[Federal Register Volume 63, Number 30 (Friday, February 13, 1998)]
[Notices]
[Pages 7481-7484]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-3532]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service


Outer Continental Shelf, Central Gulf of Mexico, Oil and Gas 
Lease Sale 169

AGENCY: Minerals Management Service.

ACTION: Final notice of sale.

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    1. Authority. The Minerals Management Service (MMS) is issuing this 
Final Notice of Sale under the Outer Continental Shelf (OCS) Lands Act 
(43 U.S.C. 1331-1356, as amended) and the regulations issued thereunder 
(30 CFR Part 256).
    A ``Sale Notice Package,'' containing this Notice and several 
supporting and essential documents referenced in the Notice, is 
available from the MMS Gulf of Mexico Regional Office Public 
Information Unit (see paragraph 15 of this Notice).
    2. Filing of Bids. Bidders must comply with the following 
requirements. Times specified hereafter are local New Orleans times 
unless otherwise indicated.
    (a) Filing of Bids. Sealed bids must be received by the Regional 
Director (RD), Gulf of Mexico Region, MMS, 1201 Elmwood Park Boulevard, 
New Orleans, Louisiana 70123-2394, during normal business hours (8 a.m. 
to 4 p.m.) until the Bid Submission Deadline at 10 a.m., Tuesday, March 
17, 1998. If the RD receives bids later than the time and date 
specified above, he will return the bids unopened to bidders. Bidders 
may not modify or withdraw their bids unless the RD receives a written 
modification or written withdrawal request prior to 10 a.m., Tuesday, 
March 17, 1998.
    (b) Bid Opening Time. Bid Opening Time will be 9 a.m., Wednesday, 
March 18, 1998, at the Hyatt Regency Hotel, 500 Poydras Plaza, New 
Orleans, Louisiana. The MMS published a list of restricted joint 
bidders, which applies to this sale, in the Federal Register at 62 FR 
52771, on October 9, 1997.
    (c) Natural Disasters. In the event of widespread flooding or other 
natural disaster, the MMS Gulf of Mexico Regional Office may extend the 
bid submission deadline. Bidders may call (504) 736-0537 for 
information about the possible extension of the bid submission deadline 
due to such an event.
    3. Method of Bidding.
    (a) Submission of Bids. For each tract bid upon, a bidder must 
submit a separate signed bid in a sealed envelope labeled ``Sealed Bid 
for Oil and Gas Lease Sale 169, not to be opened until 9 a.m., 
Wednesday, March 18, 1998.'' The total amount bid must be in a whole 
dollar amount, any cent amount above the whole dollar will be ignored 
by the 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 Sale Notice Package (see paragraph 15 of this Notice).
    Bidders are advised that the 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 \1/5\th bonus on all 
high bids. A statement to this effect will be included on each bid (see 
the document ``Bid Form and Envelope'' contained in the Sale Notice 
Package).
    Bidders must execute all document in conformance with signatory 
authorizations on file in the MMS Gulf of Mexico Regional Office. 
Partnerships also must 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. The MMS may require bidders to submit other 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.
    (b) Submission of the \1/5\th Bonus Payment. Bidders must submit 
the \1/5\th cash bonus using one of the following options:

[[Page 7482]]

    (1) Bidders may submit with each bid \1/5\th 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); or
    (2) Bidders may use electronic funds transfer (EFT) payment for \1/
5\th of the cash bonus, payable to the Minerals Management Service. 
Bidders who choose this method must contact the MMS Royalty Management 
(Mr. David Menard at (303) 231-3574) by the Bid Submission Deadline to 
inform the MMS of the bidder's intent to use EFT, to clarify EFT 
procedures to be used, and to designate an EFT Coordinator. Joint 
bidders must designate one bidder as EFT Coordinator. The EFT 
Coordinator refers to the bidder, i.e., the corporation, company, or 
partnership submitting the bid(s), or an individual citizen submitting 
bids on his or her own behalf (NOT an individual within a corporation/
company/partnership) for an OCS Lease Sale. EFT Coordinators must 
submit the bids and ensure that the total of the \1/5\th cash bonus for 
the high bids they submit is transferred to the MMS via EFT. The EFT 
payment shall be made by either the Fedwire Deposit System (same day 
payments) or the Automated Clearing House (overnight payments).
    The Gulf of Mexico OCS Regional Office will advise bidders who 
submit high bids of the amount required for EFT payment. Promptly after 
notification, the EFT Coordinators must instruct their banks to send 
via EFT the sum of the \1/5\th bonus for all high bids to the 
appropriate United States Treasury account. Instructions for making EFT 
\1/5\th bonus payments are included in the Sale Notice Package. [These 
procedures/instructions are consistent with \4/5\th bonus and first 
year rental payment procedures using EFT.]
    Securing EFT payments. Bidders electing to use EFT procedures to 
pay the \1/5\th bonus payments, EXCEPT for bidders who are current 
Federal OCS leaseholders AND are exempt from supplemental bonding 
requirements, must secure the EFT payments (see ``Instructions for 
Making EFT \1/5\th Bonus Payments'' included with the Sale Notice 
Package).
    A bidder opting to use EFT for the \1/5\th bonus payment who does 
not meet the above criteria must secure the EFT payment by one of the 
three following methods:
    (a) The bidder opting to use EFT for the \1/5\th bonus payment may 
amend a $3 million areawide development bond by a Rider from the 
issuing surety to contain provisions that the bond may be used to cover 
pre-lease obligations. All other terms and conditions for the bond 
shall remain unchanged. The Rider must be notarized and must be in 
effect prior to submitting bids for OCS Lease Sale 169. If the $3 
million areawide development coverage is through a U.S. Treasury Note 
then a notarized letter from the bidder agreeing to the terms that the 
Treasury Note may be used to cover pre-lease obligations must be 
approved by the MMS prior to bid submission for Sale 169. That 
provision must remain in effect until the EFT deposit is made. Details 
of using an updated areawide development bond to secure the EFT payment 
of the \1/5\th bonus are included in the ``Instructions for Making EFT 
\1/5\th Bonus Payments'' document included with the Sale Notice 
Package.
    The EFT payment for \1/5\th of the sum of the high bids on blocks 
must be received in the appropriate United States Treasury account no 
later than 2:00 p.m., Eastern Time, on March 19, 1998, the day after 
Bid Opening.
    If the EFT payments are late or deficient in amount after 5:00 
p.m., Eastern Time, on March 20, 1998, the MMS may call the bond/
Treasury Note to cover the delinquent payment plus interest.
    (b) The bidder opting to use EFT for the \1/5\th bonus payment may 
submit in a separate sealed envelope accompanying the bids, a letter of 
credit (LOC) for at least \1/5\th of the sum of all bids submitted by 
that bidder for Sale 169, including joint bids. A sample LOC is 
enclosed in the ``Instructions for Making EFT \1/5\th Bonus Payments'' 
document included with the Sale Notice Package. The bidder must use 
that sample clean, stand-by, irrevocable LOC with no modifications.
    The LOC must have a minimum coverage period of 120 days. The LOC 
must be from a bank that has a minimum Thomson BankWatch rating of: 
``C'' for an LOC of less than $1 million; ``B/C'' for an LOC between $1 
million to $10 million; or ``B'' for LOC over $10 million.
    The LOC shall be submitted in a separate sealed envelope. Once the 
EFT payment in an amount sufficient to cover that bidder's high bids is 
credited to the appropriate United States Treasury account, the LOC 
accompanying those bids will be returned or may be picked up at the 
Gulf of Mexico Regional Office. Details of using an LOC to secure the 
EFT payment of the \1/5\th bonus are included in the ``Instructions for 
Making EFT \1/5\th Bonus Payments'' included with the Sale Notice 
Package. The envelope containing this LOC document should be in the 
following format:

LETTER OF CREDIT SECURING EFT PAYMENTS
Submitted by: Explorer LTD.
GOM Company No.: 20999

    The EFT payment for \1/5\th of the sum of the high bids on blocks 
must be received in the appropriate United States Treasury account no 
later than 2:00 p.m., Eastern Time, on March 19, 1998, the day after 
Bid Opening.
    If the EFT payments are late or deficient in amount after 5:00 
p.m., Eastern Time, on March 20, 1998, the MMS will draw on the LOC for 
the total amount due, including interest.
    (c) Alternatively, the bidder opting to use EFT for depositing the 
\1/5\th bonus payment may submit, in a separate sealed envelope 
accompanying the bids, a single payment for \1/5\th of the sum of all 
bids submitted by that bidder for Sale 169, including joint bids. The 
lump sum payment(s) in the sealed envelope(s) must be by cashier's 
check, bank draft, or certified check, payable to the order of the U.S. 
Department of the Interior--Minerals Management Service. Once the EFT 
payment in an amount sufficient to cover that bidder's high bids is 
credited to the appropriate United States Treasury account, the lump 
sum payment accompanying those bids will be returned or may be picked 
up at the Gulf of Mexico Regional Office. Details of using lump sum 
check(s) to secure the EFT payment of the \1/5\th bonus are included in 
the ``Instructions for Making EFT \1/5\th Bonus Payments'' included 
with the Sale Notice Package. The envelope containing this payment 
should be in the following format:

LUMP SUM CHECK SECURING EFT PAYMENTS
Submitted by: Explorer LTD.
GOM Company No.: 20999

    The EFT payment for \1/5\th of the sum of the high bids on blocks 
must be received in the appropriate United States Treasury account no 
later than 2:00 p.m., Eastern Time, on March 19, 1998, the day after 
Bid Opening.
    If the EFT payments are late or deficient in amount after 5:00 
p.m., Eastern Time, on March 20, 1998, the MMS will deposit lump sum 
payments accompanying the bids into the appropriate United States 
Treasury account. Should these payments (which secure both high bids 
and unsuccessful bids) require a refund to the bidders, the MMS will 
refund the difference without

[[Page 7483]]

interest, through EFT as soon as practicable.
    4. Minimum Bid, Yearly Rental, and Bidding Systems. The following 
minimum bid, yearly rental, and bidding systems apply to this sale:
    (a) Minimum Bid. Bidders must submit a cash bonus in the amount of 
$25.00 or more per acre or fraction thereof with all bids submitted at 
this sale.
    (b) Yearly Rental. All leases awarded on tracts in water depths of 
200 meters and greater (i.e., tracts in any of the three royalty 
suspension areas), as depicted on the map ``Lease Terms, Bidding 
Systems, and Royalty Suspension Areas, Sale 169,'' will require a 
yearly rental payment of $7.50 per acre or fraction thereof until 
initial production is obtained. This map is included in the Sale Notice 
Package.
    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) Bidding Systems. After initial production is obtained, leases 
will require 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 Map ``Lease Terms, Bidding Systems, and Royalty 
Suspension Areas, Sale 169'' 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 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).
    (3) Royalty Suspension. In accordance with Public Law 104-58, 
signed by the President on November 28, 1995, the MMS has developed 
procedures providing for the suspension of royalty payments on 
production from eligible leases issued as a result of this sale.
    A map titled ``Lease Terms, Bidding Systems, and Royalty Suspension 
Areas, Sale 169'' depicting blocks in which such suspensions may apply 
is included in the Sale Notice Package.
    The final rule specifying royalty suspension terms for lease sales 
in the Central and Western Gulf was published in the Federal Register 
on January 16, 1998 (63 FR 2626). Additional information pertaining to 
royalty suspension matters may be found in the document ``Information 
to Lessees,'' contained in the Sale Notice Package.
    5. Equal Opportunity. Bidders must have on file in the MMS Gulf of 
Mexico Regional Office, prior to lease award, 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) (see the document ``Information to Lessees for Sale 169'' in the 
Sale Notice Package).
    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 payments made in accordance with 
paragraph 3(b) above will 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, 
including the documents contained in the associated Sale Notice Package 
(see paragraph 15 of this Notice) and applicable regulations;
    (b) the bid is the highest valid 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 associated Sale Notice Package, the OCS Lands Act, 
as amended, and other applicable regulations may be returned 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, tracts will be evaluated in 
accordance with established MMS bid adequacy procedures. A copy of the 
current procedures (``Summary of Procedures for Determining Bid 
Adequacy at Offshore Oil and Gas Lease Sales: Effective August 1997, 
with Sale 168'') is available from the MMS Gulf of Mexico Regional 
Office Public Information Unit (see paragraph 15 of this Notice). This 
document incorporates changes announced in a Federal Register Notice at 
62 FR 37589, dated July 14, 1997.
    10. Successful Bidders. The following requirements apply to 
successful bidders in this sale:
    (a) Lease Issuance. The MMS will require each person who has 
submitted a bid accepted by the authorized officer 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 EFT in accordance with the requirements of 30 CFR 
218.155, and satisfy the bonding requirements of 30 CFR 256, Subpart I, 
as amended.
    Additional information pertaining to this matter may be found in 
the document ``Information to Lessees'' contained in the Sale Notice 
Package.
    (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, the MMS will require a 
subsequent certification 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 FR 33035.
    A copy of the certification form is contained in the Sale Notice 
Package.

[[Page 7484]]

    11. Leasing Maps and Official Protraction Diagrams. The following 
Leasing Maps or Official Protraction Diagrams, which may be purchased 
from the MMS Gulf of Mexico Regional Office Public Information Unit 
(see the document ``Information to Lessees'' contained in the Sale 
Notice Package), depict the tracts offered for lease in this sale:
    (a) Outer Continental Shelf (OCS) Leasing Maps--Louisiana Nos. 1 
through 12. This is a set of 30 maps which sells for $32.
    (b) Outer Continental Shelf Official Protraction Diagrams.
    These diagrams sell for $2.00 each.

NH 15-12--Ewing Bank (rev. 12/02/76).
NH 16-4--Mobile (rev. 02/23/93).
NH 16-7--Viosca Knoll (rev. 12/02/76).
NH 16-10--Mississippi Canyon (rev. 05/01/96).
NG 15-3--Green Canyon (rev. 12/02/76).
NG 15-6--Walker Ridge (rev. 12/02/76).
NG 15-9--(No Name) (rev. 04/27/89).
NG 16-1--Atwater Valley (rev. 11/10/83).
NG 16-4--Lund (rev. 08/22/86).
NG 16-7--(No Name) (rev. 04/27/89).

    12. Description of the Areas Offered for Bids.
    (a) Acreage Available for Leasing. 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 document:
    ``Central Gulf of Mexico Lease Sale 169--Final. Unleased Split 
Blocks and Unleased Acreage of Blocks with Aliquots and Irregular 
Portions Under Lease.''
    The Sale Notice Package contains this document.
    (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 and those blocks or 
partial blocks listed below. A list of Central Gulf of Mexico tracts 
currently under lease, titled ``Central Gulf of Mexico Leased Lands 
List dated February 6, 1998'' is included in the Sale Notice Package.
    Although currently unleased, no bids will be accepted in this Sale 
on the following blocks which are currently under appeal: Main Pass 
Area, South and East Addition, Blocks 253 and 254, and Viosca Knoll 
Blocks 213 and 256.
    Although currently unleased, no bids will be accepted in this Sale 
on the following blocks which are beyond the United States Exclusive 
Economic Zone. The offering of these blocks, which were identified in 
the proposed Notice of Sale as the Northern portion of the Western and 
Eastern Gaps, has been temporarily deferred by the Department of the 
Interior in anticipation of the early commencement of negotiations with 
the Government of Mexico on the delimitation of the continental shelf 
in the Western Gap beyond the EEZ of both countries.

Area NG15-09

Blocks
133 through 135
177 through 184
221 through 238
265 through 281
309 through 320
358

Area NG16-07

Blocks
172, 173
213 through 217
252 through 261
296 through 305
349
    13. Lease Terms and Stipulations.
    (a) Leases resulting from this sale will have initial terms as 
shown on the map ``Lease Terms, Bidding Systems, and Royalty Suspension 
Areas, Sale 169.'' Copies of the map are included in the Sale Notice 
Package. Copies of the lease form are available from the MMS Gulf of 
Mexico Regional Office Public Information Unit (see the document 
``Information to Lessees'' contained in the Sale Notice Package).
    (b) The map titled ``Stipulations and Deferred Blocks, Sale 169'' 
depicts the blocks to which the four lease stipulations (Topographic 
Features, Live Bottoms, Military Areas, and Blocks South of Baldwin 
County, Alabama) apply. The text of the lease stipulations is contained 
in the document ``Lease Stipulations for Oil and Gas Lease Sale 169;'' 
this map and document are contained in the Sale Notice Package. These 
stipulations will become a part of any leases on applicable blocks 
resulting from Sale 169. Three of the stipulations (Topographic 
Features, Live Bottoms, and Military Areas) are the same stipulations 
used in Sale 166, Central Gulf, held in March 1997. (See the Final 
Notice of Sale for Sale 166 in the Federal Register at 62 FR 4789, 
January 31, 1997.)
    14. Information to Lessees. The Sale Notice Package contains a 
document titled ``Information to Lessees.'' These Information to 
Lessees items provide information on various matters of interest to 
potential bidders.
    15. Sale Notice Package. The Sale Notice Package, and individual 
documents contained therein, are available from 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.
    The documents referenced below and contained in the Sale Notice 
Package contain information essential for bidders, and bidders are 
charged with the knowledge contained therein. Included in the Package 
are:

Cover sheet
Final Notice of Sale for Sale 169
Information to Lessees for Sale 169
Central Gulf of Mexico Leased Lands List dated February 6, 1998
Central Gulf of Mexico Lease Sale 169--Final. Unleased Split Blocks and 
Unleased Acreage of Blocks with Aliquots and Irregular Portions Under 
Lease
Lease Stipulations for Oil and Gas Lease Sale 169
Debarment Certification Form
Bid Form and Envelope
Phone Numbers/Addresses of Bidders Form
Instructions for Making EFT \1/5\th Bonus Payment
Lease Terms, Bidding Systems, and Royalty Suspension Areas, Sale 169 
Map
Stipulations and Deferred Blocks, Sale 169 Map

    For additional information, contact the Regional Supervisor for 
Leasing and Environment, Minerals Management Service, 1201 Elmwood Park 
Boulevard, New Orleans, Louisiana 70123-2394, or by telephone at (504) 
736-2759. In addition, certain documents may be viewed and downloaded 
from the MMS World Wide Web site at http://www.mms.gov. The MMS also 
maintains a 24-hour Fax-on-Demand Service at (202) 219-1703.

    Dated: February 6, 1998.
Robert E. Brown,
Acting Director, Minerals Management Service.

Bob Armstrong,
Assistant Secretary, Land and Minerals Management.
[FR Doc. 98-3532 Filed 2-12-98; 8:45 am]
BILLING CODE 4310-MR-M