Modifications to the Bid Adequacy Procedures for Offshore Oil and Gas Lease Sales, 3433-3435 [2023-00842]

Download as PDF khammond on DSKJM1Z7X2PROD with NOTICES Federal Register / Vol. 88, No. 12 / Thursday, January 19, 2023 / Notices recent tax returns (up to three years) filed by the appellant. In addition, an appellant must annually submit financial statements, subject to audit, to support its net worth. ONRR uses the consolidated balance sheet or business information supplied to evaluate the financial solvency of a lessee, designee, or payor seeking a stay of payment obligation pending review. If the appellant does not have a consolidated balance sheet documenting its net worth, or if it does not meet the $300 million net worth requirement, ONRR will select a business information or credit reporting service to provide information concerning the appellant’s financial solvency. ONRR charges the appellant a $50 fee each time it reviews data from a business information or credit reporting service. The fee covers ONRR’s cost to determine an appellant’s financial solvency. E. U.S. Treasury Securities: An appellant may choose to secure its debts by requesting to use a U.S. Treasury Security (‘‘TS’’). The appellant must file the letter of request with ONRR prior to the invoice due date. The TS must be a U.S. Treasury note or bond with maturity equal to or greater than one year. The TS must equal 120 percent of the appealed amount plus 1 year of estimated interest (necessary to protect ONRR against interest rate fluctuations). ONRR only accepts book-entry TS. Title of Collections: Suspensions Pending Appeal and Bonding. OMB Control Number: 1012–0006. Form Numbers: ONRR–4435, ONRR– 4436, and ONRR–4437. Type of Review: Revision to a currently approved collection. Respondents/Affected Public: Businesses. Total Estimated Number of Annual Respondents: 107 appellants. Total Estimated Number of Annual Responses: 107. Estimated Completion Time per Response: The time per response is 120 mins. The average completion time is calculated by first multiplying the estimated annual burden hours (214 burden hours) by 60 to obtain the total annual burden minutes. Then the total annual burden minutes (12,840) is divided by the estimated annual responses (107). Total Estimated Number of Annual Burden Hours: 214 hours. Respondent’s Obligation: Mandatory. Frequency of Collection: Annually and on occasion. Total Estimated Annual Non-Hour Burden Cost: ONRR identified no ‘‘nonhour cost’’ burden associated with this collection of information. VerDate Sep<11>2014 17:49 Jan 18, 2023 Jkt 259001 Estimated Annual Reporting and Recordkeeping ‘‘Non-Hour’’ Cost Burden: There are no additional recordkeeping costs associated with this information collection. However, ONRR estimates 5 appellants per year will pay a $50 fee to obtain credit data from a business information or credit reporting service, which is a total ‘‘non-hour’’ cost burden of $250 per year (5 appellants per year × $50 = $250). An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The authority for this action is the PRA (44 U.S.C. 3501, et seq.). Howard Cantor, Acting Director, Office of Natural Resources Revenue. [FR Doc. 2023–01009 Filed 1–18–23; 8:45 am] BILLING CODE 4335–30–P DEPARTMENT OF THE INTERIOR Bureau of Ocean Energy Management [Docket No. BOEM–2023–0008] Modifications to the Bid Adequacy Procedures for Offshore Oil and Gas Lease Sales Bureau of Ocean Energy Management, Interior. ACTION: Notification of procedural changes; request for comments. AGENCY: The Bureau of Ocean Energy Management (BOEM) announces and invites comments on its intention to change its bid adequacy procedures (BAPs), which ensure the United States receives fair market value (FMV) from Outer Continental Shelf (OCS) oil and gas lease sales. BOEM proposes to discontinue the use of both tract classification and delayed valuation methodology. Instead, BOEM proposes to use a statistical lower bound confidence interval (LBCI), at the 90 percent confidence level, as a measure of bid adequacy. BOEM is also proposing other, minor adjustments to its BAPs to clarify and streamline its processes. DATES: BOEM must receive your comments by March 6, 2023. ADDRESSES: You may submit comments by either of the following methods: • Regulations.gov web portal: Navigate to https://www.regulations.gov and under the ‘‘Search’’ tab, in the space provided, type in Docket ID: BOEM– 2023–0008. Select the document that you would like to comment on and click on the ‘‘Comment’’ button to submit SUMMARY: PO 00000 Frm 00058 Fmt 4703 Sfmt 4703 3433 your comments. You may also view other comments already posted to the docket. • In written form by mail or other delivery services: Send comments in an envelope labeled ‘‘Comments for the proposed revised BAP’’ and addressed to Mr. Matt Frye, Chief, Resource Evaluation Division, Office of Strategic Resources, Bureau of Ocean Energy Management, 45600 Woodland Road, Sterling, VA 20166–9216. • For additional information on sending comments, see the ‘‘Public Participation and Availability of Comments’’ heading under the SUPPLEMENTARY INFORMATION section of this notice. The proposed, revised procedures are available for review at: https:// www.boem.gov/oil-gas-energy/energyeconomics/lease-sales-and-fair-marketvalue. A copy of BOEM’s current BAP entitled ‘‘Summary of Procedures for Determining Bid Adequacy at Offshore Oil and Gas Lease Sales, Effective March 2016 with Central Gulf of Mexico Sale 241 and Eastern Gulf of Mexico Sale 226’’ is available on BOEM’s website at: https://www.boem.gov/sites/default/ files/oil-and-gas-energy-program/ Energy-Economics/Fair-Market-Value/ Summary-of-Procedures-ForDetermining-Bid-Adequacy.pdf. Mr. Matt Frye, Chief, Resource Evaluation Division, Office of Strategic Resources, at (703) 787–1514 or email at matt.frye@ boem.gov. FOR FURTHER INFORMATION CONTACT: SUPPLEMENTARY INFORMATION: Background and Summary of Changes In administering the offshore oil and gas leasing program under the OCS Lands Act, the Secretary of the Interior is required to ensure that the Federal Government receives FMV for the lease rights granted and the rights conveyed. To carry out this responsibility since 1983, BOEM (and its predecessor agency) has used a two-phase, post-sale bid evaluation process to assess the adequacy of bids received in Federal offshore oil and gas lease sales. Under its BAP, BOEM reviews all high bids and evaluates all tracts to ensure that FMV is received for each OCS lease issued. The BAP relies on both evidence of market competition and in-house estimates of tract value. Currently, in phase 1 of the BAP, BOEM reviews all bids for legal sufficiency and anomalies to establish the set of bids to be evaluated for each tract. All tracts receiving legal bids are E:\FR\FM\19JAN1.SGM 19JAN1 khammond on DSKJM1Z7X2PROD with NOTICES 3434 Federal Register / Vol. 88, No. 12 / Thursday, January 19, 2023 / Notices then classified 1 as ‘‘drainage or development’’ (DD), ‘‘confirmed or wildcat’’ (CW), or ‘‘unknown’’ if undetermined at this phase. All CW tracts are tested for geologic and economic viability and high bids are accepted for tracts that BOEM determines to be nonviable. A nonviable tract is considered by BOEM not to have the potential capability of being explored, developed, and produced profitably under economic conditions present at the time of the lease sale. The remaining CW tracts are then reviewed under phase 2. All DD and unknown tracts begin at phase 2. In phase 2 of the BAP, BOEM may use its probabilistic discounted cash flow simulation model to generate up to four measures of bid adequacy to help determine if a tract’s high bid may be accepted. These four measures are: mean range of values (MROV), delayed mean Range of values (DMROV), adjusted delayed values (ADV), and revised arithmetic measure (RAM). The MROV is a single value that represents the maximum cash payment that a bidder can offer for acquiring the tract’s drilling and development property rights and still expect to make a normal rate of return on their investment. The DMROV is intended to allow a determination of whether, in cases where the high bid is below the MROV, leasing revenues consisting of the cash bonus plus royalties or profit shares would be greater if the high bid were to be accepted, rather than rejected and the tract reoffered in the next available sale. BOEM calculates the tract’s MROV and DMROV and designates the lesser of these two measures as the ADV. The RAM represents the average of the highest qualified bid, all other qualified bids that are at least 25 percent of the highest qualified bid, and the MROV. If the high bid is equal to or greater than any of these measures, the Regional Director may accept the highest qualified bid as representative of FMV for the tract. In October 2019, the Government Accountability Office (GAO) published a report entitled ‘‘Offshore Oil and Gas: Opportunities Exist to Better Ensure a Fair Return on Federal Resources’’ (GAO–19–531). In its report, GAO provided four recommendations to BOEM, including a recommendation to have a third party ‘‘examine the extent to which the bureau’s use of delayed 1 For definitions of BOEM tract classification, please refer to current bid adequacy procedures published on BOEM website: https:// www.boem.gov/sites/default/files/oil-and-gasenergy-program/Energy-Economics/Fair-MarketValue/Summary-of-Procedures-For-DeterminingBid-Adequacy.pdf. VerDate Sep<11>2014 17:49 Jan 18, 2023 Jkt 259001 valuations assures the receipt of fair market value, and make changes—such as terminating the use of delayed valuations or amending its model’s assumptions—as appropriate.’’ In response, BOEM committed to examine its use of delayed valuation and to identify any appropriate changes. After a 2-year comprehensive technical review of the delayed valuation methodology, BOEM intends to replace the delayed valuation methodology with a statistical lower bound confidence interval (LBCI) at a 90 percent confidence level as a decision criterion for accepting or rejecting qualified high bids on tracts offered in OCS oil and gas lease sales. Following extensive testing of the alternative approaches using both historical and current lease sale tract data and existing BOEM cash flow simulation models, BOEM determined that the LBCI approach would be the most appropriate substitute for the delayed valuation methodology. The LBCI is a statistical concept that captures the lower bound of a range of values encompassing the true unknown mean of the risked present worth 2 of the resources at the time of the lease sale. The LBCI incorporates the uncertainty of parameters unique to the valuation of each OCS oil and gas lease sale tract. These parameters may include, but are not limited to, subsurface characterization of reservoir properties, cost and timing of the development, and projected revenues. Unlike the delayed valuation methodology, the LBCI approach would not require that BOEM estimate the time delay period between the current OCS oil and gas lease sale and the projected next lease sale. As such, BOEM finds the LBCI to be a better approach going forward. Additionally, BOEM proposes to discontinue the use of tract classification in the BAP to streamline the bid review process. BOEM has found that this classification process has had minimal impact on its procedural analysis of FMV; since 1997, only approximately 1 percent of tracts have been classified as DD, and the remaining tracts have been classified as CW. The classification process has therefore been of limited utility to BOEM in the existing BAP. Therefore, in the proposed revised BAP, the formal tract classification process would be removed and all tracts receiving legal bids in phase 1 would be passed on to phase 2 2 Risked present worth is a net present value of the potential oil and gas resources contained in a tract adjusted for the geological risks of not finding hydrocarbons and the uncertainties associated with the development and economic parameters of that tract at the time of the lease sale. PO 00000 Frm 00059 Fmt 4703 Sfmt 4703 unless the tract is determined to be nonviable. In phase 2, BOEM may use its probabilistic discounted cash flow simulation model to generate up to two measures of bid adequacy: LBCI and RAM. A tract’s highest qualified bid would then be compared to the applicable measures of bid adequacy. If that bid is equal to or greater than either of these measures, the Regional Director may accept the highest qualified bid as representative of FMV for the tract. BOEM is also proposing other minor revisions to its procedures, for example, the removal of the ‘‘Definitions’’ section to streamline the document and ensure clarity. BOEM intends to assess bids using the revised BAP, once finalized, during lease sales included in the next National OCS Oil and Gas Leasing Program. Public Participation and Availability of Comments All comments will be made publicly available in the docket. BOEM will consider all comments before finalizing the revised BAP. All interested parties can submit written comments to BOEM. BOEM will protect privileged or proprietary information that you submit in accordance with the Freedom of Information Act (FOIA) and OCS Lands Act. To avoid inadvertent release of such information, interested parties should mark all documents and every page containing such information with ‘‘Confidential—Contains Proprietary Information.’’ To the extent a document contains a mix of proprietary and nonproprietary information, interested parties should clearly mark the portions of the document that are proprietary and those that are not. Exemption 4 of FOIA applies to trade secrets and commercial or financial information that you submit that is privileged or confidential. Please be aware that BOEM’s practice is to make all other comments, including the names and addresses of individuals, available for public inspection. Before including your address, phone number, email address, or other personal identifying information in your comment, please be advised that your entire comment, including your personal identifying information, may be made publicly available at any time. In order for BOEM to consider withholding from disclosure your personal identifying information, you must identify, in a cover letter, any information contained in the submittal of your comments that, if released, would constitute a clearly unwarranted invasion of your personal privacy. You must also briefly describe any possible harmful consequences of the disclosure, E:\FR\FM\19JAN1.SGM 19JAN1 Federal Register / Vol. 88, No. 12 / Thursday, January 19, 2023 / Notices such as embarrassment, injury, or other harm. Even if BOEM withholds your information in the context of its BAP modification process, your submission is subject to FOIA, and if your submission is requested under FOIA, your information will be withheld only if a determination is made that one of FOIA’s exemptions to disclosure applies. Such a determination will be made in accordance with the Department’s FOIA regulations and applicable law. BOEM will make available for public inspection, in their entirety, all comments submitted by organizations and businesses, or by individuals identifying themselves as representatives of organizations or businesses. Authority: 43 U.S.C. 1331 et seq. (Outer Continental Shelf Lands Act, as amended) and 30 CFR part 556. Amanda Lefton, Director, Bureau of Ocean Energy Management. INTERNATIONAL TRADE COMMISSION [Investigation No. 337–TA–1281] Certain Video Security Equipment and Systems, Related Software, Components Thereof, and Products Containing Same; Notice of a Commission Determination To Review in Part a Final Initial Determination Finding a Violation of Section 337; Request for Written Submissions on Issues Under Review and on Remedy, the Public Interest, and Bonding; Extension of Target Date Notice is hereby given that the U.S. International Trade Commission has determined to review in part a final initial determination (‘‘FID’’) issued by the presiding administrative law judge (‘‘ALJ’’), finding a violation of section 337 of the Tariff Act of 1930, as amended, in the above-captioned investigation. The Commission requests briefing from the parties on certain issues under review, as indicated in this notice. The Commission also requests written submissions from the parties, interested government agencies, and interested persons on the issues of remedy, the public interest, and bonding. The Commission has further determined to extend the target date in the abovecaptioned investigation to March 23, 2023. SUMMARY: INTERNATIONAL TRADE COMMISSION [USITC SE–23–005] Sunshine Act Meetings United States International Trade Commission. TIME AND DATE: January 23, 2023 at 11:00 a.m. PLACE: Room 101, 500 E Street SW, Washington, DC 20436, Telephone: (202) 205–2000. STATUS: Open to the public. MATTERS TO BE CONSIDERED: 1. Agendas for future meetings: none. 2. Minutes. 3. Ratification List. 4. Commission vote on Inv. Nos. 731– TA–1578–1579 (Final)(Lemon Juice from Brazil and South Africa). The Commission currently is scheduled to complete and file its determinations and views of the Commission on February 2, 2023. 5. Outstanding action jackets: none. CONTACT PERSON FOR MORE INFORMATION: Tyrell Burch, Management Analyst, 202–205–2595. The Commission is holding the meeting under the Government in the Sunshine Act, 5 U.S.C. 552(b). In accordance with Commission policy, subject matter listed above, not disposed of at the scheduled meeting, may be carried over to the agenda of the following meeting. AGENCY HOLDING THE MEETING: khammond on DSKJM1Z7X2PROD with NOTICES BILLING CODE 7020–02–P U.S. International Trade Commission. ACTION: Notice. BILLING CODE 4340–98–P 17:49 Jan 18, 2023 [FR Doc. 2023–01104 Filed 1–17–23; 4:15 pm] AGENCY: [FR Doc. 2023–00842 Filed 1–18–23; 8:45 am] VerDate Sep<11>2014 By order of the Commission. Issued: January 17, 2023. Katherine Hiner, Acting Secretary to the Commission. Jkt 259001 FOR FURTHER INFORMATION CONTACT: Lynde Herzbach, Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone (202) 205–3228. Copies of non-confidential documents filed in connection with this investigation may be viewed on the Commission’s electronic docket (EDIS) at https://edis.usitc.gov. For help accessing EDIS, please email EDIS3Help@usitc.gov. General information concerning the Commission may also be obtained by accessing its internet server at https://www.usitc.gov. Hearing-impaired persons are advised that information on this matter can be obtained by contacting the PO 00000 Frm 00060 Fmt 4703 Sfmt 4703 3435 Commission’s TDD terminal on (202) 205–1810. SUPPLEMENTARY INFORMATION: On September 14, 2021, the Commission instituted this investigation under section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337 (‘‘section 337’’), based on a complaint filed by Motorola Solutions, Inc. of Chicago, Illinois (‘‘Motorola Solutions’’); Avigilon Corporation of British Columbia, Canada; Avigilon Fortress Corporation of British Columbia, Canada; Avigilon Patent Holding 1 Corporation of British Columbia, Canada (‘‘Avigilon Patent Holding’’); and Avigilon Technologies Corporation of British Columbia, Canada (collectively, ‘‘Complainants’’). See 86 FR 51182–83 (Sept. 14, 2021). The complaint alleges a violation of section 337 based upon the importation into the United States, sale for importation, or sale after importation into the United States of certain video security equipment and systems, related software, components thereof, and products containing same by reason of infringement of certain claims of U.S. Patent Nos. 7,868,912 (‘‘the ’912 patent’’); 10,726,312 (‘‘the ’312 patent’’); and 8,508,607 (‘‘the ’607 patent’’) (collectively, ‘‘the Asserted Patents’’). Id. The complaint further alleges that a domestic industry exists. Id. The notice of investigation (‘‘NOI’’) names Verkada Inc. of San Mateo, California as the only respondent. Id. The complaint and NOI were previously amended to reflect the transfer of all right, title, and interest in: (1) the ’312 patent from Avigilon Corporation to Motorola Solutions; (2) the ’912 patent from Avigilon Fortress Corporation to Motorola Solutions; and (3) the ’607 patent from Avigilon Patent Holding to Motorola Solutions. Order No. 7 (Dec. 28, 2021), unreviewed by 87 FR 4658–59 (Jan. 28, 2022). The complaint and NOI were further amended to add a new licensee, Avigilon USA Corporation of Dallas, Texas, as an additional complainant. Id. The Commission previously terminated the investigation as to claims 4 and 10–12 of the ’312 patent based on Complainants’ partial withdrawal of the complaint. Order No. 58 (June 14, 2022), unreviewed by Comm’n Notice (June 30, 2022). The Commission also previously terminated the investigation as to claims 6, 15, 25, and 26 of the ’607 patent based on Complainants’ partial withdrawal of the complaint. Order No. 59 (July 13, 2022), unreviewed by Comm’n Notice (Aug. 4, 2022). On October 24, 2022, the presiding ALJ issued the FID, finding that a E:\FR\FM\19JAN1.SGM 19JAN1

Agencies

[Federal Register Volume 88, Number 12 (Thursday, January 19, 2023)]
[Notices]
[Pages 3433-3435]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-00842]


-----------------------------------------------------------------------

DEPARTMENT OF THE INTERIOR

Bureau of Ocean Energy Management

[Docket No. BOEM-2023-0008]


Modifications to the Bid Adequacy Procedures for Offshore Oil and 
Gas Lease Sales

AGENCY: Bureau of Ocean Energy Management, Interior.

ACTION: Notification of procedural changes; request for comments.

-----------------------------------------------------------------------

SUMMARY: The Bureau of Ocean Energy Management (BOEM) announces and 
invites comments on its intention to change its bid adequacy procedures 
(BAPs), which ensure the United States receives fair market value (FMV) 
from Outer Continental Shelf (OCS) oil and gas lease sales. BOEM 
proposes to discontinue the use of both tract classification and 
delayed valuation methodology. Instead, BOEM proposes to use a 
statistical lower bound confidence interval (LBCI), at the 90 percent 
confidence level, as a measure of bid adequacy. BOEM is also proposing 
other, minor adjustments to its BAPs to clarify and streamline its 
processes.

DATES: BOEM must receive your comments by March 6, 2023.

ADDRESSES: You may submit comments by either of the following methods:
     Regulations.gov web portal: Navigate to https://www.regulations.gov and under the ``Search'' tab, in the space 
provided, type in Docket ID: BOEM-2023-0008. Select the document that 
you would like to comment on and click on the ``Comment'' button to 
submit your comments. You may also view other comments already posted 
to the docket.
     In written form by mail or other delivery services: Send 
comments in an envelope labeled ``Comments for the proposed revised 
BAP'' and addressed to Mr. Matt Frye, Chief, Resource Evaluation 
Division, Office of Strategic Resources, Bureau of Ocean Energy 
Management, 45600 Woodland Road, Sterling, VA 20166-9216.
     For additional information on sending comments, see the 
``Public Participation and Availability of Comments'' heading under the 
SUPPLEMENTARY INFORMATION section of this notice.
    The proposed, revised procedures are available for review at: 
https://www.boem.gov/oil-gas-energy/energy-economics/lease-sales-and-fair-market-value. A copy of BOEM's current BAP entitled ``Summary of 
Procedures for Determining Bid Adequacy at Offshore Oil and Gas Lease 
Sales, Effective March 2016 with Central Gulf of Mexico Sale 241 and 
Eastern Gulf of Mexico Sale 226'' is available on BOEM's website at: 
https://www.boem.gov/sites/default/files/oil-and-gas-energy-program/Energy-Economics/Fair-Market-Value/Summary-of-Procedures-For-Determining-Bid-Adequacy.pdf.

FOR FURTHER INFORMATION CONTACT: Mr. Matt Frye, Chief, Resource 
Evaluation Division, Office of Strategic Resources, at (703) 787-1514 
or email at [email protected].

SUPPLEMENTARY INFORMATION:

Background and Summary of Changes

    In administering the offshore oil and gas leasing program under the 
OCS Lands Act, the Secretary of the Interior is required to ensure that 
the Federal Government receives FMV for the lease rights granted and 
the rights conveyed. To carry out this responsibility since 1983, BOEM 
(and its predecessor agency) has used a two-phase, post-sale bid 
evaluation process to assess the adequacy of bids received in Federal 
offshore oil and gas lease sales. Under its BAP, BOEM reviews all high 
bids and evaluates all tracts to ensure that FMV is received for each 
OCS lease issued. The BAP relies on both evidence of market competition 
and in-house estimates of tract value.
    Currently, in phase 1 of the BAP, BOEM reviews all bids for legal 
sufficiency and anomalies to establish the set of bids to be evaluated 
for each tract. All tracts receiving legal bids are

[[Page 3434]]

then classified \1\ as ``drainage or development'' (DD), ``confirmed or 
wildcat'' (CW), or ``unknown'' if undetermined at this phase. All CW 
tracts are tested for geologic and economic viability and high bids are 
accepted for tracts that BOEM determines to be nonviable. A nonviable 
tract is considered by BOEM not to have the potential capability of 
being explored, developed, and produced profitably under economic 
conditions present at the time of the lease sale. The remaining CW 
tracts are then reviewed under phase 2. All DD and unknown tracts begin 
at phase 2.
---------------------------------------------------------------------------

    \1\ For definitions of BOEM tract classification, please refer 
to current bid adequacy procedures published on BOEM website: 
https://www.boem.gov/sites/default/files/oil-and-gas-energy-program/Energy-Economics/Fair-Market-Value/Summary-of-Procedures-For-Determining-Bid-Adequacy.pdf.
---------------------------------------------------------------------------

    In phase 2 of the BAP, BOEM may use its probabilistic discounted 
cash flow simulation model to generate up to four measures of bid 
adequacy to help determine if a tract's high bid may be accepted. These 
four measures are: mean range of values (MROV), delayed mean Range of 
values (DMROV), adjusted delayed values (ADV), and revised arithmetic 
measure (RAM). The MROV is a single value that represents the maximum 
cash payment that a bidder can offer for acquiring the tract's drilling 
and development property rights and still expect to make a normal rate 
of return on their investment. The DMROV is intended to allow a 
determination of whether, in cases where the high bid is below the 
MROV, leasing revenues consisting of the cash bonus plus royalties or 
profit shares would be greater if the high bid were to be accepted, 
rather than rejected and the tract reoffered in the next available 
sale. BOEM calculates the tract's MROV and DMROV and designates the 
lesser of these two measures as the ADV. The RAM represents the average 
of the highest qualified bid, all other qualified bids that are at 
least 25 percent of the highest qualified bid, and the MROV. If the 
high bid is equal to or greater than any of these measures, the 
Regional Director may accept the highest qualified bid as 
representative of FMV for the tract.
    In October 2019, the Government Accountability Office (GAO) 
published a report entitled ``Offshore Oil and Gas: Opportunities Exist 
to Better Ensure a Fair Return on Federal Resources'' (GAO-19-531). In 
its report, GAO provided four recommendations to BOEM, including a 
recommendation to have a third party ``examine the extent to which the 
bureau's use of delayed valuations assures the receipt of fair market 
value, and make changes--such as terminating the use of delayed 
valuations or amending its model's assumptions--as appropriate.'' In 
response, BOEM committed to examine its use of delayed valuation and to 
identify any appropriate changes.
    After a 2-year comprehensive technical review of the delayed 
valuation methodology, BOEM intends to replace the delayed valuation 
methodology with a statistical lower bound confidence interval (LBCI) 
at a 90 percent confidence level as a decision criterion for accepting 
or rejecting qualified high bids on tracts offered in OCS oil and gas 
lease sales. Following extensive testing of the alternative approaches 
using both historical and current lease sale tract data and existing 
BOEM cash flow simulation models, BOEM determined that the LBCI 
approach would be the most appropriate substitute for the delayed 
valuation methodology. The LBCI is a statistical concept that captures 
the lower bound of a range of values encompassing the true unknown mean 
of the risked present worth \2\ of the resources at the time of the 
lease sale. The LBCI incorporates the uncertainty of parameters unique 
to the valuation of each OCS oil and gas lease sale tract. These 
parameters may include, but are not limited to, subsurface 
characterization of reservoir properties, cost and timing of the 
development, and projected revenues. Unlike the delayed valuation 
methodology, the LBCI approach would not require that BOEM estimate the 
time delay period between the current OCS oil and gas lease sale and 
the projected next lease sale. As such, BOEM finds the LBCI to be a 
better approach going forward.
---------------------------------------------------------------------------

    \2\ Risked present worth is a net present value of the potential 
oil and gas resources contained in a tract adjusted for the 
geological risks of not finding hydrocarbons and the uncertainties 
associated with the development and economic parameters of that 
tract at the time of the lease sale.
---------------------------------------------------------------------------

    Additionally, BOEM proposes to discontinue the use of tract 
classification in the BAP to streamline the bid review process. BOEM 
has found that this classification process has had minimal impact on 
its procedural analysis of FMV; since 1997, only approximately 1 
percent of tracts have been classified as DD, and the remaining tracts 
have been classified as CW. The classification process has therefore 
been of limited utility to BOEM in the existing BAP. Therefore, in the 
proposed revised BAP, the formal tract classification process would be 
removed and all tracts receiving legal bids in phase 1 would be passed 
on to phase 2 unless the tract is determined to be nonviable. In phase 
2, BOEM may use its probabilistic discounted cash flow simulation model 
to generate up to two measures of bid adequacy: LBCI and RAM. A tract's 
highest qualified bid would then be compared to the applicable measures 
of bid adequacy. If that bid is equal to or greater than either of 
these measures, the Regional Director may accept the highest qualified 
bid as representative of FMV for the tract.
    BOEM is also proposing other minor revisions to its procedures, for 
example, the removal of the ``Definitions'' section to streamline the 
document and ensure clarity.
    BOEM intends to assess bids using the revised BAP, once finalized, 
during lease sales included in the next National OCS Oil and Gas 
Leasing Program.

Public Participation and Availability of Comments

    All comments will be made publicly available in the docket. BOEM 
will consider all comments before finalizing the revised BAP.
    All interested parties can submit written comments to BOEM. BOEM 
will protect privileged or proprietary information that you submit in 
accordance with the Freedom of Information Act (FOIA) and OCS Lands 
Act. To avoid inadvertent release of such information, interested 
parties should mark all documents and every page containing such 
information with ``Confidential--Contains Proprietary Information.'' To 
the extent a document contains a mix of proprietary and nonproprietary 
information, interested parties should clearly mark the portions of the 
document that are proprietary and those that are not. Exemption 4 of 
FOIA applies to trade secrets and commercial or financial information 
that you submit that is privileged or confidential.
    Please be aware that BOEM's practice is to make all other comments, 
including the names and addresses of individuals, available for public 
inspection. Before including your address, phone number, email address, 
or other personal identifying information in your comment, please be 
advised that your entire comment, including your personal identifying 
information, may be made publicly available at any time. In order for 
BOEM to consider withholding from disclosure your personal identifying 
information, you must identify, in a cover letter, any information 
contained in the submittal of your comments that, if released, would 
constitute a clearly unwarranted invasion of your personal privacy. You 
must also briefly describe any possible harmful consequences of the 
disclosure,

[[Page 3435]]

such as embarrassment, injury, or other harm.
    Even if BOEM withholds your information in the context of its BAP 
modification process, your submission is subject to FOIA, and if your 
submission is requested under FOIA, your information will be withheld 
only if a determination is made that one of FOIA's exemptions to 
disclosure applies. Such a determination will be made in accordance 
with the Department's FOIA regulations and applicable law.
    BOEM will make available for public inspection, in their entirety, 
all comments submitted by organizations and businesses, or by 
individuals identifying themselves as representatives of organizations 
or businesses.
    Authority: 43 U.S.C. 1331 et seq. (Outer Continental Shelf Lands 
Act, as amended) and 30 CFR part 556.

Amanda Lefton,
Director, Bureau of Ocean Energy Management.
[FR Doc. 2023-00842 Filed 1-18-23; 8:45 am]
BILLING CODE 4340-98-P
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.