[Federal Register Volume 61, Number 160 (Friday, August 16, 1996)]
[Notices]
[Pages 42714-42720]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-20861]



[[Page 42713]]


_______________________________________________________________________

Part III





Department of the Interior





_______________________________________________________________________



Minerals Management Service



Outer Continental Shelf, Western Gulf of Mexico, Oil and Gas Lease Sale 
161; Notice

  Federal Register / Vol. 61, No. 160 / Friday, August 16, 1996 / 
Notices  

[[Page 42714]]



DEPARTMENT OF THE INTERIOR

Minerals Management Service


Outer Continental Shelf, Western Gulf of Mexico, Oil and Gas 
Lease Sale 161

AGENCY: Minerals Management Service, Interior.

ACTION: Final notice.

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

    1. Authority. This Notice is published pursuant to the Outer 
Continental Shelf (OCS) Lands Act (43 U.S.C. 1331-1356, as amended) and 
the regulations issued thereunder (30 CFR Part 256).
    2. (a) Filing of Bids. Sealed bids will be received by the Regional 
Director (RD), Gulf of Mexico Region, Minerals Management Service 
(MMS), 1201 Elmwood Park Boulevard, New Orleans, Louisiana 70123-2394. 
Bids may be delivered in person to that address during normal business 
hours (8 a.m. to 4 p.m., Central Standard Time (c.s.t.)) until the Bid 
Submission Deadline at 10 a.m. Tuesday, September 24, 1996. 
Hereinafter, all times cited in this Notice refer to c.s.t. unless 
otherwise stated. Bids will not be accepted the day of Bid Opening, 
Wednesday, September 25, 1996. Bids received by the RD later than the 
time and date specified above will be returned unopened to the bidders. 
Bids may not be modified or withdrawn unless written modification or 
written withdrawal request is received by the RD prior to 10 a.m. 
Tuesday, September 24, 1996. Bid Opening Time will be 9 a.m., 
Wednesday, September 25, 1996, at the Royal Sonesta Hotel, 300 Bourbon 
Street, New Orleans, Louisiana. All bids must be submitted and will be 
considered in accordance with applicable regulations, including 30 CFR 
Part 256. The list of restricted joint bidders which applies to this 
sale appeared in the Federal Register at 61 FR 15968, published on 
April 10, 1996.
    (b) In the event a natural disaster (such as widespread flooding) 
or other occurrence causes the MMS Gulf of Mexico Regional Office to be 
closed on Tuesday, September 24, 1996, bids will be accepted until 9 
a.m. Wednesday, September 25, 1996, at the site of bid opening 
specified above. Under these conditions, bids may be modified or 
withdrawn upon written notification up until 9 a.m. Wednesday, 
September 25, 1996. Closure of the office may be determined by calling 
(504) 736-0557 and hearing a recorded message to that effect.
    3. Method of Bidding.
    (a) Submission of Bids. A separate signed bid in a sealed envelope 
labeled ``Sealed Bid for Oil and Gas Lease Sale 161, not to be opened 
until 9 a.m., c.s.t., Wednesday, September 25, 1996'' must be submitted 
for each tract bid upon. The sealed envelope and the bid should contain 
the following information: the company name, Gulf of Mexico Company 
Number (GOM Company Number), area number and/or name (abbreviations 
acceptable), and the block number of the tract bid upon. In addition, 
the total amount bid to be considered by MMS must be in whole dollar 
amount. Any cent amount above the whole dollar will be ignored by MMS.
    Bidders must submit with each bid \1/5\ of the cash bonus, in cash 
or by cashier's check, bank draft, or certified check, payable to the 
order of the U.S. Department of the Interior--Minerals Management 
Service. For identification purposes, the following information must 
appear on the check or draft: company name, GOM Company Number, and the 
area and block bid on (abbreviation acceptable). No bid for less than 
all of the unleased portion(s) of a block will be considered.
    All documents must be executed in conformance with signatory 
authorizations on file in the MMS Gulf of Mexico Regional Office. 
Partnerships also need to submit or have on file a list of signatories 
authorized to bind the partnership. 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. Other documents may be required of bidders under 30 CFR 
256.46. Bidders are warned against violation of 18 U.S.C. 1860 
prohibiting unlawful combination or intimidation of bidders.
    (b) Submission of Statement(s) Regarding Certain Geophysical Data. 
Each company submitting a bid, or participating as a joint bidder in 
such a bid, shall submit, prior to the Bid Submission Deadline 
specified in paragraph 2 of this Notice, a statement or statements 
identifying any processed or reprocessed pre and post stack depth 
migrated geophysical data in their possession or control pertaining to 
each and every block on which they are participating as a bidder. The 
existence, extent, type of such data, and identification of specific 
lines or 3D surveys must be clearly stated. In addition, the statement 
shall certify that no such data are in their possession for any other 
blocks on which they participate as a bidder. The statement shall be 
submitted in an envelope separate from those containing bids and shall 
be clearly marked; an example of a preferred format for the statement 
and the envelope is included in the document titled ``Trial Procedures 
for Access to Certain Geophysical Data in the Gulf of Mexico'' (revised 
January 19, 1996). Only one statement per bidder is required for each 
sale, but more than one may be submitted if desired, provided that all 
tracts bid on by that company are covered in the one or more 
statements.
    Paragraph 14(j), Information to Lessees, contains additional 
information pertaining to geophysical data.
    4. Bidding, Yearly Rental, and Royalty Systems. The following 
bidding, yearly rental, and royalty systems apply to this sale:
    (a) Bidding Systems. All bids submitted at this sale must provide 
for a cash bonus in the amount of $25.00 or more per acre or fraction 
thereof.
    (b) Yearly Rental. All leases awarded on tracts in water depths of 
200 meters and greater as depicted on the map ``Royalty Suspension 
Areas For The Western Gulf Of Mexico'' provided with this Notice (i.e., 
tracts in any of the three royalty suspension areas) will provide for a 
yearly rental payment of $7.50 per acre or fraction thereof until 
initial production is obtained.
    All leases awarded on other tracts (i.e., those in water depths of 
less than 200 meters) will provide for a yearly rental payment of $5.00 
per acre or fraction thereof until initial production is obtained.
    (c) Royalty Systems. After initial production is obtained, leases 
will provide for a minimum royalty of the amount per acre or fraction 
thereof as specified as the yearly rental in paragraph 4(b) above, 
except during periods of royalty suspension as discussed in paragraph 
4(c)(3) of this Notice. The following royalty systems will be used in 
this sale:
    (1) Leases with a 12\1/2\-Percent Royalty. This royalty rate 
applies to tracts in water depths of 400 meters or greater; this area 
is shown on the Stipulations, Lease Terms, and Bidding Systems Map 
applicable to this Notice (see paragraph 13). Leases issued on the 
tracts offered in this area will have a fixed royalty rate of 12\1/2\ 
percent, except during periods of royalty suspension (see paragraph 
4(c)(3) of this Notice).
    (2) Leases with a 16\2/3\-Percent Royalty. This royalty rate 
applies to tracts in water depths of less than 400 meters (see 
aforementioned map). Leases issued on the tracts offered in this area 
will have a fixed royalty rate of 16\2/3\ percent, except during 
periods of royalty suspension for leases in water depths 200 meters or 
greater (see paragraph 4(c)(3) of this Notice).

[[Page 42715]]

    (3) Royalty Suspension. In accordance with Public Law 104-58, 
signed by the President on November 28, 1995, MMS has developed 
procedures providing for the suspension of royalty payments on 
production from eligible leases issued as a result of this sale. MMS 
will allow only one royalty suspension volume per field regardless of 
the number of eligible leases producing the field. For purposes of this 
paragraph, an eligible lease is one that: is located in the Gulf of 
Mexico in water depths 200 meters or deeper; lies wholly west of 87 
degrees, 30 minutes West longitude; and is offered subject to a royalty 
suspension volume authorized by statute.
    An eligible lease from this sale may receive a royalty suspension 
volume only if it is in a field where no currently active lease 
produced oil or gas (other than test production) before November 28, 
1995. The following applies only to eligible leases in fields meeting 
this condition.
    (i) The royalty suspension volumes are:

--17.5 million barrels of oil equivalent (mmboe) in 200 to 400 meters 
of water;
--52.5 mmboe in 400 to 800 meters of water; and
--87.5 mmboe in 800 meters of water and greater.

    A map titled ``Royalty Suspension Areas For The Western Gulf Of 
Mexico'' (March 1996) depicting blocks in which such suspensions may 
apply is currently available from the MMS Gulf of Mexico Regional 
Office (see paragraph 14(a) of this Notice).
    (ii) When production first occurs from any of the eligible leases 
in a field (not including test production), MMS will determine the 
royalty suspension volume applicable to eligible lease(s) in that 
field. The determination is based on the royalty suspension volumes and 
the map specified in paragraph 4(c)(3)(i) above.
    (iii) If a new field consists of eligible leases in different water 
depth categories, the royalty suspension volume associated with the 
deepest eligible lease applies.
    (iv) If an eligible lease is the only eligible lease in a field, 
royalty is not owed on the production from the lease up to the amount 
of the applicable royalty suspension volume.
    (v) If a field consists of more than one eligible lease, payment of 
royalties on the eligible leases' initial production is suspended until 
their cumulative production equals the field's established royalty 
suspension volume. The royalty suspension volume for each eligible 
lease is equal to each lease's actual production (or production 
allocated under an approved unit agreement) until the field's 
established royalty suspension volume is reached.
    (vi) If an eligible lease is added to a field that has an 
established royalty suspension volume, the field's royalty suspension 
volume will not change even if the added lease is in deeper water. The 
additional lease may receive a royalty suspension volume only to the 
extent of its production before the cumulative production from all 
eligible leases in the field equals the field's previously established 
royalty suspension volume.
    (vii) If MMS reassigns a well on an eligible lease to another 
field, the past production from that well will count toward the royalty 
suspension volume, if any, specified for the new field to which it is 
assigned. The past production will not be counted toward the suspension 
volume, if any, from the first field.
    (viii) An eligible lease may receive a royalty suspension volume 
only if the entire lease is west of 87 degrees, 30 minutes West 
longitude. A field that lies on both sides of this meridian will 
receive a royalty suspension volume only for those eligible leases 
lying entirely west of the meridian.
    (ix) An eligible lease may obtain more than one royalty suspension 
volume. If a new field is discovered on an eligible lease that already 
benefits from the royalty suspension volume for another field, 
production from that new field receives a separate royalty suspension.
    (x) A lessee must measure natural gas production subject to the 
royalty suspension volume as follows: 5.62 thousand cubic feet of 
natural gas equals one barrel of oil equivalent, as measured fully 
saturated at 15.025 psi, 60 degrees F.
    (xi) In any year during which the arithmetic average of the closing 
prices on the New York Mercantile Exchange for light sweet crude oil 
exceeds $28.00 per barrel, royalties on the production of oil must be 
paid at the lease stipulated royalty rate (see paragraphs 4(c) (1) and 
(2) above), and production during such years counts toward the royalty 
suspension volume.
    In any year during which the arithmetic average of the closing 
prices on the New York Mercantile Exchange for natural gas exceeds 
$3.50 per million British thermal units, royalties on the production of 
natural gas must be paid at the lease stipulated royalty rate (see 
paragraphs 4(c) (1) and (2) above), and production during such years 
counts toward the royalty suspension volume.
    These prices for oil and natural gas are as of the end of 1994 and 
must be adjusted for subsequent years by the percentage by which the 
implicit price deflator for the gross domestic product changed during 
the preceding calendar year.
    (xii) A royalty suspension will continue until the end of the month 
in which the cumulative production from eligible leases in the field 
reaches the royalty suspension volume for the field.
    Paragraph 14(l), Information to Lessees, contains additional 
information pertaining to royalty suspension matters.
    5. Equal Opportunity. The certification required by 41 CFR 60-
1.7(b) and Executive Order No. 11246 of September 24, 1965, as amended 
by Executive Order No. 11375 of October 13, 1967, on the Compliance 
Report Certification Form, Form MMS-2033 (June 1985), and the 
Affirmative Action Representation Form, Form MMS-2032 (June 1985) must 
be on file in the MMS Gulf of Mexico Regional Office prior to lease 
award (see paragraph 14(e)).
    6. Bid Opening. Bid opening will begin at the bid opening time 
stated in paragraph 2. The opening of the bids is for the sole purpose 
of publicly announcing bids received, and no bids will be accepted or 
rejected at that time.
    7. Deposit of Payment. Any cash, cashier's checks, certified 
checks, or bank drafts submitted with a bid may be deposited by the 
Government in an interest-bearing account in the U.S. Treasury during 
the period the bids are being considered. Such a deposit does not 
constitute and shall not be construed as acceptance of any bid on 
behalf of the United States.
    8. Withdrawal of Tracts. The United States reserves the right to 
withdraw any tract from this sale prior to issuance of a written 
acceptance of a bid for the tract.
    9. 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 tract will be awarded to any bidder, 
unless:
    (a) the bidder has complied with all requirements of this Notice 
and applicable regulations;
    (b) the bid is the highest legal bid; and
    (c) the amount of the bid has been determined to be adequate by the 
authorized officer.
    No bonus bid will be considered for acceptance unless it provides 
for a cash bonus in the amount of $25.00 or more per acre or fraction 
thereof. 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

[[Page 42716]]

to the person submitting that bid by the RD and not considered for 
acceptance.
    To ensure that the Government receives a fair return for the 
conveyance of lease rights for this sale, the MMS has modified its two-
phased process for bid adequacy determination. The MMS will not 
automatically accept legal high bids on confirmed and wildcat tracts 
which receive three or more bids. Such tracts will be evaluated in 
accordance with the remaining elements of the MMS bid adequacy 
procedures. This modification was described in the Federal Register on 
March 29, 1996 (61 FR 14162). A copy of the revised bid adequacy 
procedures (``Summary of Procedures for Determining Bid Adequacy at 
Offshore Oil and Gas Lease Sales: Effective April 1996, with Sale 
157'') is available from the MMS Gulf of Mexico Regional Office (see 
paragraph 14(a) of this Notice).
    10. Successful Bidders. The following requirements apply to 
successful bidders in this sale:
    (a) Lease Issuance.
    Each person who has submitted a bid accepted by the authorized 
officer will be required to execute copies of the lease (Form MMS-2005 
(March 1986) as amended), pay the balance of the cash bonus bid along 
with the first year's annual rental for each lease issued by electronic 
funds transfer in accordance with the requirements of 30 CFR 218.155, 
and satisfy the bonding requirements of 30 CFR 256, Subpart I, as 
amended.
    Paragraphs 14 (m) and (n), Information to Lessees, contain 
additional information pertaining to this matter.
    (b) Certification Regarding Nonprocurement Debarment, Suspension, 
and Other Responsibility Matters--Primary Covered Transactions.
    Each person involved as a bidder in a successful high bid must have 
on file, in the MMS Gulf of Mexico Regional Office Adjudication Unit, a 
currently valid certification that the person is not excluded from 
participation in primary covered transactions under Federal 
nonprocurement programs and activities. A certification previously 
provided to that office remains currently valid until new or revised 
information applicable to that certification becomes available. In the 
event of new or revised applicable information, a subsequent 
certification is required before lease issuance can occur. Persons 
submitting such certifications should review the requirements of 43 
CFR, Part 12, Subpart D, as amended in the Federal Register of June 26, 
1995, at 60 CFR 33035.
    Copies of the certification form are available from the MMS Gulf of 
Mexico Regional Office Public Information Unit. See Paragraph 14(a) of 
this Notice for directions on how to obtain the forms.
    11. Leasing Maps and Official Protraction Diagrams. Tracts offered 
for lease may be located on the following Leasing Maps or Official 
Protraction Diagrams which may be purchased from the MMS Gulf of Mexico 
Regional Office (see paragraph 14(a)):
    (a) Outer Continental Shelf Leasing Maps--Texas, Nos. 1 through 8. 
This is a set of 16 maps which sells for $18.00.
    (b) Outer Continental Shelf Official Protraction Diagrams. These 
diagrams sell for $2.00 each.

NG 14-3 Corpus Christi (rev. 01/27/76)
NG 14-6 Port Isabel (rev. 01/15/92)
NG 15-1 East Breaks (rev. 01/27/76)
NG 15-2 Garden Banks (rev. 10/19/81)
NG 15-4 Alaminos Canyon (rev. 04/27/89)
NG 15-5 Keathley Canyon (rev. 04/27/89)
NG 15-8 (No Name) (rev. 04/27/89)

    12. Description of the Areas Offered for Bids.
    (a) Acreage of blocks is shown on Leasing Maps and Official 
Protraction Diagrams. Some of these blocks, however, may be partially 
leased, or transected by administrative lines such as the Federal/State 
jurisdictional line. Information on the unleased portions of such 
blocks, including the exact acreage, is included in the following 
document as a part of this Notice and is currently available from the 
MMS Gulf of Mexico Regional Office:
    Western Gulf of Mexico Lease Sale 161--Final Notice. Unleased Split 
Blocks and Unleased Acreage of Blocks with Aliquots and Irregular 
Portions Under Lease.
    (b) Tracts not available for leasing. The areas offered for leasing 
include all those blocks shown on the OCS Leasing Maps and Official 
Protraction Diagrams listed in paragraph 11 (a) and (b), except for 
those blocks or partial blocks already under lease. A list of Western 
Gulf of Mexico tracts currently under lease is included in the Sale 
Notice Package available from the MMS Gulf of Mexico Regional Office 
(see paragraph 14(a)).
    (1) Although they are currently unleased, no bids will be accepted 
on High Island Area, East Addition, South Extension, Blocks A-375 and 
A-398 (at the Flower Garden Banks).
    (2) Although they are currently unleased, no bids will be accepted 
on the following blocks located off Corpus Christi which have been 
identified by the Navy as needed for testing equipment and training 
mine warfare personnel: Mustang Island Area Blocks 793, 799, and 816.
    (3) Although they are currently unleased, no bids will be accepted 
on the following blocks which are currently under appeal: High Island 
Area Block 170, and Galveston Area, South Addition, Block A-125.

    Note: As noted in the Final Notice of Sale for Sale 157, tracts 
or portions of tracts beyond the United States Exclusive Economic 
Zone are offered based upon provisions of the 1982 Law of the Sea 
Convention, and could be subject to a continental shelf delimitation 
agreement between the United States and Mexico.
    A list of these tracts or portions of tracts and a map are 
included in the Sale Notice Package available from the MMS Gulf of 
Mexico Regional Office (see paragraph 14(a)).

    13. Lease Terms and Stipulations.
    (a) Leases resulting from this sale will have initial terms as 
shown on the Stipulations, Lease Terms, and Bidding Systems Map 
applicable to this Notice and will be on Form MMS-2005 (March 1986). 
Copies of the map and lease form are available from the MMS Gulf of 
Mexico Regional Office (see paragraph 14(a)).
    (b) The applicability of the stipulations which follow is as shown 
on the map described in paragraph 13(a) and as supplemented by 
references in this Notice.

Stipulation No. 1--Topographic Features.

    (This stipulation will be included in leases located in the areas 
so indicated in the Biological Stipulation Map Package associated with 
this Notice which is available from the MMS Gulf of Mexico Regional 
Office (see paragraph 14(a).)
    The banks that cause this stipulation to be applied to blocks of 
the Western Gulf are:

------------------------------------------------------------------------
                                            No activity zone defined by 
                Bank name                         Isobath (meters)      
------------------------------------------------------------------------
Shelf Edge Banks                                                        
West Flower Garden Bank \1\ (defined by 1/ 100                          
 4 1/4 1/4 system).                                                     
East Flower Garden Bank \1\ (defined by 1/ 100                          
 4 1/4 1/4 system).                                                     
MacNeil Bank.............................  82                           
29 Fathom Bank...........................  64                           
Rankin Bank..............................  85                           
Geyer Bank...............................  85                           
Elvers Bank..............................  85                           
Bright Bank \2\..........................  85                           
McGrail Bank \2\.........................  85                           
Rezak Bank \2\...........................  85                           
Sidner Bank \2\..........................  85                           
Parker Bank \2\..........................  85                           
Stetson Bank.............................  52                           
Appelbaum Bank...........................  85                           

[[Page 42717]]

                                                                        
           Low Relief Banks \3\                                         
Mysterious Bank..........................  74,76,78,                    
                                           80,84                        
Coffee Lump..............................  Various                      
Blackfish Ridge..........................  70                           
Big Dunn Bar.............................  65                           
Small Dunn Bar...........................  65                           
32 Fathom Bank...........................  52                           
Claypile Bank \4\........................  50                           
          South Texas Banks \5\                                         
Dream Bank...............................  78,82                        
Southern Bank............................  80                           
Hospital Bank............................  70                           
North Hospital Bank......................  68                           
Aransas Bank.............................  70                           
South Baker Bank.........................  70                           
Baker Bank...............................  70                           
------------------------------------------------------------------------
\1\ Flower Garden Banks--In paragraph (c) a ``4-Mile Zone'' rather than 
  a ``1-Mile Zone'' applies.                                            
\2\ Central Gulf of Mexico bank with a portion of its ``1-Mile Zone''   
  and/or ``3-Mile Zone'' in the Western Gulf of Mexico.                 
\3\ Low Relief Banks--Only paragraph (a) applies.                       
\4\ Claypile Bank--Paragraphs (a) and (b) apply. In paragraph (b)       
  monitoring of the effluent to determine the effect on the biota of    
  Claypile Bank shall be required rather than shunting.                 
\5\ South Texas Banks--Only paragraphs (a) and (b) apply.               


    (a) No activity including structures, drilling rigs, pipelines, or 
anchoring will be allowed within the listed isobath (``No Activity 
Zone'' as shown in the aforementioned Biological Stipulation Map 
Package) of the banks as listed above.
    (b) Operations within the area shown as ``1,000-Meter Zone'' in the 
aforementioned Biological Stipulation Map Package shall be restricted 
by shunting all drill cuttings and drilling fluids to the bottom 
through a downpipe that terminates an appropriate distance, but no more 
than 10 meters, from the bottom.
    (c) Operations within the area shown as ``1-Mile Zone'' in the 
aforementioned Biological Stipulation Map Package shall be restricted 
by shunting all drill cuttings and drilling fluids to the bottom 
through a downpipe that terminates an appropriate distance, but no more 
than 10 meters, from the bottom. (Where there is a ``1-Mile Zone'' 
designated, the ``1,000-Meter Zone'' in paragraph (b) is not 
designated.)
    (d) Operations within the area shown as ``3-Mile Zone'' in the 
aforementioned Biological Stipulation Map Package shall be restricted 
by shunting all drill cuttings and drilling fluids from development 
operations to the bottom through a downpipe that terminates an 
appropriate distance, but no more than 10 meters, from the bottom.

Stipulation No. 2--Military Areas

(This stipulation will be included in leases located within the Warning 
Areas as shown on the map described in paragraph 13(a).)

(a) Hold and Save Harmless

    Whether compensation for such damage or injury might be due under a 
theory of strict or absolute liability or otherwise, the lessee assumes 
all risks of damage or injury to persons or property, which occur in, 
on, or above the Outer Continental Shelf (OCS), to any persons or to 
any property of any person or persons who are agents, employees, or 
invitees of the lessee, its agents, independent contractors, or 
subcontractors doing business with the lessee in connection with any 
activities being performed by the lessee in, on, or above the OCS, if 
such injury or damage to such person or property occurs by reason of 
the activities of any agency of the United States Government, its 
contractors or subcontractors, or any of its officers, agents or 
employees, being conducted as a part of, or in connection with, the 
programs and activities of the command headquarters listed in the 
following table.
    Notwithstanding any limitation of the lessee's liability in Section 
14 of the lease, the lessee assumes this risk whether such injury or 
damage is caused in whole or in part by any act or omission, regardless 
of negligence or fault, of the United States, its contractors or 
subcontractors, or any of its officers, agents, or employees. The 
lessee further agrees to indemnify and save harmless the United States 
against all claims for loss, damage, or injury sustained by the lessee, 
or to indemnify and save harmless the United States against all claims 
for loss, damage, or injury sustained by the agents, employees, or 
invitees of the lessee, its agents, or any independent contractors or 
subcontractors doing business with the lessee in connection with the 
programs and activities of the aforementioned military installation, 
whether the same be caused in whole or in part by the negligence or 
fault of the United States, its contractors, or subcontractors, or any 
of its officers, agents, or employees and whether such claims might be 
sustained under a theory of strict or absolute liability or otherwise.

(b) Electromagnetic Emissions

    The lessee agrees to control its own electromagnetic emissions and 
those of its agents, employees, invitees, independent contractors or 
subcontractors emanating from individual designated defense warning 
areas in accordance with requirements specified by the commander of the 
command headquarters listed in the following table to the degree 
necessary to prevent damage to, or unacceptable interference with, 
Department of Defense flight, testing, or operational activities, 
conducted within individual designated warning areas. Necessary 
monitoring control, and coordination with the lessee, its agents, 
employees, invitees, independent contractors or subcontractors, will be 
effected by the commander of the appropriate onshore military 
installation conducting operations in the particular warning area; 
provided, however, that control of such electromagnetic emissions shall 
in no instance prohibit all manner of electromagnetic communication 
during any period of time between a lessee, its agents, employees, 
invitees, independent contractors or subcontractors and onshore 
facilities.

(c) Operational

    The lessee, when operating or causing to be operated on its behalf, 
boat, ship, or aircraft traffic into the individual designated warning 
areas shall enter into an agreement with the commander of the 
individual command headquarters listed in the following list, upon 
utilizing an individual designated warning area prior to commencing 
such traffic. Such an agreement will provide for positive control of 
boats, ships, and aircraft operating into the warning areas at all 
times.

W-228--Chief, Naval Air Training, Naval Air Station, Office No. 206, 
Corpus Christi, Texas 78419-5100, Telephone: (512) 939-3862/2621
W-602--Headquarters ACC/DORR, Detachment 1, Operations Headquarters, 
Air Combat Command, Offutt AFB, Nebraska 68113-5550, Telephone: (402) 
294-2334

Stipulation No. 3--Operations in the Naval Mine Warfare Area

(This stipulation will apply to Mustang Island Area East Addition 
Blocks 732, 733, and 734.)
    (a) The placement, location, and planned periods of operation of 
surface structures on this lease during the exploration stage are 
subject to approval by the Regional Director (RD), Minerals Management 
Service Gulf of Mexico Region, after the review of the operator's 
Exploration Plan (EP). Prior to approval of the EP, the RD will consult 
with the Commander, Mine Warfare Command, in order to determine the 
EP's

[[Page 42718]]

compatibility with scheduled military operations. No permanent 
structures nor debris of any kind shall be allowed in the area covered 
by this lease during exploration operations.
    (b) To the extent possible, sub-seafloor development operations for 
resources subsurface to this area should originate outside the area 
covered by this lease. Any above-seafloor development operations within 
the area covered by this lease must be compatible with scheduled 
military operations as determined by the Commander, Mine Warfare 
Command. The lessee will consult with and coordinate plans for above-
seafloor development activities (including abandonment) with the 
Commander, Mine Warfare Command. The Development Operations 
Coordination Document (DOCD) must contain the locations of any 
permanent structures, fixed platforms, pipelines, or anchors planned to 
be constructed or placed in the area covered by this lease as part of 
such development operations. The DOCD must also contain the written 
comments of the Commander, Mine Warfare Command on the proposed 
activities. Prior to the approval of the DOCD, the RD will consult with 
the Commander in order to determine the DOCD's compatibility with 
scheduled military operations.
    For more information, consultation, and coordination, the lessee 
must contact:

Commander, Mine Warfare Command, 325 Fifth Street, SE., Corpus Christi, 
Texas 78419-5032, Phone: (512) 939-4895

    14. Information to Lessees.
    (a) Supplemental Documents. For copies of the various documents 
identified as available from the MMS Gulf of Mexico Regional Office, 
prospective bidders should contact the Public Information Unit, 
Minerals Management Service, 1201 Elmwood Park Boulevard, New Orleans, 
Louisiana 70123-2394, either in writing or by telephone at (504) 736-
2519 or (800) 200-GULF. For additional information, contact the 
Regional Supervisor for Leasing and Environment at that address or by 
telephone at (504) 736-2759.
    (b) Navigation Safety. Operations on some of the blocks offered for 
lease may be restricted by designation of fairways, precautionary 
zones, anchorages, safety zones, or traffic separation schemes 
established by the U.S. Coast Guard pursuant to the Ports and Waterways 
Safety Act (33 U.S.C. 1221 et seq.), as amended.
    U.S. Army Corps of Engineers (COE) permits are required for 
construction of any artificial islands, installations, and other 
devices permanently or temporarily attached to the seabed located on 
the OCS in accordance with Section 4(e) of the OCS Lands Act, as 
amended.
    For additional information, prospective bidders should contact Lt. 
Commander Ken Parris, Assistant Marine Port Safety Officer, 8th Coast 
Guard District, Hale Boggs Federal Building, New Orleans, Louisiana 
70130, (504) 589-6901. For COE information, prospective bidders should 
contact Mr. Dolan Dunn, Chief Evaluation Section, Regulatory Branch, 
Post Office Box 1229, Galveston, Texas 77553, (409) 766-3935.
    (c) Offshore Pipelines. Bidders are advised that the Department of 
the Interior and the Department of Transportation have entered into a 
Memorandum of Understanding, dated May 6, 1976, concerning the design, 
installation, operation, and maintenance of offshore pipelines. Bidders 
should consult both Departments for regulations applicable to offshore 
pipelines.
    (d) 8-Year Leases. Bidders are advised that any lease issued for a 
term of 8 years will be canceled shortly after the end of the fifth 
year, following notice pursuant to the OCS Lands Act, as amended, if 
within the initial 5-year period of the lease, the drilling of an 
exploratory well has not been initiated; or if initiated, the well has 
not been drilled in conformance with the approved exploration plan 
criteria; or if there is not a suspension of operations in effect. 
Furthermore, a rental payment for the sixth year will be due despite 
the cancellation. Bidders are referred to 30 CFR 256.37 and the MMS 
Gulf of Mexico Regional Office Letter to Lessees and Operators of 
February 13, 1995.
    (e) Affirmative Action. Revision of Department of Labor regulations 
on affirmative action requirements for Government contractors 
(including lessees) has been deferred, pending review of those 
regulations (see Federal Register of August 25, 1981, at 46 FR 42865 
and 42968). Should changes become effective at any time before the 
issuance of leases resulting from this sale, section 18 of the lease 
form (Form MMS-2005, March 1986), would be deleted from leases 
resulting from this sale. In addition, existing stocks of the 
affirmative action forms described in paragraph 5 of this Notice 
contain language that would be superseded by the revised regulations at 
41 CFR 60-1.5(a)(1) and 60-1.7(a)(1). Submission of Form MMS-2032 (June 
1985) and Form MMS-2033 (June 1985) will not invalidate an otherwise 
acceptable bid, and the revised regulations' requirements will be 
deemed to be part of the existing affirmative action forms.
    (f) Ordnance Disposal Areas. Bidders are cautioned as to the 
existence of two inactive ordnance disposal areas in the Corpus Christi 
and East Breaks areas, shown on the map described in paragraph 13(a). 
These areas were used to dispose of ordnance of unknown composition and 
quantity. These areas have not been used since about 1970. Water depths 
in the Corpus Christi area range from approximately 600 to 900 meters. 
Water depths in the East Breaks area range from approximately 300 to 
700 meters. Bottom sediments in both areas are generally soft, 
consisting of silty clays. Exploration and development activities in 
these areas require precautions commensurate with the potential 
hazards.
    (g) Archaeological Resources. Bidders are advised that a Final Rule 
regarding archaeological resources was published in the Federal 
Register on October 21, 1994 (59 FR 53091), granting specific authority 
to each MMS Regional Director to require archaeological surveys and 
reports (under 30 CFR 250, 256, 260, and 281) and the submission of 
these reports to the Regional Director prior to exploration, 
development and production, or installation of lease-term or right-of-
way pipelines. MMS Notice to Lessees (NTL) 91-02 (Outer Continental 
Shelf Archaeological Resources Requirements for the Gulf of Mexico OCS 
Region) published in the Federal Register on December 20, 1991 (50 FR 
66076) effective February 17, 1992, specifies survey methodology, 
linespacing, and archaeological report writing requirements for lessees 
and operators in the MMS Gulf of Mexico Region.
    Two additional documents are available from the MMS Gulf of Mexico 
Region Public Information Office (see paragraph 14(a)):

    ``List of Lease Blocks Within the High-Probability Area for 
Historic Period Shipwrecks on the OCS'' dated January 30, 1995. This 
list supersedes the list promulgated by the MMS Letter to Lessees 
(LTL) of November 30, 1990.
    ``List of Lease Blocks Within the High-Probability Area for 
Prehistoric Archaeological Resources on the OCS'' dated January 30, 
1995.

    Implementation of this Final Rule and NTL 91-02 obviates the need 
for the Protection of Archaeological Resources Stipulation required for 
previous issues.
    (h) Proposed Rigs to Reefs. Bidders are advised that there are OCS 
artificial reef sites and planning areas for the Gulf

[[Page 42719]]

of Mexico. These are generally located in water depths of less than 200 
meters. While all existing and proposed sites require a permit from the 
U.S. Army Corps of Engineers, this ``Rigs to Reefs'' program is 
implemented through State sponsorship through the following State 
Coordinators:

Alabama Mr. Walter M. Tatum, (334) 968-7576
Florida Mr. Jon Dodrill, (904) 922-4340
Louisiana Mr. Rick Kasprzac, (504) 765-2375
Mississippi Mr. Mike Buchanan, (601) 385-5860
Texas Ms. Jan Coulbertson, (713) 474-1418

    For more information, on artificial reef sites, prospective bidders 
should contact the above listed State Artificial Reef Coordinators for 
their areas of interest.
    (i) Proposed Lightering Zones. Bidders are advised that the U.S. 
Coast Guard has proposed designating certain areas of the Gulf of 
Mexico (60 FR 1958 of January 5, 1995), as lightering zones for the 
purpose of permitting single hull vessels to off-load oil within the 
U.S. Exclusive Economic Zone. Such designation may have implications 
for oil and gas operations in the areas. Additional information may be 
obtained from Lieutenant Commander Stephen Kantz, Project Manager, Oil 
Pollution Act (OPA 90) Staff, at (202) 267-6740.
    (j) Statement Regarding Certain Geophysical Data. Pursuant to 
Sections 18 and 26 of the OCS Lands Act, as amended, and the 
regulations issued thereunder, MMS has a right of access to certain 
geophysical data and information obtained or developed as a result of 
operations on the OCS. MMS is sensitive to the concerns expressed by 
industry regarding the confidentiality of individual company work 
products and client lists and the potential burden of responding to a 
myriad of requests from MMS pertaining to the existence and 
availability of these types of reprocessed geophysical data. To resolve 
the concerns of both industry and MMS with respect to such cases, MMS 
has worked with industry to develop the requirements contained within 
paragraph 3(b) Method of Bidding above. MMS has modified the previous 
procedure to require that bidders who are in possession of the 
requested data, now identify the specific data by line name or 3D 
phase. This will help MMS in identifying time data that may already be 
in our data base and at the same time not impose undue burden on 
industry by rerequesting it. These requirements are being imposed on a 
trial basis to determine their effectiveness and are subject to 
modification in future sales.
    The details of this requirement are specified in the document 
``Trial Procedures for Access to Certain Geophysical Data in the Gulf 
of Mexico'' (revised January 19, 1996), which is available upon request 
from the MMS Gulf of Mexico Region Public Information Unit (see 
paragraph 14(a)). In brief, these requirements include:
    (1) In the period for ninety (90) days after the sale, bidders will 
allow MMS to inspect such data within seven (7) days of a written 
request from MMS, and upon further written request will transmit to 
MMS, within ten (10) working days, such data. After this ninety day 
period, a response time of thirty (30) days following an MMS written 
request will be considered adequate.
    (2) Successful bidders must retain such data for three (3) years 
after the sale, and unsuccessful bidders must retain such data for six 
(6) months after the sale, for possible acquisition by MMS.
    For the six (6) month period after the sale, based on a review of 
the allowable cost of data reproduction to MMS for three-dimensional 
and two-dimensional data sets, the company providing the reprocessed 
data will be reimbursed at a rate of $480 per block or part thereof for 
three-dimensional data and $2 per line mile for two-dimensional data. 
Afterwards, reimbursement will be subject to the terms and conditions 
of 30 CFR 251.13(a).
    All geophysical data and information obtained and reviewed by MMS 
pursuant to these procedures shall be held in the strictest confidence 
and treated as proprietary in accordance with the applicable terms of 
30 CFR 251.14.
    For additional information, contact the MMS Gulf of Mexico Regional 
Office of Resource Evaluation at (504) 736-2720.
    (k) Information about Indicated Hydrocarbons. Bidders are advised 
that MMS makes available, about 3 months prior to a lease sale, a list 
of unleased tracts having well bores with indicated hydrocarbons. Basic 
information relating to production, well bores, and pay range for each 
tract is included in the list. The list is available from the MMS Gulf 
of Mexico Region Public Information Unit (see paragraph 14(a)).
    (l) Royalty Relief. The Outer Continental Shelf (OCS) Deep Water 
Royalty Relief Act authorizes the Secretary of the Interior to offer 
certain deepwater OCS tracts in the Central and Western Gulf of Mexico 
for lease with suspension of royalties for a volume, value, or period 
of production the Secretary determines. An interim rule was published 
in the Federal Register (61 FR 12022; March 25, 1996) that specifies 
the royalty suspension terms under which the Secretary will make tracts 
available for this sale. Bidders are advised to review that document 
for additional details on this matter. For further information, bidders 
may contact Walter Cruickshank of the MMS Offshore Minerals Analysis 
Division at (202) 208-3822.
    A map titled ``Royalty Suspension Areas For The Western Gulf Of 
Mexico'' depicting blocks in which such suspensions may apply is 
currently available from the MMS Gulf of Mexico Regional Office (see 
paragraph 14(a) of this Notice).
    The publication ``OCS Operations Field Names Master List'' depicts 
currently established fields in the Gulf of Mexico. This document is 
updated monthly and reprinted quarterly. Copies may be obtained from 
the MMS Gulf of Mexico Regional Office (see paragraph 14(a) of this 
Notice).
    (m) Lease Instrument. Bidders are advised that the lease instrument 
will include royalty relief provisions (paragraph 4(c)(3) of this 
Notice) and 8-year lease cancellation provisions (paragraph 14(d) of 
this Notice) where applicable. Leases will continue to be issued on 
Form MMS-2005 (March 1986) as amended.
    (n) Electronic Funds Transfer. Bidders are advised that the 4/5ths 
and first year rental EFT instructions for lease payoff have been 
revised and updated by MMS Royalty Management. Companies may now use 
either the Fedwire Deposit System or the Automated Clearing House 
(overnight payments). See paragraph 10(a) of this Notice.
    (o) Minimizing Oil and Gas Structures Near the Flower Garden Banks. 
Bidders are reminded of Notice to Lessees and Operators (NTL) 85-8, 
``Minimizing Oil and Gas Structures in the Gulf of Mexico,'' dated 
November 26, 1985. Section II of the NTL sets forth the MMS' policy 
with regard to the minimization of structures for drilling, 
development, and production on OCS leases. The policy requires that 
such structures including lease-term pipelines be placed in a manner 
that causes minimum interference with other significant uses of the 
OCS. Please be advised that the MMS will strictly adhere to this policy 
when reviewing Exploration Plans and Development Operations 
Coordination Documents which propose the use or installation of such 
structures within the ``Four-Mile Zone'' and adjacent areas surrounding 
the Flower Garden Banks National Marine Sanctuary.


[[Page 42720]]


    Dated: August 9, 1996.
Cynthia Quarterman,
Director, Minerals Management Service.

    Approved:
Sylvia V. Baca,
Acting Assistant Secretary, Land and Minerals Management.
[FR Doc. 96-20861 Filed 8-15-96; 8:45 am]
BILLING CODE 4310-ME-P