Outer Continental Shelf (OCS) Beaufort Sea Alaska, Oil and Gas Lease Sale 202, 12817-12822 [07-1298]
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Federal Register / Vol. 72, No. 52 / Monday, March 19, 2007 / Notices
Estimated Reporting and
Recordkeeping ‘‘Non-Hour Cost’’
Burden: There are two non-hour costs
associated with this information
collection. The estimated non-hour cost
burden is $603,125. Sections 256.62 and
256.64(a) require respondents to pay
filing fees when submitting a request for
assignment or transfer, and to file
documents for record purposes. The
application filing fees are required to
recover the Federal Government’s
processing costs. We have not identified
any other ‘‘non-hour cost’’ burdens
associated with this collection of
information.
Public Disclosure Statement: The PRA
(44 U.S.C. 3501, et seq.) provides that an
agency may not conduct or sponsor a
collection of information unless it
displays a currently valid OMB control
number. Until OMB approves a
collection of information, you are not
obligated to respond.
Comments: Section 3506(c)(2)(A) of
the PRA (44 U.S.C. 3501, et seq.)
requires each agency ‘‘* * * to provide
notice * * * and otherwise consult
with members of the public and affected
agencies concerning each proposed
collection of information * * *’’
Agencies must specifically solicit
comments to: (a) Evaluate whether the
proposed collection of information is
necessary for the agency to perform its
duties, including whether the
information is useful; (b) evaluate the
accuracy of the agency’s estimate of the
burden of the proposed collection of
information; (c) enhance the quality,
usefulness, and clarity of the
information to be collected; and (d)
minimize the burden on the
respondents, including the use of
automated collection techniques or
other forms of information technology.
To comply with the public
consultation process, on August 16,
2006, we published a Federal Register
notice (71 FR 47243) announcing that
we would submit this ICR to OMB for
approval. The notice provided the
required 60-day comment period. In
addition, § 256.0 and the PRA statement
on the MMS forms display the OMB
control number, specifies that the public
may comment at anytime on the
collection of information required in the
30 CFR part 256 regulations and forms,
and provides the address to which they
should send comments. We have
received one comment in response to
those efforts, but it was not germane to
the paperwork burden of the
information collection.
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If you wish to comment in response
to this notice, you may send your
comments to the offices listed under the
ADDRESSES section of this notice. OMB
has up to 60 days to approve or
disapprove the information collection
but may respond after 30 days.
Therefore, to ensure maximum
consideration, OMB should receive
public comments by April 18, 2007.
Public Comment Procedures: The
MMS’s practice is to make comments,
including names and addresses of
respondents, available for public
review. If you wish your name and/or
address to be withheld, you must state
this prominently at the beginning of
your comment. The MMS will honor the
request to the extent allowable by the
law; however, anonymous comments
will not be considered. There may be
circumstances in which we would
withhold from the record a respondent’s
identity, as allowable by the law. If you
wish us to withhold your name and/or
address, you must state this
prominently at the beginning of your
comment. In addition, you must present
a rationale for withholding this
information. This rationale must
demonstrate that disclosure ‘‘would
constitute an unwarranted invasion of
privacy.’’ Unsupported assertions will
not meet this burden. In the absence of
exceptional, documentable
circumstances, this information will be
released. All submissions from
organizations or businesses, and from
individuals identifying themselves as
representatives or officials of
organizations or businesses, will be
made available for public inspection in
their entirety.
MMS Information Collection
Clearance Officer: Arlene Bajusz, (202)
208–7744.
Dated: November 30, 2006.
E.P. Danenberger,
Chief, Office of Offshore Regulatory Programs.
This document was received at the Office
of the Federal Register on March 13, 2007.
[FR Doc. E7–4888 Filed 3–16–07; 8:45 am]
BILLING CODE 4310–MR–P
DEPARTMENT OF THE INTERIOR
Minerals Management Service
Outer Continental Shelf (OCS) Beaufort
Sea Alaska, Oil and Gas Lease Sale
202
AGENCY:
Final Notice of Sale OCS Oil
and Gas Lease Sale 202, Beaufort Sea.
ACTION:
SUMMARY: The MMS will hold OCS Oil
and Gas Lease Sale 202 on April 18,
2007, in accordance with provisions of
the OCS Lands Act (43 U.S.C. 1331–
1356, as amended), the implementing
regulations (30 CFR part 256), and the
OCS Oil and Gas Leasing Program for
2002–2007.
Lease Sale 202 is scheduled to be
held on April 18, 2007, at the Wilda
Marston Theatre, Z. J. Loussac Public
Library, 3600 Denali Street, Anchorage,
Alaska. Public reading will begin at 9
a.m. All times referred to in this
document are local Anchorage, Alaska
times, unless otherwise specified.
DATES:
A package containing the
Final Notice of Sale (NOS) and several
supporting and essential documents
referenced herein are available from:
ADDRESSES:
Alaska OCS Region, Information
Resource Center, Minerals Management
Service, 3801 Centerpoint Drive, Suite
500, Anchorage, Alaska 99503–5823,
Telephone: (907) 334–5200 or 1–800–
764–2627.
These documents are also available on
the MMS Alaska OCS Region’s Web site
at https://www.mms.gov/alaska.
Bid Submission Deadline: Bidders
will be required to submit bids to the
MMS at the Alaska OCS Region Office,
3801 Centerpoint Drive, Suite 500,
Anchorage, Alaska 99503, by 10 a.m. on
the day before the sale, Tuesday, April
17, 2007. If bids are mailed, the
envelope containing all of the sealed
bids must be marked as follows:
Attention: Mr. Fred King, Contains
Sealed Bids for Sale 202.
If bids are received later than the time
and date specified above, they will be
returned unopened to the bidders.
Bidders may not modify or withdraw
their bids unless the Regional Director,
Alaska OCS Region receives a written
modification or written withdrawal
request prior to 10 a.m., Tuesday, April
17, 2007. Should an unexpected event
such as an earthquake or travel
restrictions be significantly disruptive to
bid submission, the Alaska OCS Region
Minerals Management Service,
Interior.
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may extend the Bid Submission
Deadline. Bidders may call (907) 334–
5200 for information about the possible
extension of the Bid Submission
Deadline due to such an event.
Four blocks in the easternmost
Beaufort Sea area are subject to claims
by both the United States and Canada.
This Notice refers to this area as the
Disputed Portion of the Beaufort Sea.
The section on Method of Bidding
identifies the four blocks and describes
the procedures for submitting bids for
them.
Area Offered for Leasing: The MMS is
offering for leasing all whole and partial
blocks listed in the document ‘‘Blocks
Available for Leasing in OCS Oil and
Gas Lease Sale 202’’ included in the
Final NOS 202 package. All of these
blocks are shown on the following
Official Protraction Diagrams (which
may be purchased from the Alaska OCS
Region):
NR 05–01, Dease Inlet, revised
September 30, 1997
NR 05–02, Harrison Bay North, revised
September 30, 1997
NR 05–03, Teshekpuk, revised
September 30, 1997
NR 05–04, Harrison Bay, revised
September 30, 1997
NR 06–01, Beechey Point North,
approved February 1, 1996
NR 06–03, Beechey Point, revised
September 30, 1997
NR 06–04, Flaxman Island, revised
September 30, 1997
NR 07–03, Barter Island, revised
September 30, 1997
NR 07–05, Demarcation Point, revised
September 30, 1997
NR 07–06, Mackenzie Canyon, revised
September 30, 1997
Official block descriptions are derived
from these diagrams; however, not all
blocks included on a diagram are being
offered. To ascertain which blocks are
being offered and the royalty suspension
provisions that apply, you must refer to
the document ‘‘Blocks Available for
Leasing in OCS Oil and Gas Lease Sale
202.’’ The Beaufort Sea OCS Oil and Gas
Lease Sale 202 Locator Map is also
available to assist in locating the blocks
relative to the adjacent areas. The
Locator Map is for use in identifying
locations of blocks but is not part of the
official description of blocks available
for lease. Some of the blocks may be
partially encumbered by an existing
lease, or transected by administrative
lines such as the Federal/State
jurisdictional line. Partial block
descriptions are derived from
Supplemental Official OCS Block
Diagrams and OCS Composite Block
Diagrams, which are available upon
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request at the address, phone number,
or Internet site given above.
Statutes and Regulations: Each lease
issued in this lease sale is subject to the
OCS Lands Act of August 7, 1953, 67
Stat. 462; 43 U.S.C. 1331 et seq., as
amended (92 Stat. 629), hereinafter
called ‘‘the Act’’; all regulations issued
pursuant to the Act and in existence
upon the effective date of the lease; all
regulations issued pursuant to the
statute in the future which provide for
the prevention of waste and
conservation of the natural resources of
the OCS and the protection of
correlative rights therein; and all other
applicable statutes and regulations.
Lease Terms and Conditions: For
leases resulting from this sale the
following terms and conditions apply:
Initial Period: 10 years.
Minimum Bonus Bid Amounts: $37.50
per hectare, or a fraction thereof, for all
blocks in Zone A and $25.00 per
hectare, or a fraction thereof, for all
blocks in Zone B. Refer to the final
Notice of Sale, Beaufort Sea Sale 202,
April 2007 map and the Summary Table
of Minimum Bids, Minimum Royalty
Rates, and Rental Rates shown below.
Rental Rates: The Lessee shall pay the
Lessor, on or before the first day of each
lease year which commences prior to a
discovery in paying quantities of oil or
gas on the leased area, a rental at the
rate shown below in the Summary Table
of Minimum Bids, Minimum Royalty
Rates, and Rental Rates. During the time
period in which a lease is classified as
producible, i.e., following a discovery in
paying quantities, but before royaltybearing production begins, a rental of
$13 per hectare applies in both zones
and is paid at the end of each lease year
until the start of royalty-bearing
production.
Minimum Royalty Rates: The Lessee
shall pay the Lessor, at the expiration of
each lease year which commences after
the start of royalty-bearing production, a
minimum royalty of $13 per hectare, or
fraction thereof, with credit applied for
actual royalty paid during the lease
year. If actual royalty paid exceeds the
minimum royalty requirement, then no
minimum royalty payment is due.
Royalty Rates: A 121⁄2 percent royalty
rate will apply for all blocks.
SUMMARY TABLE OF MINIMUM BIDS,
MINIMUM ROYALTY RATES, AND
RENTAL RATES
Terms (values per
hectare or fraction
thereof)
Royalty Rate ............
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Zone A
121⁄2%
fixed.
Sfmt 4703
Zone B
121⁄2%
fixed
SUMMARY TABLE OF MINIMUM BIDS,
MINIMUM ROYALTY RATES, AND
RENTAL RATES—Continued
Terms (values per
hectare or fraction
thereof)
Zone A
Minimum Bonus Bid
Minimum Royalty
Rate.
Rental Rates:
Year 1 ..................
Year 2 ..................
Year 3 ..................
Year 4 ..................
Year 5 ..................
Year 6 ..................
Year 7 ..................
Year 8 ..................
Year 9 ..................
Year 10 ................
Zone B
$37.50 ....
$13.00 ....
$25.00
$13.00
$7.50 ......
$7.50 ......
$7.50 ......
$7.50 ......
$7.50 ......
$12.00 ....
$17.00 ....
$22.00 ....
$30.00 ....
$30.00 ....
$2.50
$3.75
$5.00
$6.25
$7.50
$10.00
$12.00
$15.00
$17.00
$20.00
Royalty Suspension Areas: Royalty
suspension provisions apply to first oil
production. Royalty suspensions on the
production of oil and condensate,
prorated by lease acreage and subject to
price thresholds, will apply to all
blocks. Royalty suspension volumes
(RSV) are based on 2 zones, Zone A and
Zone B, as depicted on the Map. More
specific details regarding royalty
suspension eligibility, applicable price
thresholds and implementations are
included below as well as in the
document ‘‘Royalty Suspension
Provisions, Sale 202’’ in the Final NOS
202 package.
Royalty Suspension Provisions: In
accordance with applicable regulations
at 30 CFR 260, the following royalty
suspension provisions apply to leases
issued as a result of Beaufort Sea Oil
and Gas Lease Sale 202. The zones in
which blocks are indicated on the Block
List and the map included in the Notice
of Sale package are available from the
MMS OCS Alaska Region office.
These Royalty Suspension Provisions
apply to Oil Production. In addition,
refer to 30 CFR 218.151 and applicable
parts of 260.120–260.124 for regulations
on royalty suspensions and rental
obligations that will apply to your lease.
1. A lease in the Beaufort Sea,
depending on surface area and zone,
will receive a royalty suspension
volume (RSV) as follows:
Lease size
hectares
Less than 771 ...
771 to less than
1541 ..............
1541 or more ....
Zone A
million barrels RSV
Zone B
million barrels RSV
10
15
20
30
30
45
2. The RSV applies only to liquid
hydrocarbon production, i.e., oil and
condensates. Natural gas volumes that
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leave the lease are subject to original
lease-specified royalties. The market
value of natural gas will be determined
by MMS’s Minerals Revenue
Management (MRM) office. The MRM
will value the natural gas from Sale 202
based on its potential uses and
applicable market characteristics at the
time the gas is produced.
3. Each lessee must pay royalty on
production of oil that might otherwise
receive royalty relief (in 30 CFR part
260) for any calendar year during which
the actual New York Mercantile
Exchange (NYMEX) annual price of oil
exceeds the ‘‘ceiling’’ price threshold
(adjusted for inflation) for oil in that
year. Such production will be deducted
from the remaining RSV. The actual
NYMEX annual price of oil is defined as
the arithmetic average of the daily
closing prices for the ‘‘nearby delivery
month’’ on the NYMEX for oil (light
sweet crude) in a calendar year. The
actual NYMEX annual price of oil is
calculated by averaging the daily closing
prices of oil for each month in the year,
and then averaging the 12 monthly
averages.
(a) The ceiling price threshold for oil
in any year, say t, is determined by
inflating the base year 2004 oil price of
$39 per barrel. This base year price is
modified by the percentage change in
the implicit price deflator as reported by
the U.S. Department of Commerce,
Bureau of Economic Analysis, for the
interval between 2004 and year t,
resulting in the adjusted oil price ceiling
for year t. For example, if the deflator
indicates that inflation is 1.6 percent in
2005, 2.1 percent in 2006, and 2.5
percent in 2007, then the price ceiling
in calendar year 2007 would become
$41.47 per barrel for oil. Therefore,
royalty on all oil production in calendar
year 2007 would be due if the 2007
actual NYMEX oil price as calculated
above exceeds $41.47 per barrel. (See
exception in item 5 below.)
(b) Royalties on oil production, when
the actual NYMEX annual price of oil
exceeds the ceiling price in any
calendar year, must be paid no later
than 90 days after the end of that
calendar year. (See 30 CFR 260.122(b)).
Also, when the actual NYMEX annual
price of oil exceeds the ceiling price in
any calendar year, royalties on oil
production must be provisionally paid
in the following calendar year. (See 30
CFR 260.122(c)).
4. If the actual NYMEX quarterly price
of oil is at or below the fixed ‘‘floor’’
price threshold of $21 per barrel (the
price will not be adjusted for inflation)
in any calendar quarter, then oil
produced during that calendar quarter
would be royalty free and would not
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count against the lease’s remaining RSV.
However, if the actual NYMEX quarterly
price of oil is at or below the floor price
after the RSV has been fully used, the
lessee receives no additional royaltyfree production.
The actual NYMEX quarterly price of
oil is defined as the arithmetic average
of the daily closing prices for the
‘‘nearby delivery month’’ on the
NYMEX for oil in the calendar quarter.
The applicable calendar year quarters
are January—March, April—June, July—
September, and October—December.
The actual NYMEX quarterly price of oil
is calculated by averaging the daily
closing prices of oil for each month in
the quarter, and then averaging the 3
monthly averages.
5. Within the same calendar year, the
actual NYMEX quarterly price of oil
could be equal to or less than the price
floor in one or more quarters, but the
actual NYMEX annual price of oil could
be greater than the ceiling price. If that
were to occur, and the original RSV for
the lease has not been exhausted, the
consequences of the actual NYMEX
annual price of oil exceeding the price
ceiling for the year would apply only to
oil production during those quarters of
the year in which the actual NYMEX
quarterly price of oil is above the floor
price. For example, assume that oil
production from a lease is 8 million
barrels in a calendar year, and the actual
NYMEX annual price of oil is greater
than the ceiling price. Assume further
that the production of oil from that lease
is 2 million barrels during a quarter of
that same calendar year, and the actual
NYMEX quarterly price of oil for that
quarter is equal to or less than the floor
price. In this situation, no royalties
would be due on that quarter’s oil
production, and the remaining RSV for
the lease would be unchanged for that
quarter. Royalties, however, would be
due on the 6 million barrels of oil
produced during the other 3 quarters of
that year, and the RSV remaining for the
lease at the end of the year would be 6
million barrels less than it was at the
beginning of the year.
6. For purposes of the RSV, a Sale 202
lease that is part of an approved unit
agreement can only apply allocated
production from the unit against the
lease’s RSV if that lease is included in
an approved participating area. The RSV
will be applied to each lease consistent
with the production allocation schedule
approved by the MMS for the
participating area. Participating area
means all or parts of unit tracts
described and designated as a
Participating Area under the unit
agreement for the purposes of allocating
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12819
one or more unitized substances
produced from a reservoir.
7. Price thresholds apply throughout
those periods (calendar year for the
ceiling and quarter of the year for the
floor) that commence with some RSV
remaining unused.
8. A lessee must resume paying full
royalties on the first day of the month
following the month in which the RSV
is exhausted. Lessees do not owe
royalties for the remainder of the month
in which the RSV is exhausted, unless
the actual NYMEX annual price of oil
exceeds the ceiling price threshold for
that year.
9. The MMS will provide notice when
the actual NYMEX annual price of oil is
above the ceiling price threshold, or
when the actual NYMEX quarterly price
of oil is equal to or below the floor price
threshold. Information on actual and
threshold oil prices can be found at the
MMS Web site (https://www.mms.gov/
econ).
10. Minimum royalty requirements
apply during RSV periods. Debarment
and Suspension (Nonprocurement): As
required by the MMS, each company
that has been awarded a lease must
execute all copies of the lease (Form
MMS–2005 (March 1986) as amended),
pay by EFT the balance of the bonus bid
amount and the first year’s rental for
each lease issued in accordance with the
requirements of 30 CFR 218.155, and
satisfy the bonding requirements of 30
CFR 256, subpart I, as amended.
Also, in accordance with regulations
pursuant to 43 CFR, part 42, subpart C,
the lessee shall comply with the U.S.
Department of the Interior’s
nonprocurement debarment and
suspension requirements and agrees to
communicate this requirement to
comply with these regulations to
persons with whom the lessee does
business as it relates to this lease by
including this term as a condition in
their contracts and other transactions.
Execution of the lease, which includes
an Addendum specific to debarment, by
each lessee constitutes notification to
the MMS that each lessee is not
excluded, disqualified, or convicted of a
crime as described in 43 CFR 42.335,
unless the lessee has provided a
statement disclosing information as
described in 43 CFR 42.335, and the
MMS receives an exception from the
U.S. Department of the Interior as
described in 43 CFR 42.405 and 42.120.
Stipulations and Information to
Lessees: The document entitled ‘‘Lease
Stipulations and Information to Lessees
for Oil and Gas Lease Sale 202’’ contains
the text of the Stipulations and the
Information to Lessees clauses. This
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document is included in the Final NOS
package.
Method of Bidding: Procedures for the
submission of bids in Sale 202 are
described in paragraph 1 below.
Procedures for the submission of bids
for the four blocks in the Disputed
Portion of the Beaufort Sea will differ as
described in paragraph 2 below.
1. Submission of Bids. For each block
bid upon, a bidder must submit a
separate signed bid in a sealed envelope
labeled ‘‘Sealed bid for Oil and Gas
Lease Sale 202, not to be opened until
9 a.m., Wednesday, April 18, 2007.’’
The total amount of the bid must be in
whole dollars; any cent amount above
the whole dollar will be ignored by
MMS. Details of the information
required on the bid(s) and the bid
envelope(s) are specified in the
document ‘‘Bid Form and Envelope’’
contained in the Final NOS 202
package.
2. Submission of Bids in the Disputed
Portion of the Beaufort Sea. Procedures
for the submission of bids on blocks
6201, 6251, 6301, and 6361 in Official
Protraction Diagram NR 07–06 will
differ from procedures in paragraph (1.)
above as follows:
(a) Separate, signed bids on these
blocks must be submitted in sealed
envelopes labeled only with ‘‘Disputed
Portion of the Beaufort Sea,’’ Company
Number, and a sequential bid number
for the company submitting the bid(s).
The envelope thus would be in the
following format:
(b) Disputed Portion of the Beaufort
Sea Bid, Company No.: 00000, Bid No.:
1.
On or before April 18, 2012, the MMS
will determine whether it is in the best
interest of the United States either to
open bids for these blocks or to return
the bids unopened. The MMS will
notify bidders at least 30 days before bid
opening. Bidders on these blocks may
withdraw their bids at any time after
such notice and prior to 10 a.m. of the
day before bid opening. If the MMS does
not give notice by April 18, 2012, the
bids will be returned unopened. The
MMS reserves the right to return these
bids at any time. The MMS will not
disclose which blocks received bids or
the names of bidders in this area unless
the bids are opened.
Restricted Joint Bidders: The MMS
published a list of restricted joint
bidders, which applies to this sale, in
the Federal Register at 71 FR 70530 on
December 5, 2006. Bidders submitting
joint bids must state on the bid form the
proportionate interest of each
participating bidder, in percent to a
maximum of five decimal places, e.g.
33.33333 percent. The MMS may
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require bidders to submit additional
documents in accordance with 30 CFR
256.46. The MMS warns bidders against
violation of 18 U.S.C. 1860 prohibiting
unlawful combination or intimidation of
bidders. Bidders must execute all
documents in conformance with
signatory authorizations on file in the
Alaska OCS Region. Partnerships also
must submit or have on file a list of
signatories authorized to bind the
partnership. Bidders are advised that
MMS considers the signed bid to be a
legally binding obligation on the part of
the bidder(s) to comply with all
applicable regulations, including paying
the one-fifth bonus bid amount on all
high bids. A statement to this effect
must be included on each bid (see the
document ‘‘Bid Form and Envelope’’
contained in the Final NOS 202
package).
Bonus Bid Deposit: Each bidder
submitting an apparent high bid must
submit a bonus bid deposit to MMS
equal to one-fifth of the bonus bid
amount for each such bid submitted for
Sale 202. Under the authority granted by
30 CFR 256.46(b), the MMS requires
bidders to use electronic funds transfer
(EFT) procedures for payment of the
one-fifth bonus bid deposits, following
the detailed instructions contained in
the document ‘‘Instructions for Making
EFT Bonus Payments’’ included in the
Final NOS 202 package. All payments
must be electronically deposited into an
interest-bearing account in the U.S.
Treasury (account specified in the EFT
instruction) by 1 p.m. Eastern Time the
day following bid reading. Such a
deposit does not constitute and shall not
be construed as acceptance of any bid
on behalf of the United States. If a lease
is awarded, MMS requests that only one
transaction be used for payment of the
four-fifths bonus bid amount and the
first year’s rental.
Certain bid submitters [i.e., those that
do NOT currently own or operate an
OCS mineral lease OR those that have
ever defaulted on a one-fifth bonus
payment] will be required to guarantee
(secure) their one-fifth bonus payment
prior to the submission of bids. For
those who must secure the EFT one-fifth
bonus payment, one of the following
options may be provided: (1) A thirdparty guarantee; (2) an Amended
Development Bond Coverage; (3) a
Letter of Credit; or (4) a lump sum
payment in advance via EFT. The EFT
instructions specify the requirements for
each option.
Withdrawal of Blocks: The United
States reserves the right to withdraw
any block from this sale prior to a
written acceptance of a bid for the
block.
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Acceptance, Rejection or Return of
Bids: The United States reserves the
right to reject any and all bids. In any
case, no bid will be accepted, and no
lease for any block will be awarded to
any bidder, unless the bidder has
complied with all requirements of this
Notice, including the documents
contained in the associated Final NOS
Sale 202 package and applicable
regulations; the bid is the highest valid
bid; and the amount of the bid has been
determined to be adequate by the
authorized officer. The Attorney General
of the United States may also review the
results of the lease sale prior to the
acceptance of bids and issuance of
leases. Any bid submitted which does
not conform to the requirements of this
Notice, the OCS Lands Act, as amended,
and other applicable regulations may be
returned to the person submitting that
bid by the Regional Director and not
considered for acceptance. To ensure
that the Government receives a fair
return for the conveyance of lease rights
for this sale, high bids will be evaluated
in accordance with MMS bid adequacy
procedures.
Successful Bidders: As required by
MMS, each company that has been
awarded a lease must execute all three
copies of the lease (Form MMS–2005
(March 1986) as amended), pay by EFT
the balance of the bonus bid amount
and the first year’s rental for each lease
issued in accordance with the
requirements of 30 CFR 218.155, and
satisfy the bonding requirements of 30
CFR 256, subpart I.
Affirmative Action: The MMS
requests that, prior to bidding, Equal
Opportunity Affirmative Action
Representation Form MMS 2032 (June
1985) and Equal Opportunity
Compliance Report Certification Form
MMS 2033 (June 1985) be on file in the
Alaska OCS Region. This certification is
required by 41 CFR 60 and Executive
Order No. 11246 of September 24, 1965,
as amended by Executive Order No.
11375 of October 13, 1967. In any event,
prior to the execution of any lease
contract, both forms are required to be
on file in the Alaska OCS Region.
Jurisdiction: The United States claims
exclusive maritime resource jurisdiction
over the area offered. Canada claims
such jurisdiction over the four
easternmost blocks included in the sale
area. These blocks are located in Official
Protraction Diagram NR 07–06 and are
block numbers 6201, 6251, 6301, and
6351. Nothing in this Notice shall affect
or prejudice in any manner the position,
rights or interests of the United States
with respect to (1) the nature or extent
of U.S. internal waters or territorial sea,
(2) the U.S. Exclusive Economic Zone,
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(3) the U.S. continental shelf, or (4) U.S.
sovereign rights or jurisdiction for any
purpose whatsoever.
Notice of Bidding Systems: Section
8(a)(8) (43 U.S.C. 1337(a)(8)) of the OCS
Lands Act requires that, at least 30 days
before any lease sale, a Notice be
submitted to Congress and published in
the Federal Register. This Notice of
Bidding Systems is for Sale 202,
Beaufort Sea, scheduled to be held on
April 18, 2007.
In Sale 202, all blocks are being
offered under a bidding system that uses
VerDate Aug<31>2005
15:50 Mar 16, 2007
Jkt 211001
a cash bonus and a fixed royalty of 121⁄2
percent with a royalty suspension of up
to 30 million barrels of oil equivalent
per lease in Zone A of the sale area or
with a royalty suspension of up to 45
million barrels of oil equivalent per
lease in Zone B of the sale area. The
amount of royalty suspension available
on each lease is dependent on the area
of the lease and specified in the Sale
Notice. This bidding system is
authorized under 30 CFR 260.110(g),
which allows use of a cash bonus bid
PO 00000
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12821
with a royalty rate of not less than 121⁄2
percent and with suspension of royalties
for a period, volume, or value of
production, and an annual rental.
Analysis performed by MMS indicates
that use of this system provides an
incentive for development of this area
while ensuring that a fair sharing of
revenues will result if major discoveries
are made and produced.
Dated: March 12, 2007.
R.M. ‘‘Johnnie’’ Burton,
Director, Minerals Management Service.
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[FR Doc. 07–1298 Filed 3–16–07; 8:45 am]
BILLING CODE 4310–MR–P
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12822
]]>Agencies
[Federal Register Volume 72, Number 52 (Monday, March 19, 2007)]
[Notices]
[Pages 12817-12822]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 07-1298]
-----------------------------------------------------------------------
DEPARTMENT OF THE INTERIOR
Minerals Management Service
Outer Continental Shelf (OCS) Beaufort Sea Alaska, Oil and Gas
Lease Sale 202
AGENCY: Minerals Management Service, Interior.
ACTION: Final Notice of Sale OCS Oil and Gas Lease Sale 202, Beaufort
Sea.
-----------------------------------------------------------------------
SUMMARY: The MMS will hold OCS Oil and Gas Lease Sale 202 on April 18,
2007, in accordance with provisions of the OCS Lands Act (43 U.S.C.
1331-1356, as amended), the implementing regulations (30 CFR part 256),
and the OCS Oil and Gas Leasing Program for 2002-2007.
DATES: Lease Sale 202 is scheduled to be held on April 18, 2007, at the
Wilda Marston Theatre, Z. J. Loussac Public Library, 3600 Denali
Street, Anchorage, Alaska. Public reading will begin at 9 a.m. All
times referred to in this document are local Anchorage, Alaska times,
unless otherwise specified.
ADDRESSES: A package containing the Final Notice of Sale (NOS) and
several supporting and essential documents referenced herein are
available from:
Alaska OCS Region, Information Resource Center, Minerals Management
Service, 3801 Centerpoint Drive, Suite 500, Anchorage, Alaska 99503-
5823, Telephone: (907) 334-5200 or 1-800-764-2627.
These documents are also available on the MMS Alaska OCS Region's
Web site at https://www.mms.gov/alaska.
Bid Submission Deadline: Bidders will be required to submit bids to
the MMS at the Alaska OCS Region Office, 3801 Centerpoint Drive, Suite
500, Anchorage, Alaska 99503, by 10 a.m. on the day before the sale,
Tuesday, April 17, 2007. If bids are mailed, the envelope containing
all of the sealed bids must be marked as follows:
Attention: Mr. Fred King, Contains Sealed Bids for Sale 202.
If bids are received later than the time and date specified above,
they will be returned unopened to the bidders. Bidders may not modify
or withdraw their bids unless the Regional Director, Alaska OCS Region
receives a written modification or written withdrawal request prior to
10 a.m., Tuesday, April 17, 2007. Should an unexpected event such as an
earthquake or travel restrictions be significantly disruptive to bid
submission, the Alaska OCS Region
[[Page 12818]]
may extend the Bid Submission Deadline. Bidders may call (907) 334-5200
for information about the possible extension of the Bid Submission
Deadline due to such an event.
Four blocks in the easternmost Beaufort Sea area are subject to
claims by both the United States and Canada. This Notice refers to this
area as the Disputed Portion of the Beaufort Sea. The section on Method
of Bidding identifies the four blocks and describes the procedures for
submitting bids for them.
Area Offered for Leasing: The MMS is offering for leasing all whole
and partial blocks listed in the document ``Blocks Available for
Leasing in OCS Oil and Gas Lease Sale 202'' included in the Final NOS
202 package. All of these blocks are shown on the following Official
Protraction Diagrams (which may be purchased from the Alaska OCS
Region):
NR 05-01, Dease Inlet, revised September 30, 1997
NR 05-02, Harrison Bay North, revised September 30, 1997
NR 05-03, Teshekpuk, revised September 30, 1997
NR 05-04, Harrison Bay, revised September 30, 1997
NR 06-01, Beechey Point North, approved February 1, 1996
NR 06-03, Beechey Point, revised September 30, 1997
NR 06-04, Flaxman Island, revised September 30, 1997
NR 07-03, Barter Island, revised September 30, 1997
NR 07-05, Demarcation Point, revised September 30, 1997
NR 07-06, Mackenzie Canyon, revised September 30, 1997
Official block descriptions are derived from these diagrams;
however, not all blocks included on a diagram are being offered. To
ascertain which blocks are being offered and the royalty suspension
provisions that apply, you must refer to the document ``Blocks
Available for Leasing in OCS Oil and Gas Lease Sale 202.'' The Beaufort
Sea OCS Oil and Gas Lease Sale 202 Locator Map is also available to
assist in locating the blocks relative to the adjacent areas. The
Locator Map is for use in identifying locations of blocks but is not
part of the official description of blocks available for lease. Some of
the blocks may be partially encumbered by an existing lease, or
transected by administrative lines such as the Federal/State
jurisdictional line. Partial block descriptions are derived from
Supplemental Official OCS Block Diagrams and OCS Composite Block
Diagrams, which are available upon request at the address, phone
number, or Internet site given above.
Statutes and Regulations: Each lease issued in this lease sale is
subject to the OCS Lands Act of August 7, 1953, 67 Stat. 462; 43 U.S.C.
1331 et seq., as amended (92 Stat. 629), hereinafter called ``the
Act''; all regulations issued pursuant to the Act and in existence upon
the effective date of the lease; all regulations issued pursuant to the
statute in the future which provide for the prevention of waste and
conservation of the natural resources of the OCS and the protection of
correlative rights therein; and all other applicable statutes and
regulations.
Lease Terms and Conditions: For leases resulting from this sale the
following terms and conditions apply:
Initial Period: 10 years.
Minimum Bonus Bid Amounts: $37.50 per hectare, or a fraction
thereof, for all blocks in Zone A and $25.00 per hectare, or a fraction
thereof, for all blocks in Zone B. Refer to the final Notice of Sale,
Beaufort Sea Sale 202, April 2007 map and the Summary Table of Minimum
Bids, Minimum Royalty Rates, and Rental Rates shown below.
Rental Rates: The Lessee shall pay the Lessor, on or before the
first day of each lease year which commences prior to a discovery in
paying quantities of oil or gas on the leased area, a rental at the
rate shown below in the Summary Table of Minimum Bids, Minimum Royalty
Rates, and Rental Rates. During the time period in which a lease is
classified as producible, i.e., following a discovery in paying
quantities, but before royalty-bearing production begins, a rental of
$13 per hectare applies in both zones and is paid at the end of each
lease year until the start of royalty-bearing production.
Minimum Royalty Rates: The Lessee shall pay the Lessor, at the
expiration of each lease year which commences after the start of
royalty-bearing production, a minimum royalty of $13 per hectare, or
fraction thereof, with credit applied for actual royalty paid during
the lease year. If actual royalty paid exceeds the minimum royalty
requirement, then no minimum royalty payment is due.
Royalty Rates: A 12\1/2\ percent royalty rate will apply for all
blocks.
Summary Table of Minimum Bids, Minimum Royalty Rates, and Rental Rates
------------------------------------------------------------------------
Terms (values per hectare or
fraction thereof) Zone A Zone B
------------------------------------------------------------------------
Royalty Rate.................... 12\1/2\% fixed.... 12\1/2\% fixed
Minimum Bonus Bid............... $37.50............ $25.00
Minimum Royalty Rate............ $13.00............ $13.00
Rental Rates:
Year 1........................ $7.50............. $2.50
Year 2........................ $7.50............. $3.75
Year 3........................ $7.50............. $5.00
Year 4........................ $7.50............. $6.25
Year 5........................ $7.50............. $7.50
Year 6........................ $12.00............ $10.00
Year 7........................ $17.00............ $12.00
Year 8........................ $22.00............ $15.00
Year 9........................ $30.00............ $17.00
Year 10....................... $30.00............ $20.00
------------------------------------------------------------------------
Royalty Suspension Areas: Royalty suspension provisions apply to
first oil production. Royalty suspensions on the production of oil and
condensate, prorated by lease acreage and subject to price thresholds,
will apply to all blocks. Royalty suspension volumes (RSV) are based on
2 zones, Zone A and Zone B, as depicted on the Map. More specific
details regarding royalty suspension eligibility, applicable price
thresholds and implementations are included below as well as in the
document ``Royalty Suspension Provisions, Sale 202'' in the Final NOS
202 package.
Royalty Suspension Provisions: In accordance with applicable
regulations at 30 CFR 260, the following royalty suspension provisions
apply to leases issued as a result of Beaufort Sea Oil and Gas Lease
Sale 202. The zones in which blocks are indicated on the Block List and
the map included in the Notice of Sale package are available from the
MMS OCS Alaska Region office.
These Royalty Suspension Provisions apply to Oil Production. In
addition, refer to 30 CFR 218.151 and applicable parts of 260.120-
260.124 for regulations on royalty suspensions and rental obligations
that will apply to your lease.
1. A lease in the Beaufort Sea, depending on surface area and zone,
will receive a royalty suspension volume (RSV) as follows:
------------------------------------------------------------------------
Zone A Zone B
Lease size hectares million million
barrels RSV barrels RSV
------------------------------------------------------------------------
Less than 771................................. 10 15
771 to less than 1541......................... 20 30
1541 or more.................................. 30 45
------------------------------------------------------------------------
2. The RSV applies only to liquid hydrocarbon production, i.e., oil
and condensates. Natural gas volumes that
[[Page 12819]]
leave the lease are subject to original lease-specified royalties. The
market value of natural gas will be determined by MMS's Minerals
Revenue Management (MRM) office. The MRM will value the natural gas
from Sale 202 based on its potential uses and applicable market
characteristics at the time the gas is produced.
3. Each lessee must pay royalty on production of oil that might
otherwise receive royalty relief (in 30 CFR part 260) for any calendar
year during which the actual New York Mercantile Exchange (NYMEX)
annual price of oil exceeds the ``ceiling'' price threshold (adjusted
for inflation) for oil in that year. Such production will be deducted
from the remaining RSV. The actual NYMEX annual price of oil is defined
as the arithmetic average of the daily closing prices for the ``nearby
delivery month'' on the NYMEX for oil (light sweet crude) in a calendar
year. The actual NYMEX annual price of oil is calculated by averaging
the daily closing prices of oil for each month in the year, and then
averaging the 12 monthly averages.
(a) The ceiling price threshold for oil in any year, say t, is
determined by inflating the base year 2004 oil price of $39 per barrel.
This base year price is modified by the percentage change in the
implicit price deflator as reported by the U.S. Department of Commerce,
Bureau of Economic Analysis, for the interval between 2004 and year t,
resulting in the adjusted oil price ceiling for year t. For example, if
the deflator indicates that inflation is 1.6 percent in 2005, 2.1
percent in 2006, and 2.5 percent in 2007, then the price ceiling in
calendar year 2007 would become $41.47 per barrel for oil. Therefore,
royalty on all oil production in calendar year 2007 would be due if the
2007 actual NYMEX oil price as calculated above exceeds $41.47 per
barrel. (See exception in item 5 below.)
(b) Royalties on oil production, when the actual NYMEX annual price
of oil exceeds the ceiling price in any calendar year, must be paid no
later than 90 days after the end of that calendar year. (See 30 CFR
260.122(b)). Also, when the actual NYMEX annual price of oil exceeds
the ceiling price in any calendar year, royalties on oil production
must be provisionally paid in the following calendar year. (See 30 CFR
260.122(c)).
4. If the actual NYMEX quarterly price of oil is at or below the
fixed ``floor'' price threshold of $21 per barrel (the price will not
be adjusted for inflation) in any calendar quarter, then oil produced
during that calendar quarter would be royalty free and would not count
against the lease's remaining RSV. However, if the actual NYMEX
quarterly price of oil is at or below the floor price after the RSV has
been fully used, the lessee receives no additional royalty-free
production.
The actual NYMEX quarterly price of oil is defined as the
arithmetic average of the daily closing prices for the ``nearby
delivery month'' on the NYMEX for oil in the calendar quarter. The
applicable calendar year quarters are January--March, April--June,
July--September, and October--December. The actual NYMEX quarterly
price of oil is calculated by averaging the daily closing prices of oil
for each month in the quarter, and then averaging the 3 monthly
averages.
5. Within the same calendar year, the actual NYMEX quarterly price
of oil could be equal to or less than the price floor in one or more
quarters, but the actual NYMEX annual price of oil could be greater
than the ceiling price. If that were to occur, and the original RSV for
the lease has not been exhausted, the consequences of the actual NYMEX
annual price of oil exceeding the price ceiling for the year would
apply only to oil production during those quarters of the year in which
the actual NYMEX quarterly price of oil is above the floor price. For
example, assume that oil production from a lease is 8 million barrels
in a calendar year, and the actual NYMEX annual price of oil is greater
than the ceiling price. Assume further that the production of oil from
that lease is 2 million barrels during a quarter of that same calendar
year, and the actual NYMEX quarterly price of oil for that quarter is
equal to or less than the floor price. In this situation, no royalties
would be due on that quarter's oil production, and the remaining RSV
for the lease would be unchanged for that quarter. Royalties, however,
would be due on the 6 million barrels of oil produced during the other
3 quarters of that year, and the RSV remaining for the lease at the end
of the year would be 6 million barrels less than it was at the
beginning of the year.
6. For purposes of the RSV, a Sale 202 lease that is part of an
approved unit agreement can only apply allocated production from the
unit against the lease's RSV if that lease is included in an approved
participating area. The RSV will be applied to each lease consistent
with the production allocation schedule approved by the MMS for the
participating area. Participating area means all or parts of unit
tracts described and designated as a Participating Area under the unit
agreement for the purposes of allocating one or more unitized
substances produced from a reservoir.
7. Price thresholds apply throughout those periods (calendar year
for the ceiling and quarter of the year for the floor) that commence
with some RSV remaining unused.
8. A lessee must resume paying full royalties on the first day of
the month following the month in which the RSV is exhausted. Lessees do
not owe royalties for the remainder of the month in which the RSV is
exhausted, unless the actual NYMEX annual price of oil exceeds the
ceiling price threshold for that year.
9. The MMS will provide notice when the actual NYMEX annual price
of oil is above the ceiling price threshold, or when the actual NYMEX
quarterly price of oil is equal to or below the floor price threshold.
Information on actual and threshold oil prices can be found at the MMS
Web site (https://www.mms.gov/econ).
10. Minimum royalty requirements apply during RSV periods.
Debarment and Suspension (Nonprocurement): As required by the MMS, each
company that has been awarded a lease must execute all copies of the
lease (Form MMS-2005 (March 1986) as amended), pay by EFT the balance
of the bonus bid amount and the first year's rental for each lease
issued in accordance with the requirements of 30 CFR 218.155, and
satisfy the bonding requirements of 30 CFR 256, subpart I, as amended.
Also, in accordance with regulations pursuant to 43 CFR, part 42,
subpart C, the lessee shall comply with the U.S. Department of the
Interior's nonprocurement debarment and suspension requirements and
agrees to communicate this requirement to comply with these regulations
to persons with whom the lessee does business as it relates to this
lease by including this term as a condition in their contracts and
other transactions. Execution of the lease, which includes an Addendum
specific to debarment, by each lessee constitutes notification to the
MMS that each lessee is not excluded, disqualified, or convicted of a
crime as described in 43 CFR 42.335, unless the lessee has provided a
statement disclosing information as described in 43 CFR 42.335, and the
MMS receives an exception from the U.S. Department of the Interior as
described in 43 CFR 42.405 and 42.120.
Stipulations and Information to Lessees: The document entitled
``Lease Stipulations and Information to Lessees for Oil and Gas Lease
Sale 202'' contains the text of the Stipulations and the Information to
Lessees clauses. This
[[Page 12820]]
document is included in the Final NOS package.
Method of Bidding: Procedures for the submission of bids in Sale
202 are described in paragraph 1 below. Procedures for the submission
of bids for the four blocks in the Disputed Portion of the Beaufort Sea
will differ as described in paragraph 2 below.
1. Submission of Bids. For each block bid upon, a bidder must
submit a separate signed bid in a sealed envelope labeled ``Sealed bid
for Oil and Gas Lease Sale 202, not to be opened until 9 a.m.,
Wednesday, April 18, 2007.'' The total amount of the bid must be in
whole dollars; any cent amount above the whole dollar will be ignored
by MMS. Details of the information required on the bid(s) and the bid
envelope(s) are specified in the document ``Bid Form and Envelope''
contained in the Final NOS 202 package.
2. Submission of Bids in the Disputed Portion of the Beaufort Sea.
Procedures for the submission of bids on blocks 6201, 6251, 6301, and
6361 in Official Protraction Diagram NR 07-06 will differ from
procedures in paragraph (1.) above as follows:
(a) Separate, signed bids on these blocks must be submitted in
sealed envelopes labeled only with ``Disputed Portion of the Beaufort
Sea,'' Company Number, and a sequential bid number for the company
submitting the bid(s). The envelope thus would be in the following
format:
(b) Disputed Portion of the Beaufort Sea Bid, Company No.: 00000,
Bid No.: 1.
On or before April 18, 2012, the MMS will determine whether it is
in the best interest of the United States either to open bids for these
blocks or to return the bids unopened. The MMS will notify bidders at
least 30 days before bid opening. Bidders on these blocks may withdraw
their bids at any time after such notice and prior to 10 a.m. of the
day before bid opening. If the MMS does not give notice by April 18,
2012, the bids will be returned unopened. The MMS reserves the right to
return these bids at any time. The MMS will not disclose which blocks
received bids or the names of bidders in this area unless the bids are
opened.
Restricted Joint Bidders: The MMS published a list of restricted
joint bidders, which applies to this sale, in the Federal Register at
71 FR 70530 on December 5, 2006. Bidders submitting joint bids must
state on the bid form the proportionate interest of each participating
bidder, in percent to a maximum of five decimal places, e.g. 33.33333
percent. The MMS may require bidders to submit additional documents in
accordance with 30 CFR 256.46. The MMS warns bidders against violation
of 18 U.S.C. 1860 prohibiting unlawful combination or intimidation of
bidders. Bidders must execute all documents in conformance with
signatory authorizations on file in the Alaska OCS Region. Partnerships
also must submit or have on file a list of signatories authorized to
bind the partnership. Bidders are advised that MMS considers the signed
bid to be a legally binding obligation on the part of the bidder(s) to
comply with all applicable regulations, including paying the one-fifth
bonus bid amount on all high bids. A statement to this effect must be
included on each bid (see the document ``Bid Form and Envelope''
contained in the Final NOS 202 package).
Bonus Bid Deposit: Each bidder submitting an apparent high bid must
submit a bonus bid deposit to MMS equal to one-fifth of the bonus bid
amount for each such bid submitted for Sale 202. Under the authority
granted by 30 CFR 256.46(b), the MMS requires bidders to use electronic
funds transfer (EFT) procedures for payment of the one-fifth bonus bid
deposits, following the detailed instructions contained in the document
``Instructions for Making EFT Bonus Payments'' included in the Final
NOS 202 package. All payments must be electronically deposited into an
interest-bearing account in the U.S. Treasury (account specified in the
EFT instruction) by 1 p.m. Eastern Time the day following bid reading.
Such a deposit does not constitute and shall not be construed as
acceptance of any bid on behalf of the United States. If a lease is
awarded, MMS requests that only one transaction be used for payment of
the four-fifths bonus bid amount and the first year's rental.
Certain bid submitters [i.e., those that do NOT currently own or
operate an OCS mineral lease OR those that have ever defaulted on a
one-fifth bonus payment] will be required to guarantee (secure) their
one-fifth bonus payment prior to the submission of bids. For those who
must secure the EFT one-fifth bonus payment, one of the following
options may be provided: (1) A third-party guarantee; (2) an Amended
Development Bond Coverage; (3) a Letter of Credit; or (4) a lump sum
payment in advance via EFT. The EFT instructions specify the
requirements for each option.
Withdrawal of Blocks: The United States reserves the right to
withdraw any block from this sale prior to a written acceptance of a
bid for the block.
Acceptance, Rejection or Return of Bids: The United States reserves
the right to reject any and all bids. In any case, no bid will be
accepted, and no lease for any block will be awarded to any bidder,
unless the bidder has complied with all requirements of this Notice,
including the documents contained in the associated Final NOS Sale 202
package and applicable regulations; the bid is the highest valid bid;
and the amount of the bid has been determined to be adequate by the
authorized officer. The Attorney General of the United States may also
review the results of the lease sale prior to the acceptance of bids
and issuance of leases. Any bid submitted which does not conform to the
requirements of this Notice, the OCS Lands Act, as amended, and other
applicable regulations may be returned to the person submitting that
bid by the Regional Director and not considered for acceptance. To
ensure that the Government receives a fair return for the conveyance of
lease rights for this sale, high bids will be evaluated in accordance
with MMS bid adequacy procedures.
Successful Bidders: As required by MMS, each company that has been
awarded a lease must execute all three copies of the lease (Form MMS-
2005 (March 1986) as amended), pay by EFT the balance of the bonus bid
amount and the first year's rental for each lease issued in accordance
with the requirements of 30 CFR 218.155, and satisfy the bonding
requirements of 30 CFR 256, subpart I.
Affirmative Action: The MMS requests that, prior to bidding, Equal
Opportunity Affirmative Action Representation Form MMS 2032 (June 1985)
and Equal Opportunity Compliance Report Certification Form MMS 2033
(June 1985) be on file in the Alaska OCS Region. This certification is
required by 41 CFR 60 and Executive Order No. 11246 of September 24,
1965, as amended by Executive Order No. 11375 of October 13, 1967. In
any event, prior to the execution of any lease contract, both forms are
required to be on file in the Alaska OCS Region.
Jurisdiction: The United States claims exclusive maritime resource
jurisdiction over the area offered. Canada claims such jurisdiction
over the four easternmost blocks included in the sale area. These
blocks are located in Official Protraction Diagram NR 07-06 and are
block numbers 6201, 6251, 6301, and 6351. Nothing in this Notice shall
affect or prejudice in any manner the position, rights or interests of
the United States with respect to (1) the nature or extent of U.S.
internal waters or territorial sea, (2) the U.S. Exclusive Economic
Zone,
[[Page 12821]]
(3) the U.S. continental shelf, or (4) U.S. sovereign rights or
jurisdiction for any purpose whatsoever.
Notice of Bidding Systems: Section 8(a)(8) (43 U.S.C. 1337(a)(8))
of the OCS Lands Act requires that, at least 30 days before any lease
sale, a Notice be submitted to Congress and published in the Federal
Register. This Notice of Bidding Systems is for Sale 202, Beaufort Sea,
scheduled to be held on April 18, 2007.
In Sale 202, all blocks are being offered under a bidding system
that uses a cash bonus and a fixed royalty of 12\1/2\ percent with a
royalty suspension of up to 30 million barrels of oil equivalent per
lease in Zone A of the sale area or with a royalty suspension of up to
45 million barrels of oil equivalent per lease in Zone B of the sale
area. The amount of royalty suspension available on each lease is
dependent on the area of the lease and specified in the Sale Notice.
This bidding system is authorized under 30 CFR 260.110(g), which allows
use of a cash bonus bid with a royalty rate of not less than 12\1/2\
percent and with suspension of royalties for a period, volume, or value
of production, and an annual rental. Analysis performed by MMS
indicates that use of this system provides an incentive for development
of this area while ensuring that a fair sharing of revenues will result
if major discoveries are made and produced.
Dated: March 12, 2007.
R.M. ``Johnnie'' Burton,
Director, Minerals Management Service.
[[Page 12822]]
[GRAPHIC] [TIFF OMITTED] TN19MR07.000
[FR Doc. 07-1298 Filed 3-16-07; 8:45 am]
BILLING CODE 4310-MR-P
