[Federal Register Volume 68, Number 137 (Thursday, July 17, 2003)]
[Notices]
[Page 42420]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-18139]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service


Notice of Proposed Intent To Reduce Minimum Bid Requirements and 
Set Sliding-Scale Rentals for Proposed Beaufort Sea Outer Continental 
Shelf (OCS) Oil and Gas Lease Sale 186

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Notice of proposed intent to reduce minimum bid levels and set 
sliding-scale rentals for OCS sale 186.

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SUMMARY: On February 20, 2003, the MMS published a Notice of 
Availability (68 FR 8306) of the proposed Notice of Sale for Sale 186, 
which included lease terms and conditions providing for a minimum bid 
amount of $62 per hectare and a rental rate of $13 per hectare, 
consistent with past OCS sales in the Alaska Region. After further 
consideration, the MMS has tentatively determined that the minimum bid 
levels for Sale 186 should be reduced and rentals set on a sliding 
scale. The MMS is announcing this proposed action at this time to give 
potential bidders and other interested parties ample time to consider 
these changes in preparing for the lease sale. This proposed change in 
the financial terms and conditions of the proposed sale does not affect 
minimum royalty requirements, royalty suspension volumes, size, timing, 
location, or potential impacts of the sale. The final Notice of Sale 
will establish all terms and conditions for Sale 186 and will be issued 
at least 30 days before the sale is held. Anyone wishing to comment 
should send comments by August 1, 2003 to the Alaska OCS Region, 949 
East 36th Avenue, 3rd Floor, Anchorage, Alaska 99508-4302.

DATES: Beaufort Sea OCS Lease Sale 186 is scheduled for September 24, 
2003.

ADDRESSES: The proposed Notice of Sale and associated documents are 
available at: Alaska OCS Region, Information Resource Center, Minerals 
Management Service, 949 East 36th Avenue, Room 330, Anchorage, Alaska 
99508-4302, Telephone: (907) 271-6438 or 1-800-764-2627.

SUPPLEMENTARY INFORMATION: The MMS proposes to apply the minimum bid 
amounts and rental rates in the table presented below for Sale 186. 
Refer to the February 2003 proposed Notice of Sale for descriptions of 
Zones A and B.

                 Table of Minimum Bids and Rental Rates
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            Terms (values per hectare)                Zone A     Zone B
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Minimum Bid.......................................     $37.50     $25.00
Rental Rates:
  Year 1..........................................      $7.50      $2.50
  Year 2..........................................       7.50       3.75
  Year 3..........................................       7.50       5.00
  Year 4..........................................       7.50       6.25
  Year 5..........................................       7.50       7.50
  Year 6..........................................      12.00      10.00
  Year 7..........................................      17.00      12.00
  Year 8..........................................      22.00      15.00
  Year 9..........................................      30.00      17.00
  Year 10.........................................      30.00      20.00
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    The new bidding requirements outlined above are designed in part to 
provide potential bidders the incentive to acquire sufficient acreage 
to support a timely seismic data acquisition program. The revised 
sliding-scale rental terms are intended to encourage expeditious 
exploration of domestic energy resources. In Zone A, which we believe 
holds the most promise for near term development and production of oil 
resources, the minimum bid and rentals are set slightly above those for 
Zone B. We set the terms in Zone B similar to those used by the State 
of Alaska for some leases in the northern portion of the state as well 
as to the terms used by the Bureau of Land Management for the leasing 
of less prospective acreage in the National Petroleum Reserve--Alaska. 
Hence, the revised terms presented here will allow the Federal offshore 
lease offering to be comparable to other sales in this area. We have 
determined that these new proposed terms will not increase the level or 
range of oil and gas development activities contemplated and addressed 
in the Final Environmental Impact Statement or the Coastal Zone 
Management Act consistency determination.
    The MMS is required to assure that fair market value is received 
for all OCS lands leased and rights conveyed. Although we are proposing 
to change the minimum bid and rental requirements, all bids received in 
Sale 186 will undergo an extensive evaluation to determine if they 
represent fair market value. Thus, regardless of the minimum bid level, 
the high bid received for any block must satisfy the bid adequacy 
criteria established by the MMS for a lease to be awarded. Note that 
this change in terms is intended to apply only to Sale 186 and does not 
necessarily represent a general policy change for future Alaska or 
other OCS lease sales. In accordance with the 5-Year OCS Oil and Gas 
Leasing Program for 2002-2007, minimum bids and rental rates are 
considered on a sale-by-sale basis.

Johnnie Burton,
Director, Minerals Management Service.
[FR Doc. 03-18139 Filed 7-16-03; 8:45 am]
BILLING CODE 4310-MR-P