[Federal Register Volume 65, Number 165 (Thursday, August 24, 2000)]
[Notices]
[Pages 51626-51627]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-21687]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service


Announcement of Invitation for Bids on Oil from Federal 
Properties in the Gulf of Mexico

AGENCY: Minerals Management Service (MMS), Interior.

[[Page 51627]]


ACTION: Notice of Solicitation on Federal Royalty Oil.

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SUMMARY: MMS is announcing a public competitive offering of 
approximately 35,000 barrels per day of crude oil to be taken as 
royalty in kind from Federal properties in the Gulf of Mexico. This 
solicitation may be found on the MMS Internet website at http://www.rmp.mms.gov.

DATES: See SUPPLEMENTARY INFORMATION section below.

ADDRESSES: See  FOR FURTHER INFORMATION CONTACT section below.

FOR FURTHER INFORMATION CONTACT: Mr. Todd Leneau, Minerals Management 
Service, Procurement Branch, MS 2730, P.O. Box 25165, Denver Federal 
Center, Denver, CO 80225-0165; telephone number (303) 275-7385; fax 
(303) 275-7303; e-mail [email protected].

SUPPLEMENTARY INFORMATION: This Solicitation Number 1435-02-00-RP-40337 
offers approximately 35,000 barrels of crude oil per day from selected 
Federal properties in the Gulf of Mexico. This solicitation was posted 
to the MMS Internet website on August 22, 2000, and may be found at 
http://www.rmp.mms.gov under the question ``What else is new?'' The 
solicitation may also be obtained by contacting Mr. Todd Leneau at the 
address in the FOR FURTHER INFORMATION CONTACT section above.
    Bids should be submitted to the address provided in the 
solicitation. Bids will be due at that address on or before September 
18, 2000. MMS will notify successful bidders and operators of 
production selected for royalty in kind on or before September 30, 
2000. The royalty oil contracts will be effective November 1, 2000, and 
will have a 6-month term with a 6-month contract extension by mutual 
consent of both the winning bidder and MMS.
    The Federal Government will begin taking the awarded royalty oil 
volumes for delivery to successful bidders beginning on November 1, 
2000. Under the terms of this solicitation, operators will deliver the 
royalty oil to market centers such as St. James and Empire, Louisiana, 
where winning bidders will take delivery. Winning bidders will report 
deliveries to MMS using a Microsoft Excel spreadsheet. Pricing will be 
established in the contract.
    MMS is allowing bidders to self-certify their financial solvency 
instead of posting a letter of credit. Details are available in the 
solicitation.
    Royalty oil will be sold based on a competitive bidding process. 
The bid proposal will be based on formulas representing differentials 
from index prices. The highest bidder, exceeding or meeting minimum 
bid, will be notified by phone or e-mail and provided a list of 
properties from which to choose. After the highest bidder selects his/
her properties, the list of remaining properties will be provided to 
the next highest bidder. This process will be continued until all the 
oil is selected or the minimum bid threshold is met.
    As stated previously, this sale will be a competitive bidding 
process, whereby a minimum bid, for each oil type, based on 
differentials from index prices will be established. If the minimum bid 
price is not met, MMS will have the option to negotiate prices with the 
highest bidder.
    This offering of crude oil continues the MMS's royalty-in-kind 
pilot program. MMS's objective is to identify circumstances in which 
taking oil and gas royalties as a share of production is a viable 
alternative to the usual practice of collecting oil and gas royalties 
as a share of the value received by the lessee from the sale of 
production.

    Dated: August 21, 2000.
Lucy Querques Denett,
Associate Director for Royalty Management.
[FR Doc. 00-21687 Filed 8-23-00; 8:45 am]
BILLING CODE 4310-MR-P