[Federal Register Volume 63, Number 142 (Friday, July 24, 1998)]
[Notices]
[Pages 39887-39889]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-19843]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service


Outer Continental Shelf, Western Gulf of Mexico, Oil and Gas 
Lease Sale 171

AGENCY: Minerals Management Service, Interior.

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, 
August 25, 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, 
August 25, 1998.
    (b) Bid Opening Time. Bid Opening Time will be 9 a.m., Wednesday, 
August 26, 1998, in the Hyatt Regency Hotel, 500 Poydras Plaza, New 
Orleans, Louisiana (Cabildo Ballrooms A, B, and C). The MMS published a 
list of restricted joint bidders, which applies to this sale, in the 
Federal Register at 63 FR 14473, on March 25, 1998.
    (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) 736-0557 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 171, not to be opened until 9 a.m., 
Wednesday, August 26, 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 must execute all documents 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 have the 
option of submitting the \1/5\th cash bonus in cash or by cashier's 
check, bank draft, or certified check with the bid, or by using 
electronic funds transfer (EFT) procedures. Detailed instructions for 
submitting the \1/5\th bonus payment by EFT are contained in the 
document ``Instructions for Making EFT \1/5\th Bonus Payments'' 
included in the Sale Notice Package.
    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. Bidders must include a statement to this effect on each bid 
(see the document ``Bid Form and Envelope'' contained in the Sale 
Notice Package).
    4. Minimum Bid, Yearly Rental, and Bidding Systems.
    The following minimum bid, yearly rental, and bidding systems apply 
to this sale (the map ``Lease Terms, Bidding Systems, and Royalty 
Suspension Areas, Sale 171'' is included in the Sale Notice Package 
(see paragraph 1)):

    Note: Example for Calculating Minimum Bid and Rental: If the 
block bid contains a fraction of an acre (for example, 3,010.2 
acres), round up to the next whole acre (3,011 acres) and multiply 
by the applicable dollar amount to determine the correct minimum bid 
or rental. In this example, if the established minimum bid for the 
block is $25 per acre, the minimum bid for the block would be 
$75,275 (3,011  x  $25). If the rental rate for the block is $5 per 
acre, the annual rental for the block would be $15,055 (3,011  x  
$5).
    (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 171,'' will require 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) Bidding Systems. After initial production is obtained, leases 
will require a minimum royalty of the

[[Page 39888]]

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 171.'' 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).
    (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. 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.
    The map titled ``Lease Terms, Bidding Systems, and Royalty 
Suspension Areas, Sale 171'' depicts the blocks in which such 
suspensions may apply.
    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 (e) of the document ``Information to Lessees,'' 
contained 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 paragraphs 1 and 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 as specified in paragraph 4 above. Any bid submitted 
which does not conform to the requirements of this Notice, the OCS 
Lands Act, as amended, and other applicable regulations may be returned 
to the person submitting that bid by the 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.
    A copy of the certification form is contained in the Sale Notice 
Package.
    11. Leasing Maps and Official Protraction Diagrams. The following 
Leasing Maps and 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--Texas, Nos. 1 
through 8. This is a set of 16 maps which sells for $18.00.
    (b) Outer Continental Shelf (OCS) 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 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

[[Page 39889]]

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:

    Western Gulf of Mexico Lease Sale 171--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 Western Gulf of Mexico tracts 
currently under lease, titled ``Western Gulf of Mexico Leased Lands 
List dated July 15, 1998,'' is included in the Sale Notice Package.
    Although currently unleased, no bids will be accepted on High 
Island Area, East Addition, South Extension, Blocks A-375, A-398, and 
A-401 (at the Flower Garden Banks), and High Island Area, South 
Addition, Block A-513 (at Stetson Bank).
    Although 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.
    Although 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.
    Although currently unleased, no bids will be accepted in this Sale 
on the following blocks which are beyond the United States Exclusive 
Economic Zone (EEZ). The offering of these blocks, which are identified 
as the Northern portion of the Western Gap, has been temporarily 
deferred by the Department of the Interior due to ongoing negotiations 
with the Government of Mexico on the delimitation of the continental 
shelf in the Western Gap beyond the EEZ of both countries.

Keathley Canyon (Area NG15-05)

Blocks
722 through 724
764 through 770
807 through 816
849 through 861
892 through 907
934 through 953
978 through 999

Area NG15-08

Blocks
11 through 34
56 through 81
102 through 128
148 through 173
194 through 217
239 through 261
284 through 305
336 through 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 171.'' A copy of this map is 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 171'' 
depicts the blocks to which the three lease stipulations (Topographic 
Features, Military Areas, and Naval Mine Warfare Area) apply. The text 
of the lease stipulations is contained in the document ``Lease 
Stipulations for Oil and Gas Lease Sale 171;'' 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 
171. These stipulations are the same stipulations used in Sale 168, 
Western Gulf, held in August 1997. (See the Final Notice of Sale for 
Sale 168 in the Federal Register at 62 FR 39863, July 24, 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 171
Information to Lessees for Sale 171
Western Gulf of Mexico Leased Lands List dated July 15, 1998
Western Gulf of Mexico Lease Sale 171--Final. Unleased Split Blocks and 
Unleased Acreage of Blocks with Aliquots and Irregular Portions Under 
Lease
Lease Stipulations for Oil and Gas Lease Sale 171
Debarment Certification Form
Bid Form and Envelope
Phone Numbers/Addresses of Bidders Form
Instructions for Making EFT 1/5th Bonus Payments
Lease Terms, Bidding Systems, and Royalty Suspension Areas, Sale 171 
Map
Stipulations and Deferred Blocks, Sale 171 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: July 20, 1998.
Cynthia Quarterman,
Director, Minerals Management Service.

    Approved:
Bob Armstrong,
Assistant Secretary, Land and Minerals Management.
[FR Doc. 98-19843 Filed 7-23-98; 8:45 am]
BILLING CODE 4310-MR-P