[Federal Register: January 2, 2008 (Volume 73, Number 1)]
[Notices]
[Page 209-213]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02ja08-82]
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DEPARTMENT OF THE INTERIOR
Minerals Management Service (MMS)
Outer Continental Shelf (OCS) Chukchi Sea Alaska, Oil and Gas
Lease Sale 193
AGENCY: Minerals Management Service, Interior.
ACTION: Final Notice of Sale (FNOS), OCS Oil and Gas Lease Sale 193,
Chukchi Sea.
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SUMMARY: The MMS will hold OCS Oil and Gas Lease Sale 193 on February
6, 2008, in accordance with provisions of the OCS Lands Act (43 U.S.C.
1331-1356, as amended), the implementing regulations (30 CFR 256), and
the OCS Oil and Gas Leasing Program 2007-2012.
DATES: Lease Sale 193 is scheduled to be held on February 6, 2008, 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 referenced in this document are local Anchorage, Alaska, times,
unless otherwise specified.
ADDRESSES: A package containing the FNOS and several supporting and
essential documents referenced herein is available from: Alaska OCS
Region, 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 page at http://www.mms.gov/alaska.
Bid Submission Deadline: Bidders will be required to submit sealed
bids to 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, February 5, 2008. 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 193.
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, February 5, 2008. Should an unexpected
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event such as an earthquake or travel restrictions be significantly
disruptive to bid submission, the Alaska OCS Region 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.
Area Offered for Lease: The MMS is offering for lease all whole and
partial blocks listed in the document ``Blocks Available for Leasing in
OCS Oil and Gas Lease Sale 193'' included in the FNOS 193 package. All
of these blocks are shown on OCS Official Protraction Diagrams, and in
some cases on Supplemental Official OCS Block Diagrams. The following
OCS Official Protraction Diagrams pertain to the Sale 193 area and are
available at http://www.mms.gov/ld/alaska.htm.
NS 02-08, Unnamed, revised December 31, 1994
NS 03-07, Unnamed, revised December 31, 1994
NS 03-08, Unnamed, revised December 31, 1994
NS 04-07, Unnamed, revised December 31, 1994
NS 04-08, Unnamed, revised December 31, 1994
NR 02-02, Tison, revised December 31, 1994
NR 03-01, Karo, revised December 31, 1994
NR 03-02, Posey, revised December 31, 1994
NR 04-01, Hanna Shoal, revised September 30, 1997
NR 04-02, Barrow, revised September 30, 1997
NR 02-04, Studds, revised December 31, 1994
NR 03-03, Colbert, revised December 31, 1994
NR 03-04, Solivik Island, revised September 30, 1997
NR 04-03, Wainwright, revised September 30, 1997
NR 02-06, Chukchi Sea, revised December 31, 1994
NR 03-05, Point Lay West, revised September 30, 1997
A listing of blocks included in the sale is available at the MMS
office listed above. The locator map (available at http://www.mms.gov/alaska
) may assist you in locating a particular block, but it should
not be used for the official description of blocks available for lease.
The OCS Official Protraction Diagrams constitute the official
descriptions of the areas offered.
Note that block numbers may repeat between OCS Official Protraction
Diagrams (OPD's). To uniquely describe a lease tract, you must
reference both the OPD number and name and the block number.
Statutes and Regulations: Each lease issued in the 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: The following lease terms and condition
apply:
Initial Period: 10 years.
Minimum Bonus Bid Amounts: $25.00 per hectare, or a fraction
thereof, for all blocks. Refer to the Final Notice of Sale, Chukchi Sea
Sale 193 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 or fraction thereof, applies and is paid at the end of
each lease year until the start of royalty-bearing production.
Minimum Royalty Rates: After the start of royalty-bearing
production and notwithstanding any royalty suspension which may apply,
the Lessee shall pay the Lessor a minimum royalty of $13 per hectare,
or fraction thereof, to be paid at the expiration of each lease year
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
------------------------------------------------------------------------
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Terms (values per hectare or fraction thereof)
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Royalty Rate............................................ 12\1/2\% fixed
Minimum Bonus Bid....................................... $25.00
Minimum Royalty Rate.................................... 13.00
Rental Rates:
Year 1.............................................. 2.50
Year 2.............................................. 3.75
Year 3.............................................. 5.00
Year 4.............................................. 6.25
Year 5.............................................. 7.50
Year 6.............................................. 10.00
Year 7.............................................. 12.00
Year 8.............................................. 15.00
Year 9.............................................. 17.00
Year 10............................................. 20.00
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Royalty Suspension: Royalty suspension, prorated by lease acreage
and subject to price thresholds, will apply to all blocks. In
accordance with applicable regulations at 30 CFR 260, the following
royalty suspension provisions will apply to leases issued as a result
of Chukchi Sea Oil and Gas Lease Sale 193. In addition to these Royalty
Suspension Provisions, please 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 Chukchi Sea, depending on surface area, will
receive a royalty suspension volume (RSV) as follows:
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RSV (million
Lease size (hectares) barrels of oil
equivalent)
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Less than 771........................................... 10
771 to less than 1,541.................................. 20
1,541 or more........................................... 30
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2. Natural gas must be measured in accordance with 30 CFR 203.73.
3. Each lessee must pay royalty on production that might otherwise
receive royalty relief (in 30 CFR 260) for any calendar year during
which the actual New York Mercantile Exchange (NYMEX) annual price for
the light sweet crude oil or natural gas exceeds the threshold price
($39 per barrel of oil or $6.50 per million British thermal units (Btu)
of gas, adjusted for inflation) in that year. Such production will be
deducted from the remaining RSV. The actual NYMEX annual price for the
commodity is defined as the arithmetic average of the daily closing
prices for the ``nearby delivery month'' on the NYMEX in a calendar
year. The actual NYMEX annual price for the commodity is calculated by
averaging the commodity daily closing prices for each month in the
year, and then averaging the 12 monthly averages.
(a) The threshold price in any year, say year t, is determined by
inflating the base year 2004 price of $39 per barrel of oil or $6.50
per million Btu of gas. This base year price is modified by the
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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 threshold
price for year t. For example, if the deflator indicates that inflation
is 1.6 percent in 2005, 2.1 percent in 2006, 2.5 percent in 2007, and
2.5 percent for 2008, then the threshold price in calendar year 2008
would become $42.50 per barrel of oil and $7.08 per million Btu of gas.
Therefore, royalty on oil production in calendar year 2008 would be due
if the 2008 actual NYMEX oil price, as calculated above, exceeds $42.50
per barrel. The royalty on gas production in calendar year 2008 would
be due if the 2008 actual NYMEX gas price, as calculated above, exceeds
$7.08 per million Btu.
(b) Royalties on production, when the actual NYMEX annual price of
the commodity exceeds the threshold 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 the
commodity exceeds the threshold price in any calendar year, royalties
on production must be provisionally paid in the following calendar
year. (See 30 CFR 260.122(c)).
4. In the case of a Sale 193 lease that is part of an approved unit
agreement, allocated production from the unit can only apply 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.
5. 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 the commodity
exceeds the threshold price for that year.
6. The MMS will provide notice when the actual NYMEX annual price
of the commodity is above the threshold price. Information on actual
and threshold prices can be found at the MMS Web site (http://www.mms.gov/econ
).
Stipulations and Information to Lessees: The documents entitled
``Final Lease Stipulations'' and ``Final Information to Lessees'' for
Oil and Gas Lease Sale 193 contain the text of the Final Stipulations
and the Information to Lessees clauses. These documents are included in
the FNOS 193 package.
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 electronic funds transfer (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.
Debarment and Suspension (Nonprocurement): In accordance with
regulations pursuant to 2 CFR, part 180, and 2 CFR, part 1400, the
lessee shall comply with the U.S. Department of the Interior's
nonprocurement debarment and suspension requirements and agree 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 to enter into 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 2 CFR 180.335, unless the lessee has provided a
statement disclosing information as described in 2 CFR 180.335, and the
MMS receives an exception from the U.S. Department of the Interior as
described in 2 CFR 180.135 and 180.400.
Method of Bidding: 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 193, not to be opened until 9 a.m., Wednesday,
February 6, 2008.'' 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 FNOS 193 package.
Restricted Joint Bidders: The MMS published a list of restricted
joint bidders, which applies to this sale, in the Federal Register at
72 FR 64088 on November 14, 2007. 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, i.e. 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 FNOS 193 package).
Bonus Bid Deposit: Each bidder submitting an apparent high bid must
submit a bonus bid deposit to the MMS equal to one-fifth of the bonus
bid amount for each such bid. Under the authority granted by 30 CFR
256.46(b), MMS will require bidders to use EFT procedures for payment
of the one-fifth bonus bid deposits for Sale 193. Payment of the
deposit will be due by 1:00 p.m. Eastern Time the day following bid
reading. Detailed bid deposit procedures for Sale 193 will be found
within the ``Instructions for Making EFT Bonus Payments'' document on
the MMS Web site.
Note: Certain bid submitters [i.e., those that are not currently
an OCS mineral lease record title holder or designated operator or
those that have ever defaulted on a one-fifth bonus payment (EFT or
otherwise)] are 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
used: (1) Provide a third-party guarantee; (2) Amend bond coverage;
(3) Provide a letter of credit; or (4) Provide a lump sum payment in
advance via EFT. The EFT instructions specify the requirements for
each option.
Payment of the 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.
Withdrawal of Blocks: The United States reserves the right to
withdraw any block from this sale prior to issuance of 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
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contained in the associated FNOS package for Sale 193 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 that does not conform to the requirements of this
Notice; the OCS Lands Act, as amended; or 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 3 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: 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 Nos. 11375 (October 13, 1967),
12086 (October 5, 1978), and 13279 (December 12, 2002). In any event,
prior to the execution of any lease contract, both forms are required
to be on file in the Alaska OCS Region.
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 OCS Lease Sale 193,
Chukchi Sea, scheduled to be held on February 6, 2008. In Sale 193, 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. 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.
Geophysical Data and Information Statement: Pursuant to 30 CFR
251.12, MMS has a right to access geophysical data and information, as
well as reprocessed versions of the data, collected under a permit in
the OCS. Every bidder submitting a bid on a block in Sale 193, or
participating as a joint bidder in such a bid, must submit a
Geophysical Data and Information Statement (GDIS) identifying any
processed or reprocessed pre- and post-stack geophysical data and
information used as part of the decision to bid or participate in a bid
on the block. The GDIS should clearly identify the survey type (2-D or
3-D), survey extent (i.e., number of line miles for 2D or number of
blocks for 3D), and imaging type (pre-stack, post-stack and migration
(time and/or depth) algorithm) of the data and information. The
statement must also include the name and phone number of a contact
person and an alternate, who are both knowledgeable about the data
listed, the owner or controller of the reprocessed data or information,
the survey from which the data were reprocessed and the owner/
controller of the original data set, the date of reprocessing and
whether the data were processed in-house or by a contractor. In the
event such data and information include multiple data sets processed
from the same survey using different velocity models or different
processing parameters, you should identify only the highest quality
data set used for bid preparation. The MMS reserves the right to query
about alternate data sets and to quality check and compare the listed
and alternative data sets to determine which data set most closely
meets the needs of the fair-market-value determination process.
The statement must also identify each block upon which a bidder
participated in a bid but for which it does not possess or control such
data and information.
In the event your company supplies any type of data to the MMS, in
order to get reimbursed, your company must be registered with the
Central Contractor Registration (CCR) at http://www.ccr.gov. This is a
requirement that was implemented on October 1, 2003, and requires all
entities doing business with the Government to complete a business
profile in the CCR and update it annually. Payments are made
electronically based on the information contained in the CCR.
Therefore, if your company is not actively registered in the CCR, MMS
will not be able to reimburse or pay your company for any data
supplied.
Protecting and disclosing data and information listed on the GDIS
to the public is governed by 30 CFR 251.14. Except as specified in that
section or in 30 CFR 250 and 252, if the Regional Director determines
any data or information are exempt from public disclosure under 30 CFR
251.14(a), MMS will not provide the data and information to any State
or to the executive of any local government or to the public unless the
bidder and all third parties agree to the disclosure. For this reason,
the bidder is instructed to submit the GDIS in a separate, sealed
envelope at the time of bid submission. An example of the GDIS and a
sample of the Geophysical Information envelope are available at the MMS
Alaska OCS Region's Web page at http://www.mms.gov/alaska.
Dated: December 20, 2007.
Randall B. Luthi,
Director, Minerals Management Service.
BILLING CODE 4310-MR-P
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[GRAPHIC] [TIFF OMITTED] TN02JA08.013
[FR Doc. 07-6226 Filed 12-31-07; 8:45 am]
BILLING CODE 4310-MR-P