those renting space at the South Lafourche Leonard Miller Jr. Airport in Galliano and mooring dolphins at the port won't see a reduced rent.
Chiasson said the discount does not affect the 5 percent annual escalation in the leases that is dictated by the landowners, not the commission.
The reason why we're doing this is, and I think that's what we discussed, is because we know there needs to be long-term viability of our tenant base and this would allow us to have the long-term sustainability of our current tenants in the future," Chiasson said.
Lease revenues make up nearly half of the port's budget.
