[Federal Register Volume 64, Number 98 (Friday, May 21, 1999)]
[Notices]
[Pages 27805-27806]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-12832]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service


Agency Information Collection Activities: Submitted for Office of 
Management and Budget Review; Comment Request

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Notice.

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SUMMARY: To comply with the Paperwork Reduction Act (44 U.S.C. 3501 et 
seq.), we are notifying you that we have submitted an information 
collection request (ICR) to the Office of Management and Budget (OMB) 
for review and approval. We are also soliciting your comments on this 
ICR which describes the information collection, its expected costs and 
burden, and how the data will be collected.

DATES: Written comments should be received on or before June 21, 1999.

ADDRESSES: You may submit comments directly to the Office of 
Information and Regulatory Affairs, OMB, Attention: Desk Officer for 
the Department of the Interior (OMB Control Number 1010-0073), 725 17th 
Street, N.W., Washington, D.C. 20503; telephone (202) 395-7340. Copies 
of these comments should also be sent to us. The U.S. Postal Service 
address is Minerals Management Service, Royalty Management Program, 
Rules and Publications Staff, P.O. Box 25165, MS 3021, Denver, Colorado 
80225-0165; the courier address is Building 85, Room A-613, Denver 
Federal Center, Denver, Colorado 80225; and the e:Mail address is 
RMP.[email protected].

FOR FURTHER INFORMATION CONTACT: Dennis C. Jones, Rules and 
Publications Staff, telephone (303) 231-3046, FAX (303) 231-3385, 
e:Mail Dennis.C.J[email protected]. You may also contact Dennis Jones to 
obtain a copy of the ICR at no cost.

SUPPLEMENTARY INFORMATION:
    Title: Net Profit Share Leases.
    OMB Control Number: 1010-0073.
    Abstract: The Department of the Interior is responsible for matters 
relevant to mineral resource development in the OCS. The Secretary of 
the Interior (Secretary) is responsible for managing the production of 
minerals from Federal and Indian lands and the OCS; for collecting 
royalties from lessees who produce minerals; and for distributing the 
funds collected in accordance with applicable laws. The Minerals 
Management Service (MMS) performs the royalty management functions for 
the Secretary.
    To encourage exploration and development of oil and gas leases on 
submerged lands of the Outer Continental Shelf (OCS), regulations were 
promulgated at 30 CFR 260.110(4) implementing a net profit share 
bidding system. The Net Profit Share Lease (NPSL) bidding system was 
established to properly balance a fair market return to the Federal 
Government for the lease of its lands, with a fair profit to companies 
risking their investment capital. The system provides an incentive for 
early and expeditious exploration and development, and provides for a 
sharing of the risks by the lessee and the Government. The bidding 
system incorporates a fixed capital recovery system as the means 
through which the lessee recovers costs of exploration and development 
from production revenues, along with a reasonable return on investment. 
This collection of information is necessary in order to determine when 
royalty payments are due, and to determine the proper amount of 
payment.
    Under the NPSL bidding system, a notice of OCS lease sale is 
published in the Federal Register with a net profit share rate and a 
capital recovery factor (CRF) established for each tract within the 
sale. The CRF allows the lessee to inflate certain allowable costs by 
multiplying costs by the CRF. This additional allowance results in a 
type of risk-sharing arrangement with the Government. Tracts within the 
same sale may have different profit share rates and different CRF's. 
The last OCS lease sale involving NPSL's was in August 1983.
    When companies enter into NPSL agreements, they agree to submit the 
reports required by 30 CFR 220.031. There are no reporting forms 
required, but the lessees must submit updates containing specific 
information. Before production begins, reports are required on an 
annual basis. These reports must document costs incurred, credits 
received, and the balance in the NPSL capital account. Once production 
begins, monthly reports are required that include the amount and 
disposition of oil and gas saved, removed, or sold; the amount of 
production revenue; the amount and description of costs and credits to 
the NPSL capital account; the balance in the capital account; the net 
profit share base and net profit share payment due the Government; and 
the lessee's monthly profit share. All information submitted is taken 
directly from the lessee's own records. No unique information is 
required by MMS.
    Royalty payments are made based on the individual lease's net 
profit share rate, multiplied by the quantity (revenues and other 
credits, less costs). MMS uses the data submitted in the annual and 
monthly reports to verify costs claimed, revenues earned, and royalty 
payments due. No royalties are paid until the lessee recovers 
exploration and development expenses. Information provided in the 
reports is used by MMS auditors. Failure of the respondent to submit 
the information results in noncompliance with the requirements of 30 
CFR Part 220 and could result in loss of royalty payments to the 
Government.
    An agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB Control Number. The Federal Register Notice with a 
60-day comment period soliciting comments on this collection

[[Page 27806]]

of information was published on December 11, 1998 (63 FR 68472).
    Estimated Number and Type of Respondents/Affected Entities: 
Approximately 11 Federal and Indian lessees and payors.
    Frequency of Response: Monthly responses are required for 15 
leases, and annual responses are required for 3 leases.
    Burden Statement and Estimated Annual Reporting and Recordkeeping 
``Hour'' Burden: We estimate the respondent burden to average 16 hours 
per response for a total of 2,928 hours. We estimate 1 hour of 
recordkeeping for each of the 18 OCS leases with NPSL agreements for a 
total of 18 hours. Therefore, the total annual burden hour estimate for 
this collection is 2,946 hours.
    Estimated Annual Reporting and Recordkeeping ``Cost'' Burden: We 
have identified no paperwork cost burdens for this collection.
    Comments: Section 3506(c)(2)(A) of the Paperwork Reduction Act 
requires each agency ``* * * to provide notice * * * and otherwise 
consult with members of the public and affected agencies concerning 
each proposed collection of information * * *.'' Agencies must 
specifically solicit comments to: (a) evaluate whether the proposed 
collection of information is necessary for the agency to perform its 
duties, including whether the information is useful; (b) evaluate the 
accuracy of the agency's estimate of the burden of the proposed 
collection of information; (c) enhance the quality, usefulness, and 
clarity of the information to be collected; and (d) minimize the burden 
on the respondents, including the use of automated collection 
techniques or other forms of information technology.
    Send your comments directly to the offices listed under the 
ADDRESSES section of this notice. OMB has up to 60 days to approve or 
disapprove the information collection but may respond after 30 days. 
Therefore, to ensure maximum consideration, OMB should receive public 
comments by June 21, 1999.
    MMS Information Collection Clearance Officer: Jo Ann Lauterbach 
(202) 208-7744.

    Dated: April 22, 1999.
Lucy Querques Denett,
Associate Director for Royalty Management.
[FR Doc. 99-12832 Filed 5-20-99; 8:45 am]
BILLING CODE 4310-MR-P