[Federal Register Volume 66, Number 37 (Friday, February 23, 2001)]
[Notices]
[Pages 11524-11526]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-4491]



  Federal Register / Vol. 66, No. 37 / Friday, February 23, 2001 / 
Notices  

[[Page 11524]]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service


Outer Continental Shelf, Central Gulf of Mexico, Oil and Gas 
Lease Sale 178, Part 1

AGENCY: Minerals Management Service, Interior.

ACTION: Final Notice of Sale 178, Part 1.

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    This Final Notice of Sale 178, Part 1, offers for lease all blocks 
in the Central Gulf of Mexico except for blocks beyond the United 
States Exclusive Economic Zone in the area known as the Northern 
Portion of the Western Gap and certain other deferrals as specified 
below. A separate offering in late August 2001 of Central Gulf of 
Mexico blocks in the Western Gap (in the Amery Terrace Area (NG15-09)) 
is under consideration. If it occurs, it will be known as Sale 178, 
Part 2.
    On March 28, 2001, the Minerals Management Service (MMS) will open 
and publicly announce bids received for blocks offered in Sale 178, 
Part 1, Central Gulf of Mexico, 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). Bidders can obtain a ``Final 
Notice of Sale 178, Part 1 Package'' containing this Notice of Sale and 
several supporting and essential documents referenced herein, from the 
MMS Gulf of Mexico Region's Public Information Unit, 1201 Elmwood Park 
Boulevard, New Orleans, Louisiana 70123-2394, (504) 736-2519 or (800) 
200-GULF, or via the MMS Gulf of Mexico Region's Internet site at 
http://www.gomr.mms.gov. The MMS also maintains a 24-hour Fax-on-Demand 
Service at (202) 219-1703. The ``Final Notice of Sale 178, Part 1 
Package'' contains information essential to bidders, and bidders are 
charged with the knowledge of the documents contained in the package.
    Location and Time: Public bid reading will begin at 9 a.m., 
Wednesday, March 28, 2001, in the Sheraton New Orleans Hotel (Armstrong 
Ballroom, 8th floor), 500 Canal Street, New Orleans, Louisiana. All 
times referred to in this document are local New Orleans time.
    Filing of Bids: Bidders must submit sealed bids to the Regional 
Director (RD), MMS Gulf of Mexico Region, 1201 Elmwood Park Boulevard, 
New Orleans, Louisiana 70123-2394, between 8 a.m. and 4 p.m., prior to 
the Bid Submission Deadline of 10 a.m., Tuesday, March 27, 2001. If the 
bids are mailed, mark on the envelope containing all the sealed bids 
the following: Attention: Mr. John Rodi, Contains Sealed Bids for Sale 
178, Part 1. 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 27, 2001. 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.

Areas Offered for Leasing

    The MMS is offering for leasing all blocks and partial blocks 
listed in the document ``Blocks Available for Leasing in Gulf of Mexico 
OCS Oil and Gas Lease Sale 178, Part 1'' included in the Sale Notice 
Package. All of these blocks are shown on the following Leasing Maps 
and Official Protraction Diagrams (which may be purchased from the MMS 
Gulf of Mexico Regional Office Public Information Unit).

Outer Continental Shelf Leasing Maps--Louisiana Nos. 1 through 12: 
(These 30 maps sell for $2.00 each)

LA1  West Cameron Area (revised 09/01/99)
LA1A  West Cameron Area, West Addition (revised 05/30/97)
LA1B  West Cameron Area, South Addition (revised 05/30/97)
LA2  East Cameron Area (revised 09/01/99)
LA2A  East Cameron Area, South Addition (revised 09/01/99)
LA3  Vermilion Area (revised 09/01/99)
LA3A  South Marsh Island Area (revised 09/01/99)
LA3B  Vermilion Area, South Addition (revised 09/01/99)
LA3C  South Marsh Island Area, South Addition (revised 09/01/99)
LA3D  South Marsh Island Area, North Addition (revised 09/01/99)
LA4  Eugene Island Area (revised 09/01/99)
LA4A  Eugene Island Area, South Addition (revised 09/01/99)
LA5  Ship Shoal Area (revised 09/01/99)
LA5A  Ship Shoal Area, South Addition (revised 09/01/99)
LA6  South Timbalier Area (revised 09/01/99)
LA6A  South Timbalier Area, South Addition (revised 09/01/99)
LA6B  South Pelto Area (revised 09/01/99)
LA6C  Bay Marchand Area (revised 12/30/94)
LA7  Grand Isle Area (revised 09/01/99)
LA7A  Grand Isle Area, South Addition (revised 09/01/99)
LA8  West Delta Area (revised 09/01/99)
LA8A  West Delta Area, South Addition (revised 09/01/99)
LA9  South Pass Area (revised 09/01/99)
LA9A  South Pass Area, South and East Addition (revised 09/01/99)
LA10  Main Pass Area (revised 09/01/99)
LA10A  Main Pass Area, South and East Addition (revised 09/01/99)
LA10B  Breton Sound Area (revised 09/01/99)
LA11  Chandeleur Area (revised 09/01/99)
LA11A  Chandeleur Area, East Addition (revised 09/01/99)
LA12  Sabine Pass Area (revised 05/30/97)

Outer Continental Shelf Official Protraction Diagrams: (These diagrams 
sell for $2.00 each)

NG15-03  Green Canyon (revised 09/01/99)
NG15-06  Walker Ridge (revised 09/01/99)
NG15-09  Amery Terrace (revised 10/25/00)
NG16-01  Atwater Valley (revised 09/01/99)
NG16-04  Lund (revised 09/01/99)
NG16-07  Lund South (revised 09/01/99)
NH15-12  Ewing Bank (revised 09/01/99)
NH16-04  Mobile (revised 09/01/99)
NH16-07  Viosca Knoll (revised 09/01/99)
NH16-10  Mississippi Canyon (revised 05/01/96)


    Note: A CD-ROM (in ARC/INFO format) containing all of the Gulf 
of Mexico Leasing Maps and Official Protraction Diagrams, except for 
those not yet revised to digital format, is available from the MMS 
Gulf of Mexico Regional Office Public Information Unit for a price 
of $15.00. Only Amery Terrace (NG15-09) in the Central Gulf is not 
available on the CD-ROM. The Leasing Maps and Official Protraction 
Diagrams are also available on our Internet site. See also 65 FR 
2191, published on January 13, 2000, and 65 FR 67016, published on 
November 8, 2000, for the current status of all Gulf of Mexico 
Leasing Maps and Official Protraction Diagrams.


    All blocks are shown on these Leasing Maps and Official Protraction 
Diagrams. The available Federal acreage of all whole and partial blocks 
in this sale is shown in the document ``List of Blocks

[[Page 11525]]

Available for Leasing, Sale 178, Part 1'' included in the Sale Notice 
Package. Some of these blocks 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 found in the document titled ``Central Gulf of Mexico 
Lease Sale 178, Part 1, Unleased Split Blocks and Unleased Acreage of 
Blocks with Aliquots and Irregular Portions Under Lease,'' included in 
the Sale Notice Package.

Areas Not Available for Leasing

    The following blocks in the Central Gulf of Mexico Planning Area 
are not available for leasing: Blocks currently under lease; 
Mississippi Canyon Block 474, which is under consideration for use as 
the host location to develop several existing leases termed the 
``NaKika Project'; Viosca Knoll Block 69 (lease termination is 
currently under appeal); and the following blocks which are beyond the 
United States Exclusive Economic Zone in the area known as the Northern 
Portion of the Eastern Gap are deferred from leasing in this sale by 
the Department of the Interior: Lund South (Area NG16-07) Blocks 172, 
173, 213 through 217, 252 through 261, 296 through 305, 349; and the 
following blocks which are beyond the United States Exclusive Economic 
Zone in the area known as the Northern Portion of the Western Gap are 
deferred from leasing in this sale by the Department of the Interior 
but are under consideration to be offered in a Sale 178, Part 2, in 
August 2001: Amery Terrace (Area NG15-09) Blocks 133 through 135, 177 
through 184, 221 through 238, 265 through 281, 309 through 320, 355 
through 359.

Leasing Terms and Conditions

    Primary lease terms, primary lease term extensions, minimum bids, 
annual rental rates, royalty rates, and royalty suspension areas are 
shown on the map ``Lease Terms and Economic Conditions, Sale 178, Part 
1, Final'' for leases resulting from this sale:
    Primary lease terms: 5 years for blocks in water depths of less 
than 400 meters; 8 years for blocks in water depths of 400 to 799 
meters; and 10 years for blocks in water depths of 800 meters or 
deeper;
    Primary lease term extensions: Extensions may be granted for 
eligible blocks in water depths less than 400 meters as specified in 
Notice To Lessees and Operators (NTL) 2000-G22, effective December 22, 
2000;
    Minimum bids: $25 per acre or fraction thereof for blocks in water 
depths of less than 800 meters and $37.50 per acre or fraction thereof 
for blocks in water depths of 800 meters or deeper;
    Annual rental rates: $5 per acre or fraction thereof for blocks in 
water depths of less than 200 meters and $7.50 per acre or fraction 
thereof for blocks in water depths of 200 meters or deeper, to be paid 
on or before the first day of each lease year until a discovery in 
paying quantities of oil or gas is made, then at the expiration of each 
lease year until the start of royalty-bearing production;
    Royalty rates: 16\2/3\ percent royalty rate for blocks in water 
depths of less than 400 meters and a 12\1/2\ percent royalty rate for 
blocks in water depths of 400 meters or deeper, except during periods 
of royalty suspension, to be paid monthly on the last day of the month 
next following the month in which the production is obtained;
    Minimum royalty: After the start of royalty-bearing production: $5 
per acre or fraction thereof per year for blocks in water depths of 
less than 200 meters and $7.50 per acre or fraction thereof per year 
for blocks in water depths of 200 meters or deeper, to be paid at the 
expiration of each lease year;
    Royalty Suspension Areas: We are offering leases in this sale 
subject to the new final regulations in 30 CFR Part 260, published in 
February 2001. Royalty suspension will apply for blocks in water depths 
less than 200 meters where new deep gas (15,000 feet or greater subsea) 
is drilled and commences production within the initial primary 5-year 
lease term, and in water depths of 800 meters or deeper (for oil and 
gas); see the map titled ``Lease Terms and Economic Conditions, Sale 
178, Part 1, Final'' for specific areas. See the document contained 
within the Sale 178, Part 1, Final Notice Package titled ``Royalty 
Suspension Provisions, Sale 178, Part 1'' for the specific details 
regarding royalty suspension eligibility and implementation.
    The map titled ``Stipulations and Deferred Blocks, Sale 178, Part 
1, Final'' depicts the blocks where four lease stipulations apply: 1. 
Topographic Features, 2. Live Bottoms, 3. Military Areas, and 4. Blocks 
South of Baldwin County, Alabama. The texts of the stipulations are 
contained in the document ``Lease Stipulations for Oil and Gas Lease 
Sale 178, Part 1, Final'' included in the Final Sale Notice Package. 
Also shown on this map are the deferred blocks noted above.
    Rounding: The following procedure must be used to calculate minimum 
bid, rental, and minimum royalty on blocks with fractional acreage: 
Round up to the next whole acre and multiply by the applicable dollar 
amount to determine the correct minimum bid, rental, or minimum 
royalty.


    Note: For the minimum bid only, if the calculation results in a 
decimal figure, round up to the next whole dollar amount (see next 
paragraph). The minimum bid calculation, including all rounding, is 
shown in the document ``List of Blocks Available for Leasing in 
Central Gulf of Mexico OCS Oil and Gas Sale 178, Part 1'' included 
in the Sale Notice Package.


    Method of Bidding: For each block bid upon, a bidder must submit a 
separate signed bid in a sealed envelope labeled ``Sealed Bid for Oil 
and Gas Lease Sale 178, Part 1, not to be opened until 9 a.m., 
Wednesday, March 28, 2001.'' 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.
    The MMS published a list of restricted joint bidders, which applies 
to this sale, in the Federal Register at 65 FR 59869, on October 6, 
2000. 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. 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 must be included on each bid 
(see the document ``Bid Form and Envelope'' contained in the Sale 
Notice Package).
    Bid Deposit: Submitters of high bids must deposit the \1/5\th bonus 
by using electronic funds transfer (EFT) procedures, following the 
detailed instructions contained in the document ``Instructions for 
Making EFT Bonus Payments'' included in the Sale Notice Package. All 
payments must be electronically deposited into an interest-bearing 
account in the U.S. Treasury (account specified in the EFT 
instructions) during the period the bids

[[Page 11526]]

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.


    Note: Certain bid submitters (i.e., those that do NOT currently 
own or operate an OCS mineral lease OR those that have ever 
defaulted on a \1/5\th bonus payment (EFT or otherwise)) are 
required to guarantee (secure) their \1/5\th bonus payment. For 
those who must secure the EFT \1/5\th bonus payment, one of the 
following options may be used: 1. Provide a third-party guaranty; 2. 
Amend Development Bond Coverage; 3. Provide a Letter of Credit; or 
4. Provide a lump sum payment via EFT prior to the sale. The EFT 
instructions specify the requirements for each option.


    Withdrawal of Blocks: The United States reserves the right to 
withdraw any block from this sale prior to issuance of a written 
acceptance of a bid for the block.
    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 block will be awarded to any bidder, 
unless the bidder has complied with all requirements of this Notice, 
including the documents contained in the associated Sale Notice Package 
and applicable regulations; the bid is the highest valid bid; and the 
amount of the bid has been determined to be adequate by the authorized 
officer. 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, high bids will be evaluated in accordance with MMS bid adequacy 
procedures. A copy of the current procedures, ``Modifications to the 
Bid Adequacy Procedures'' (64 FR 37560 of July 12, 1999), effective 
July 1, 1999, is available from the MMS Gulf of Mexico Regional Office 
Public Information Unit.
    Successful Bidders: As required by MMS, each company that has been 
awarded a lease must execute all 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. Each bidder 
in a successful high bid must have on file, in the MMS Gulf of Mexico 
Regional Office Adjudication Unit, a currently valid certification 
(Debarment Certification Form) certifying that the bidder 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 Debarment Certification 
Form is contained in the Sale Notice Package.
    Affirmative Action: The MMS requests that 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), be on file in the MMS Gulf of Mexico Regional Office 
Adjudication Unit prior to bidding. In any event, these forms are 
required to be on file in the MMS Gulf of Mexico Regional Office 
Adjudication Unit prior to execution of any lease contract. Bidders 
must also comply with the requirements of 41 CFR 60.
    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.

    Dated: February 16, 2001.
Thomas R. Kitsos,
Acting Director, Minerals Management Service.
Piet deWitt,
Acting Assistant Secretary, Land and Minerals Management.
[FR Doc. 01-4491 Filed 2-22-01; 8:45 am]
BILLING CODE 4310-MR-P