BISMARCK, N.D. (AP) — A North Dakota legislative committee has approved new oil and gas rules, including regulations that will add transparency to royalty statements.

The Administrative Rules Committee approved the new rules Monday, making the final step to move the regulations forward, the Bismarck Tribune reported . The Industrial Commission approved the rules in December after seeking public input, and the committee's approval was the final step for them to proceed.

The transparency regulations will require oil companies to identify the amount and purpose of each deduction taken from royalty payments. Any deductions taken from oil and gas royalties will need to be labeled under categories of transportation, processing, compression and administrative costs.

Royalty owners expressed frustration about the lack of information from oil companies about deductions taken out of royalty checks, said Bruce Hicks, assistant director for the North Dakota Oil and Gas Division.

"Royalty owners indicated that, when they asked for any type of follow-up on this, they get really vague and ambiguous statements," Hicks said.

The royalty statement regulations will go into effect July 1, 2019, to give oil companies time to comply. Hicks said the deadline will also offer time to respond if legislators further address the royalty statement issue during the 2019 session.

An initial estimate shows it could cost $500,000 per operator to upgrade software systems to comply with the new rules, according to Brady Pelton, government affairs manager for the North Dakota Petroleum Council. He said the industry group has a task force working toward implementing the regulations.


Information from: Bismarck Tribune,