[Federal Register Volume 66, Number 208 (Friday, October 26, 2001)]
[Notices]
[Pages 54277-54279]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-27032]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service


Outer Continental Shelf, Eastern Gulf of Mexico, Oil and Gas 
Lease Sale 181

AGENCY: Minerals Management Service, Interior.

ACTION: Final notice of sale 181.

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SUMMARY: On December 5, 2001, the Minerals Management Service will open 
and publicly announce bids received for blocks offered in Sale 181, 
Eastern Gulf of Mexico, pursuant to the Outer Continental Shelf 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 181 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 ``Final Notice of Sale 181 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, December 5, 
2001, in the Versailles Ballroom of the Riverside Hilton Hotel, 2 
Poydras 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, MMS Gulf 
of Mexico Region, 1201 Elmwood Park Boulevard, New Orleans, Louisiana 
70123-2394, between 8 a.m. and 4 p.m. on normal working days, prior to 
the Bid Submission Deadline at 10 a.m., Tuesday, December 4, 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 181

    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, 
December 4, 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 the blocks listed in the 
document ``List of Blocks Available for Leasing, Sale 181'' included in 
the Final Sale Notice Package. All of these blocks lie west of 
87 deg.30' West Longitude and are more than 100 miles south of Alabama. 
See the map in the Final Sale Notice Package: ``Lease Terms, Economic 
Conditions, Stipulations, and Deferred Blocks, Final''. All of these 
blocks are shown on the following Official Protraction Diagrams (which 
may be purchased from the MMS Gulf of Mexico Regional Office Public 
Information Unit).
    Outer Continental Shelf Official Protraction Diagrams. These 
diagrams sell for $2.00 each:

NG16-02 Lloyd Ridge (revised November 1, 2000)
NH16-11 De Soto Canyon (revised November 1, 2000)

    Note: A CD-ROM (in ARC/INFO and Acrobat (.pdf) formats) 
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. The Leasing Maps and 
Official Protraction Diagrams are also available on our Internet 
site. See also 66 FR 28002, published on May 21, 2001, for the 
current status of Central and Western Gulf of Mexico Leasing Maps 
and Official Protraction Diagrams.

Acreage of all blocks is shown on these Official Protraction Diagrams. 
The available Federal acreage of all blocks in this sale is shown in 
the document ``List of Blocks Available for Leasing, Sale 181" included 
in the Final Sale Notice Package.

Areas Not Available for Leasing

    The following blocks west of 87 deg.30" West Longitude and more 
than 100 miles south of Alabama in the Sale 181 area are not available 
for leasing:
    Blocks currently under lease:

De Soto Canyon Blocks 133, 177, 446, 447, 622, 666, 793, 794, 837, 838, 
840, 883, 927, 929, 970, 971
Lloyd Ridge Blocks 1, 2, 133, 134, 136, 267, 268

Leasing Terms and Conditions

    Primary lease terms, minimum bids, annual rental rates, royalty 
rates, and royalty suspension areas are shown on the map ``Lease Terms, 
Economic Conditions, Stipulations, and Deferred Blocks, Final'' for 
leases resulting from this sale:
    Primary lease terms: 10 years;
    Minimum bids: $37.50 per acre;
    Annual rental rates: $7.50 per acre, 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: 12\1/2\ percent, 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: 
$7.50 per acre per year, to be paid at the expiration of each lease 
year;
    Royalty Suspension Areas: All leases in this sale are being offered 
subject to

[[Page 54278]]

the regulations in 30 CFR part 260, published in the Federal Register 
at 66 FR 11512 on February 23, 2001. Royalty suspension per lease of 12 
million barrels of oil equivalent will apply to all leases in this sale 
(for oil and gas). Supplemental royalty relief may be available for 
leases in this area in accordance with 30 CFR part 203. [See the 
document contained within the Sale 181, Final Sale Notice Package 
titled ``Royalty Suspension Provisions, Sale 181'' for the specific 
details regarding royalty suspension eligibility and implementation.]
    Stipulations: Four lease stipulations (Military Areas, Evacuation, 
Coordination, and Marine Protected Species) will apply to all leases 
resulting from this sale. The texts of the stipulations are contained 
in the document ``Lease Stipulations for Oil and Gas Lease Sale 181, 
Final'' included in the Final Sale Notice Package.

Rounding

    The following procedure must be used to calculate minimum bid, 
rental, and minimum royalty. 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, Sale 181'' included in 
the Final 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 
181, not to be opened until 9 a.m., Wednesday, December 5, 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 
Final Sale Notice Package.
    The MMS published a list of restricted joint bidders, which applies 
to this sale, in the Federal Register at 66 FR 52150, on October 12, 
2001. 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 1/5th 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 Final Sale 
Notice Package).

Bid Deposit

    Submitters of high bids must deposit the 1/5th bonus by using 
electronic funds transfer procedures, following the detailed 
instructions contained in the document ``Instructions for Making EFT 
Bonus Payments'' included in the Final 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 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 submission of 
bids. 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 Final 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), is available from the MMS Gulf of 
Mexico Regional Office Public Information Unit and is also on our 
Internet site.

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 by EFT the balance of the cash bonus bid along with the 
first year's annual rental for each lease issued in accordance with the 
requirements of 30 CFR 218.155, and satisfy the bonding requirements of 
30 CFR part 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 Final 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 part 60.

[[Page 54279]]

Information to Lessees

    The Final 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.

Notice of Bidding Systems

    Section 8(a)(8) (43 U.S.C. 1337(a)(8)) of the Outer Continental 
Shelf Lands Act (OCSLA) requires that, at least 30 days before any 
lease sale, a Notice be submitted to Congress and published in the 
Federal Register. This Notice of Bidding Systems is for Sale 181, 
Eastern Gulf of Mexico, scheduled to be held in December 2001.
    In Sale 181, all blocks are being offered under a bidding system 
that uses a cash bonus and a fixed royalty of 12.5 with a royalty 
suspension volume of 12 million barrels of oil equivalent per lease. 
This bidding system is authorized under 30 CFR 260.110(a)(7), which 
allows use of a cash bonus bid with a royalty rate of not less than 
12.5 percent and with suspension of royalties for a period, volume, or 
value of production, and an annual rental. Analysis performed by the 
MMS indicates that use of this system provides an incentive for 
development of this area while ensuring that a fair sharing of revenues 
will result if major discoveries are made and produced.
    Specific provisions for Sale 181 are contained in the document 
``Royalty Suspension Provisions, Sale 181'' and a map ``Lease Terms, 
Economic Conditions, Stipulations and Deferred Blocks, Final'' 
depicting blocks and applicable royalty suspension volumes. Both 
documents are included in the Sale Notice Package.

    Dated: October 23, 2001.
Thomas R. Kitsos,
Acting Director, Minerals Management Service.
[FR Doc. 01-27032 Filed 10-25-01; 8:45 am]
BILLING CODE 4310-MR-P