[Federal Register Volume 73, Number 159 (Friday, August 15, 2008)]
[Notices]
[Pages 47969-47980]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-18963]
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DEPARTMENT OF THE INTERIOR
Minerals Management Service
[Docket No. MMS-2008-MRM-0031]
Agency Information Collection Activities: Proposed Collection,
Comment Request
AGENCY: Minerals Management Service (MMS), Interior.
ACTION: Notice of an extension of a currently approved information
collection (OMB Control Number 1010-0136).
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SUMMARY: To comply with the Paperwork Reduction Act of 1995 (PRA), we
are inviting comments on a collection of information that we will
submit to the Office of Management and Budget (OMB) for review and
approval. This information collection request (ICR) pertains to
valuation of oil and gas produced from Federal onshore and offshore
leases. We changed the title of this ICR to meet OMB requirements and
to reflect the consolidation of two ICRs relating to Federal oil and
gas valuation. The new title of this ICR is ``30 CFR Parts 202, 204,
and 206, Federal Oil and Gas Valuation.'' In this extension, we are
consolidating the following ICRs, which allows programwide review of
Federal oil and gas leases:
1010-0136, previously titled ``30 CFR Part 202--Royalties,
Subpart C--Federal and Indian Oil and Subpart D--Federal Gas; and Part
206--Product Valuation, Subpart C--Federal Oil and Subpart D--Federal
Gas;'' and
1010-0155, previously titled ``30 CFR Part 204--
Alternatives for Marginal Properties, Subpart C--Accounting and
Auditing Relief.''
DATES: Submit written comments on or before October 14, 2008.
ADDRESSES: You may submit comments by the following methods:
Electronically go to http://www.regulations.gov. In the
``Comment or Submission'' column, enter ``MMS-2008-MRM-0031'' to view
supporting and related materials for this ICR. Click on ``Send a
comment or submission'' link to submit public comments. Information on
using Regulations.gov, including instructions for accessing documents,
submitting comments, and viewing the docket after the close of the
comment period, is available through the site's ``User Tips'' link. All
comments submitted will be posted to the docket.
Mail comments to Hyla Hurst, Regulatory Specialist,
Minerals Management Service, Minerals Revenue Management, P.O. Box
25165, MS 302B2, Denver, Colorado 80225. Please reference ICR 1010-0136
in your comments.
Hand-carry comments or use an overnight courier service.
Our courier address is Building 85, Room A-614, Denver Federal Center,
West 6th Ave. and Kipling Blvd., Denver, Colorado 80225. Please
reference ICR 1010-0136 in your comments.
FOR FURTHER INFORMATION CONTACT: Hyla Hurst, telephone (303) 231-3495,
or e-mail [email protected]. You may also contact Hyla Hurst to obtain
copies, at no cost, of (1) the ICR, (2) any associated forms, and (3)
the regulations that require the subject collection of information.
SUPPLEMENTARY INFORMATION:
Title: 30 CFR Parts 202, 204, and 206, Federal Oil and Gas
Valuation.
OMB Control Number: 1010-0136.
Bureau Form Number: Form MMS-4393.
Abstract: The Secretary of the U.S. Department of the Interior is
responsible for mineral resource development on Federal and Indian
lands and the Outer Continental Shelf (OCS). Under the Mineral Leasing
Act (30 U.S.C. 1923), the Indian Mineral Development Act of 1982 (25
U.S.C. 2103), and the Outer Continental Shelf Lands Act (43 U.S.C.
1353), the Secretary is responsible for managing the production of
minerals from Federal and Indian lands and the OCS, collecting
royalties and other mineral revenues from lessees who produce minerals,
and distributing the funds collected in accordance with applicable
laws. The MMS performs the mineral revenue management functions for the
Secretary. Applicable public laws pertaining to mineral leases on
Federal and Indian lands are located at http://www.mrm.mms.gov/Laws_R_D/PublicLawsAMR.htm.
General Information
When a company or an individual enters into a lease to explore,
develop, produce, and dispose of minerals from Federal or Indian lands,
that company or individual agrees to pay the lessor a share in an
amount or value of production from the leased lands. The lessee is
required to report various kinds of information to the lessor relative
to the disposition of the leased minerals. Such information is
generally available within the records of the lessee or others involved
in developing, transporting, processing, purchasing, or selling of such
minerals.
We use the information collected in this ICR to ensure that royalty
is accurately valued and appropriately paid on oil and gas produced
from
[[Page 47970]]
Federal onshore and offshore leases. Please refer to the chart for all
reporting requirements and associated burden hours. All data submitted
is subject to subsequent audit and adjustment.
Valuation Regulations
The valuation regulations at 30 CFR part 206, subparts C and D,
require companies to collect and/or submit information used to value
their Federal oil and gas, including transportation and processing
allowance limit information. This is accomplished on Form MMS-2014,
Report of Sales and Royalty Remittance (OMB Control Number 1010-0140,
expires November 30, 2009). The information requested is the minimum
necessary to carry out our mission and places the least possible burden
on respondents. If the information is not collected, a loss of
royalties may result for both Federal and state governments.
Transportation and Processing Regulatory Allowance Limits
The reasonable, actual costs of transportation and processing may
be deducted from Federal royalties.
Regulatory Allowance Limit for Transportation
Under certain circumstances, lessees are authorized to deduct from
royalty payments the reasonable, actual costs of transporting the
royalty portion of produced oil and gas from the lease to a processing
or sales point not in the immediate lease area. For oil and gas,
regulations establish the allowable limit on transportation allowance
deductions at 50 percent of the value of the oil or gas at the point of
sale.
Regulatory Allowance Limit for Processing
When gas is processed for the recovery of gas plant products,
lessees may claim a processing allowance. Regulations establish the
allowable limit on processing allowance deductions at 66\2/3\ percent
of the value of each gas plant product.
Request to Exceed Regulatory Allowance Limitation, Form MMS-4393
Lessees may request to exceed regulatory limitations. Upon proper
application from the lessee, we may approve an oil or gas
transportation allowance in excess of 50 percent or a gas processing
allowance in excess of 66\2/3\ percent on Federal leases. To request
permission to exceed a regulatory allowance limit, lessees must submit
a letter to MMS explaining why a higher allowance limit is necessary
and provide supporting documentation, including a completed Form MMS-
4393. This form provides us with the data necessary to identify the
properties and time periods for which the lessee is requesting to
exceed the regulatory limits.
Accounting and Auditing Relief for Marginal Properties
We amended our regulations in 2004 to provide guidance to lessees
and designees seeking accounting and auditing relief for Federal
marginal properties. There are two types of relief: (1) cumulative
royalty reports and payments relief; and (2) other relief. Under 30 CFR
204.202, MMS requires notification from lessees who request to take the
cumulative royalty reporting and payment relief option. Under 30 CFR
204.203, MMS requires a relief request from lessees who want to obtain
any other type of accounting and auditing relief.
A state may decide in advance if it will allow either or both
relief options for each particular year. After consulting with the
state concerned, we will approve, deny, or modify requests in writing.
Under the regulations, both MMS and the state concerned must approve
any accounting and auditing relief granted for a marginal property.
OMB Approval
We are requesting OMB approval to continue to collect this
information. Not collecting this information would limit the
Secretary's ability to discharge his/her duties and may also result in
loss of royalty payments. Proprietary information submitted to MMS
under this collection is protected, and no items of a sensitive nature
are included in this information collection.
For information collections relating to valuation requirements,
responses are mandatory. For the remaining information collections in
this ICR, responses are voluntary; only those lessees who request
approval to exceed the regulatory limits on transportation and
processing allowances or to obtain the benefits of accounting and
auditing relief for marginal properties must supply this information.
Frequency of Response: Annually and on occasion.
Estimated Number and Description of Respondents: 102 Federal
lessees/designees and 4 states.
Estimated Annual Reporting and Recordkeeping ``Hour'' Burden:
21,055 hours.
We have not included in our estimates certain requirements
performed in the normal course of business and considered usual and
customary. The following chart shows the estimated burden hours by CFR
section and paragraph:
Respondents' Estimated Annual Burden Hours
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Average number
Citation 30 CFR 202 and 206 Reporting and recordkeeping Hour burden of annual Annual burden
requirement responses hours
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PART 202S--ROYALTIES
Subpart C--Federal and Indian Oil
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Sec. 202.101 Standards for reporting and paying royalties.
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202.101...................... 202.101 Oil volumes are to be Burden covered under OMB Control Number 1010-
reported in barrels of clean oil 0140 (expires 11/30/2009).
of 42 standard U.S. gallons (231
cubic inches each) at 60 [deg]F,
* * *.
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Subpart D--Federal Gas
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Sec. 202.152 Standards for reporting and paying royalties on gas.
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202.152(a) and (b)........... 202.152(a)(1) If you are Burden covered under OMB Control Number 1010-
responsible for reporting 0140.
production or royalties you
must:
[[Page 47971]]
(i) Report gas volumes and
British thermal unit (Btu)
heating values, if applicable,
under the same degree of water
saturation;
(ii) Report gas volumes in units
of 1,000 cubic feet (mcf); and
(iii) Report gas volumes and Btu
heating value at a standard
pressure base of 14.73 pounds
per square inch absolute (psia)
and a standard temperature base
of 60 [deg]F. * * *
(b) Residue gas and gas plant
product volumes shall be
reported as specified in this
paragraph. * * *
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PART 204--ALTERNATIVES FOR MARGINAL PROPERTIES
Subpart C--Accounting and Auditing Relief
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Sec. 204.202 What is the cumulative royalty reports and payments relief option?
----------------------------------------------------------------------------------------------------------------
204.202(b)(1)................ 204.202(b) To use the cumulative 40 1 40
royalty reports and payments
relief option, you must do all
of the following:
(1) Notify MMS in writing by
January 31 of the calendar year
for which you begin taking your
relief. * * *
-----------------------------------------------
204.202(b)(2)................ 204.202(b)(2) Submit your royalty Burden covered under OMB Control Number 1010-
report and payment * * *by the 0140.
end of February of the year
following the calendar year for
which you reported annually. * *
* If you have an estimated
payment on file, you must submit
your royalty report and payment
by the end of March of the year
following the calendar year for
which you reported annually;
-----------------------------------------------
(3) Use the sales month prior to
the month that you submit your
annual report and payment * * *
for the entire previous calendar
year's production for which you
are paying annually. * * *
-----------------------------------------------
204.202(b)(4), (b)(5), (c), 204.202(b) To use the cumulative Burden covered under OMB Control Number 1010-
(d)(1), (d)(2), (e)(1), and royalty reports and payments 0140.
(e)(2). relief option, you must * * *
-----------------------------------------------
(4) Report one line of cumulative
royalty information on Form MMS-
2014 for the calendar year * * *
and
(5) Report allowances on Form MMS-
2014 on the same annual basis as
the royalties for your marginal
property production.
(c) If you do not pay your
royalty by the date due in
paragraph (b) of this section,
you will owe late payment
interest * * * from the date
your payment was due under this
section until the date MMS
receives it. * * *
(e) If you dispose of your
ownership interest in a marginal
property for which you have
taken relief * * * you must:
(1) Report and pay royalties for
the portion of the calendar year
for which you had an ownership
interest; and
(2) Make the report and payment
by the end of the month after
you dispose of the ownership
interest in the marginal
property. If you do not report
and pay timely, you will owe
interest * * * from the date the
payment was due. * * *
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Sec. 204.203 What is the other relief option?
----------------------------------------------------------------------------------------------------------------
204.203(b)................... 204.203(b) You must request 200 1 200
approval from MMS * * * before
taking relief under this option.
----------------------------------------------------------------------------------------------------------------
Sec. 204.205 How do I obtain accounting and auditing relief?
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204.205(a) and (b)........... 204.205(a) To take cumulative Burden covered under Sec. 204.203(b).
reports and payments relief
under Sec. 204.202, you must
notify MMS in writing by January
31 of the calendar year for
which you begin taking your
relief. * * *
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[[Page 47972]]
(b) To obtain other relief under
Sec. 204.203, you must file a
written request for relief with
MMS. * * *
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Sec. 204.206 What will MMS do when it receives my request for other relief?
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204.206(a)(3)(i) and (b)(1).. 204.206 When MMS receives your Burden covered under Sec. 204.203(b).
request for other relief under
Sec. 204.205(b), it will
notify you in writing as
follows:
-----------------------------------------------
(a) If your request for relief is
complete, MMS may either
approve, deny, or modify your
request in writing after
consultation with any State. * *
*
(3) If MMS modifies your relief
request, MMS will notify you of
the modifications.
(i) You have 60 days from your
receipt of MMS's notice to
either accept or reject any
modification(s) in writing. * *
*
(b) If your request for relief is
not complete, MMS will notify
you in writing. * * *
(1) You must submit the missing
information within 60 days of
your receipt of MMS's notice. *
* *
----------------------------------------------------------------------------------------------------------------
Sec. 204.208 May a State decide that it will or will not allow one or both of the relief options under this
subpart?
----------------------------------------------------------------------------------------------------------------
204.208(c)(1) and (d)(1)..... 204.208(c) If a State decides * * 40 4 160
* that it will or will not allow
one or both of the relief
options * * * within 30 days * *
* the State must:
(1) Notify the Associate Director
for Minerals Revenue Management,
MMS, in writing, of its intent
to allow or not allow one or
both of the relief options. * *
*
(d) If a State decides in advance
* * * that it will not allow one
or both of the relief options *
* * the State must:
(1) Notify the Associate Director
for Minerals Revenue Management,
MMS, in writing, of its intent
to allow one or both of the
relief options. * * *
----------------------------------------------------------------------------------------------------------------
Sec. 204.209 What if a property ceases to qualify for relief obtained under this subpart?
----------------------------------------------------------------------------------------------------------------
204.209(b)................... 204.209(b) If a property is no 6 1 6
longer eligible for relief * * *
the relief for the property
terminates as of December 31 of
that calendar year. You must
notify MMS in writing by
December 31 that the relief for
the property has terminated. * *
*
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Sec. 204.210 What if a property is approved as part of a nonqualifying agreement?
----------------------------------------------------------------------------------------------------------------
204.210(c) and (d)........... 204.210(c) * * * the volumes on Burden covered under OMB Control Number 1010-
which you report and pay royalty 0140.
* * * must be amended to reflect
all volumes produced on or
allocated to your lease under
the nonqualifying agreement as
modified by BLM. * * * Report
and pay royalties for your
production using the procedures
in Sec. 204.202(b).
-----------------------------------------------
(d) If you owe additional
royalties based on the
retroactive agreement approval
and do not pay your royalty by
the date due in Sec.
204.202(b), you will owe late
payment interest determined
under 30 CFR 218.54 from the
date your payment was due under
Sec. 204.202(b)(2) until the
date MMS receives it.
----------------------------------------------------------------------------------------------------------------
Sec. 204.214(b) Is minimum royalty due on a property for which I took relief?
----------------------------------------------------------------------------------------------------------------
204.214(b)(1) and (b)(2)..... 204.214(b) If you pay minimum Burden covered under OMB Control Number 1010-
royalty on production from a 0140.
marginal property during a
calendar year for which you are
taking cumulative royalty
reports and payment relief, and:
-----------------------------------------------
(1) The annual payment you owe
under this subpart is greater
than the minimum royalty you
paid, you must pay the
difference between the minimum
royalty you paid and your annual
payment due under this subpart;
or
[[Page 47973]]
(2) The annual payment you owe
under this subpart is less than
the minimum royalty you paid,
you are not entitled to a credit
because you must pay at least
the minimum royalty amount on
your lease each year.
----------------------------------------------------------------------------------------------------------------
PART 206--PRODUCT VALUATION
Subpart C--Federal Oil
----------------------------------------------------------------------------------------------------------------
Sec. 206.102 How do I calculate royalty value for oil that I or my affiliate sell(s) under an arm's-length
contract?
----------------------------------------------------------------------------------------------------------------
206.102(e)(1)................ 206.102(e) If you value oil under AUDIT PROCESS. See note.
paragraph (a) of this section:
(1) MMS may require you to
certify that your or your
affiliate's arm's-length
contract provisions include all
of the consideration the buyer
must pay, either directly or
indirectly, for the oil.
----------------------------------------------------------------------------------------------------------------
Sec. 206.103 How do I value oil that is not sold under an arm's-length contract?
----------------------------------------------------------------------------------------------------------------
206.103(a)................... 206.103 This section explains how 45 5 225
to value oil that you may not
value under Sec. 206.102 or
that elect under Sec.
206.102(d) to value under this
section. First determine whether
paragraph (a), (b), or (c) of
this section applies to
production from your lease, or
whether you may apply paragraph
(d) or (e) with MMS approval.
(a) Production from leases in
California or Alaska. Value is
the average of the daily mean
ANS spot prices published in any
MMS-approved publication during
the trading month most
concurrent with the production
month. * * *
(1) To calculate the daily mean
spot price. * * *
(2) Use only the days. * * *
(3) You must adjust the value. *
* *
206.103(a)(4)................ 206.103(a)(4) After you select an 8 2 16
MMS-approved publication, you
may not select a different
publication more often than once
every 2 years, * * *.
206.103(b)(1)................ 206.103(b) Production from leases 400 2 800
in the Rocky Mountain Region. *
* * (1) If you have an MMS-
approved tendering program, you
must value oil. * * *
206.103(b)(1)(ii)............ 206.103(b)(1)(ii) If you do not 400 2 800
have an MMS-approved tendering
program, you may elect to value
your oil under either paragraph
(b)(2) or (b)(3) of this
section. * * *
206.103(b)(4)................ 206.103(b)(4) If you demonstrate 400 2 800
to MMS's satisfaction that
paragraphs (b)(1) through (b)(3)
of this section result in an
unreasonable value for your
production as a result of
circumstances regarding that
production, the MMS Director may
establish an alternative
valuation method.
206.103(c)(1)................ 206.103(c) Production from leases 50 10 500
not located in California,
Alaska or the Rocky Mountain
Region. (1) Value is the NYMEX
price, plus the roll, adjusted
for applicable location and
quality differentials and
transportation costs under Sec.
206.112.
206.103(e)(1) and (2)........ 206.103(e) Production delivered 330 2 660
to your refinery and the NYMEX
price or ANS spot price is an
unreasonable value.
(1) * * * you may apply to the
MMS Director to establish a
value representing the market at
the refinery if: * * *.
(2) You must provide adequate
documentation and evidence
demonstrating the market value
at the refinery. * * *
----------------------------------------------------------------------------------------------------------------
Sec. 206.105 What records must I keep to support my calculations of value under this subpart?
----------------------------------------------------------------------------------------------------------------
206.105...................... 206.105 If you determine the Burden covered under OMB Control Number 1010-
value of your oil under this 0140.
subpart, you must retain all
data relevant to the
determination of royalty value.
* * *
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[[Page 47974]]
Sec. 206.107 How do I request a value determination?
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206.107(a)................... 206.107(a) You may request a 330 8 2,640
value determination from MMS. *
* *
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Sec. 206.109 When may I take a transportation allowance in determining value?
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206.109(c)(2)................ 206.109(c) Limits on 8 1 8
transportation allowances. (2)
You may ask MMS to approve a
transportation allowance in
excess of the limitation in
paragraph (c)(1) of this
section. * * * Your application
for exception (using Form MMS-
4393, Request to Exceed
Regulatory Allowance Limitation)
must contain all relevant and
supporting documentation
necessary for MMS to make a
determination. * * *
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Sec. 206.110 How do I determine a transportation allowance under an arm's-length transportation contract?
----------------------------------------------------------------------------------------------------------------
206.110(a)................... 206.110(a) * * * You must be able AUDIT PROCESS. See note.
to demonstrate that you or your
affiliate's contract is at arm's
length. * * *
-----------------------------------------------
206.110(d)(3)................ 206.110(d) If your arm's-length 330 2 660
transportation contract includes
more than one liquid product,
and the transportation costs
attributable to each product
cannot be determined. * * *
(3) You may propose to MMS a cost
allocation method. * * *
206.110(e)................... 206.110(e) If your arm's-length 330 1 330
transportation contract includes
both gaseous and liquid
products, and the transportation
costs attributable to each
product cannot be determined
from the contract, then you must
propose an allocation procedure
to MMS.
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206.110(e)(1) and (2)........ 206.110(e)(1) * * * If MMS Burden covered under OMB Control Number 1010-
rejects your cost allocation, 0140.
you must amend your Form MMS-
2014 * * *
-----------------------------------------------
(2) You must submit your initial
proposal, including all
available data, within 3 months
after first claiming the
allocated deductions on Form MMS-
2014.
206.110(g)(2)................ 206.110(g) If your arm's-length 330 1 330
sales includes a provision
reducing the contract price by a
transportation factor, * * *
(2) You must obtain MMS approval
before claiming a transportation
factor in excess of 50 percent
of the base price of the
product.
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Sec. 206.111 How do I determine a transportation allowance if I do not have an arm's-length transportation
contract or arm's-length tariff?
----------------------------------------------------------------------------------------------------------------
206.111(g)................... 206.111(g) To compute 330 1 330
depreciation, you may elect to
use either * * * After you make
an election, you may not change
methods without MMS approval. *
* *
206.111(k)(2)................ 206.111(k)(2) You may propose to 330 1 330
MMS a cost allocation method on
the basis of the values * * *
206.111(l)(1)................ 206.111(l)(1) Where you transport 330 1 330
both gaseous and liquid products
through the same transportation
system, you must propose a cost
allocation procedure to MMS.
-----------------------------------------------
206.111(l)(2)................ 206.111(l)(2) * * * If MMS Burden covered under OMB Control Number 1010-
rejects your cost allocation, 0140.
you must amend your Form MMS-
2104 for the months that you
used the rejected method and pay
any additional royalty and
interest due.
206.111(l)(3)................ 206.111(l)(3) You must submit Burden covered under Sec. 206.111(l)(1).
your initial proposal, including
all available data, within 3
months after first claiming the
allocated deductions on Form MMS-
2014.
----------------------------------------------------------------------------------------------------------------
Sec. 206.112 What adjustments and transportation allowances apply when I value oil production from my lease
using NYMEX prices or ANS spot prices?
----------------------------------------------------------------------------------------------------------------
206.112(a)(1)(ii)............ 206.112(a)(1)(ii) * * * under an 330 1 330
exchange agreement that is not
at arm's length, you must obtain
approval from MMS for a location
and quality differential. * * *
[[Page 47975]]
206.112(a)(1)(ii)............ 206.112(a)(1)(ii) * * * If MMS 330 2 660
prescribes a different
differential, you must apply. *
* * You must pay any additional
royalties owed * * * plus the
late payment interest from the
original royalty due date, or
you may report a credit. * * *
-----------------------------------------------
206.112(a)(3) and (4)........ 206.112(a)(3) If you transport or 330 4 1,320
exchange at arm's length (or
both transport and exchange) at
least 20 percent, but not all,
of your oil produced from the
lease to a market center,
determine the adjustment between
the lease and the market center
for the oil that is not
transported or exchanged (or
both transported and exchanged)
to or through a market center as
follows: * * *.
(4) If you transport or exchange
(or both transport and exchange)
less than 20 percent of your
crude oil produced from the
lease between the lease and a
market center, you must propose
to MMS an adjustment between the
lease and the market center for
the portion of the oil that you
do not transport or exchange (or
both transport and exchange) to
a market center. * * * If MMS
prescribes a different
adjustment. * * * You must pay
any additional royalties owed *
* * plus the late payment
interest from the original
royalty due date, or you may
report a credit. * * *
206.112(b)(3)................ 206.112(b)(3) * * * you may 330 4 1,320
propose an alternative
differential to MMS. * * * If
MMS prescribes a different
differential * * *. You must pay
any additional royalties owed *
* * plus the late payment
interest from the original
royalty due date, or you may
report a credit. * * *
206.112(c)(2)................ 206.112(c)(2) * * * If quality 330 2 660
bank adjustments do not
incorporate or provide for
adjustments for sulfur content,
you may make sulfur adjustments,
based on the quality of the
representative crude oil at the
market center, of 5.0 cents per
one-tenth percent difference in
sulfur content, unless MMS
approves a higher adjustment.
----------------------------------------------------------------------------------------------------------------
Sec. 206.114 What are my reporting requirements under an arm's-length transportation contract?
----------------------------------------------------------------------------------------------------------------
206.114...................... 206.114 You or your affiliate Burden covered under OMB Control Number 1010-
must use a separate entry on 0140.
Form MMS-2014 to notify MMS of
an allowance based on
transportation costs you or your
affiliate incur.
206.114...................... 206.114 MMS may require you or AUDIT PROCESS. See note.
your affiliate to submit arm's-
length transportation contracts,
production agreements, operating
agreements, and related
documents.
----------------------------------------------------------------------------------------------------------------
Sec. 206.115 What are my reporting requirements under a non-arm's-length transportation arrangement?
----------------------------------------------------------------------------------------------------------------
206.115(a)................... 206.115(a) You or your affiliate Burden covered under OMB Control Number 1010-
must use a separate entry on 0140.
Form MMS-2014 to notify MMS of
an allowance based on
transportation costs you or your
affiliate incur.
206.115(c)................... 206.115(c) MMS may require you or AUDIT PROCESS. See note.
your affiliate to submit all
data used to calculate the
allowance deduction. * * *
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Subpart D--Federal Gas
----------------------------------------------------------------------------------------------------------------
Sec. 206.152 Valuation standards-unprocessed gas.
----------------------------------------------------------------------------------------------------------------
206.152(b)(1)(i) and (iii)... 206.152(b)(1)(i) * * * The lessee AUDIT PROCESS. See note.
shall have the burden of
demonstrating that its contract
is arm's-length. * * *
-----------------------------------------------
(iii) * * * When MMS determines
that the value may be
unreasonable, MMS will notify
the lessee and give the lessee
an opportunity to provide
written information justifying
the lessee's value.
206.152(b)(2)................ 206.152(b)(2) * * * The lessee 330 1 330
must request a value
determination in accordance with
paragraph (g) of this section
for gas sold pursuant to a
warranty contract; * * *.
-----------------------------------------------
[[Page 47976]]
206.152(b)(3)................ 206.152(b)(3) MMS may require a AUDIT PROCESS. See note.
lessee to certify that its arm's-
length contract provisions
include all of the consideration
to be paid by the buyer, either
directly or indirectly, for the
gas.
206.152(e)(1)................ 206.152(e)(1) Where the value is Burden covered under OMB Control Number 1010-
determined pursuant to paragraph 0140.
(c) of this section, the lessee
shall retain all data relevant
to the determination of royalty
value. * * *
206.152(e)(2)................ 206.152(e)(2) Any Federal lessee AUDIT PROCESS. See note.
will make available upon request
to the authorized MMS or State
representatives, to the Office
of the Inspector General of the
Department of the Interior, or
other person authorized to
receive such information, arm's-
length sales and volume data for
like-quality production sold,
purchased or otherwise obtained
by the lessee from the field or
area or from nearby fields or
areas.
-----------------------------------------------
206.152(e)(3)................ 206.152(e)(3) A lessee shall 330 2 660
notify MMS if it has determined
value pursuant to paragraph
(c)(2) or (c)(3) of this
section. * * *
206.152(g)................... 206.152(g) The lessee may request 330 6 1,980
a value determination from MMS.
* * * The lessee shall submit
all available data relevant to
its proposal. * * *
----------------------------------------------------------------------------------------------------------------
Sec. 206.153 Valuation standards--processed gas.
----------------------------------------------------------------------------------------------------------------
206.153(b)(1)(i) and (iii)... 206.153(b)(1)(i) * * * The lessee
shall have the burden of
demonstrating that its contract
is arm's-length. * * *
-----------------------------------------------
(iii) * * * When MMS determines AUDIT PROCESS. See note.
that the value may be
unreasonable, MMS will notify
the lessee and give the lessee
an opportunity to provide
written information justifying
the lessee's value.
-----------------------------------------------
206.153(b)(2)................ 206.153(b)(2) * * * The lessee 330 1 330
must request a value
determination in accordance with
paragraph (g) of this section
for gas sold pursuant to a
warranty contract; * * *.
-----------------------------------------------
206.153(b)(3)................ 206.153(b)(3) MMS may require a AUDIT PROCESS. See note.
lessee to certify that its arm's-
length contract provisions
include all of the consideration
to be paid by the buyer, either
directly or indirectly, for the
residue gas or gas plant
product.
206.153(e)(1)................ 206.153(e)(1) Where the value is Burden covered under OMB Control Number 1010-
determined pursuant to paragraph 0140.
(c) of this section, the lessee
shall retain all data relevant
to the determination of royalty
value. * * *
206.153(e)(2)................ 206.153(e)(2) Any Federal lessee AUDIT PROCESS. See note.
will make available upon request
to the authorized MMS or State
representatives, to the Office
of the Inspector General of the
Department of the Interior, or
other persons authorized to
receive such information, arm's-
length sales and volume data for
like-quality residue gas and gas
plant products sold, purchased
or otherwise obtained by the
lessee from the same processing
plant or from nearby processing
plants.
-----------------------------------------------
206.153(e)(3)................ 206.153(e)(2) A lessee shall 330 2 660
notify MMS if it has determined
any value pursuant to paragraph
(c)(2) or (c)(3) of this
section. * * *
206.153(g)................... 206.153(g) The lessee may request 330 4 1,320
a value determination from MMS.
* * * The lessee shall submit
all available data relevant to
its proposal. * * *
----------------------------------------------------------------------------------------------------------------
Sec. 206.154 Determination of quantities and qualities for computing royalties.
----------------------------------------------------------------------------------------------------------------
206.154(c)(4)................ 206.154(c)(4) * * * A lessee may 330 1 330
request MMS approval of other
methods for determining the
quantity of residue gas and gas
plant products allocable to each
lease. * * *
----------------------------------------------------------------------------------------------------------------
[[Page 47977]]
Sec. 206.156 Transportation allowances-general.
----------------------------------------------------------------------------------------------------------------
206.156(c)(3)................ 206.156(c)(3) Upon request of a 8 3 24
lessee, MMS may approve a
transportation allowance
deduction in excess of the
limitation prescribed by
paragraphs (c)(1) and (c)(2) of
this section. * * * An
application for exception (using
Form MMS-4393, Request to Exceed
Regulatory Allowance Limitation)
shall contain all relevant and
supporting documentation
necessary for MMS to make a
determination. * * *
----------------------------------------------------------------------------------------------------------------
Sec. 206.157 Determination of transportation allowances.
----------------------------------------------------------------------------------------------------------------
206.157(a)(1)(i)............. 206.157(a) Arm's-length AUDIT PROCESS. See note.
transportation contracts. (1)(i)
* * * The lessee shall have the
burden of demonstrating that its
contract is arm's-length. * * *
206.157(a)(1)(i)............. 206.157(a)(1)(i) * * * The lessee Burden covered under OMB Control Number 1010-
must claim a transportation 0140.
allowance by reporting it on a
separate line entry on the Form
MMS-2014.
206.157(a)(1)(iii)........... 206.157(a)(1)(iii) * * * When MMS AUDIT PROCESS. See note.
determines that the value of the
transportation may be
unreasonable, MMS will notify
the lessee and give the lessee
an opportunity to provide
written information justifying
the lessee's transportation
costs.
-----------------------------------------------
206.157(a)(2)(ii)............ 206.157(a)(2)(ii) * * * the 330 1 330
lessee may propose to MMS a cost
allocation method on the basis
of the values of the products
transported. * * *
206.157(a)(3)................ 206.157(a)(3) If an arm's-length 330 1 330
transportation contract includes
both gaseous and liquid products
and the transportation costs
attributable to each cannot be
determined from the contract,
the lessee shall propose an
allocation procedure to MMS. * *
* The lessee shall submit all
relevant data to support its
proposal. * * *
206.157(a)(5)................ 206.157(a)(5) * * * The 100 1 100
transportation factor may not
exceed 50 percent of the base
price of the product without MMS
approval.
-----------------------------------------------
206.157(b)(1)................ 206.157(b) Non-arm's-length or no Burden covered under OMB Control Number 1010-
contract. (1) The lessee must 0140.
claim a transportation allowance
by reporting it on a separate
line entry on the Form MMS-2014.
* * *
-----------------------------------------------
206.157(b)(2)(iv) and 206.157(b)(2)(iv) After a lessee 100 1 100
(b)(2)(iv)(A). has elected to use either method
for a transportation system, the
lessee may not later elect to
change to the other alternative
without approval of the MMS.
(A) After an election is made,
the lessee may not change
methods without MMS approval. *
* *
-----------------------------------------------
206.157(b)(3)(i)............. 206.157(b)(3)(i) * * * Except as 100 1 100
provided in this paragraph, the
lessee may not take an allowance
for transporting a product which
is not royalty bearing without
MMS approval.
206.157(b)(3)(ii)............ 206.157(b)(3)(ii) * * * the 100 1 100
lessee may propose to the MMS a
cost allocation method on the
basis of the values of the
products transported. * * *
206.157(b)(4)................ 206.157(b)(4) Where both gaseous 100 1 100
and liquid products are
transported through the same
transportation system, the
lessee shall propose a cost
allocation procedure to MMS. * *
* The lessee shall submit all
relevant data to support its
proposal. * * *
206.157(b)(5)................ 206.157(b)(5) You may apply for 100 1 100
an exception from the
requirement to compute actual
costs under paragraphs (b)(1)
through (b)(4) of this section.
-----------------------------------------------
206.157(c)(1)(i)............. 206.157(c) Reporting Burden covered under OMB Control Number 1010-
Requirements. (1) Arm's-length 0140.
contracts. (i) You must use a
separate entry on Form MMS-2014
to notify MMS of a
transportation allowance.
[[Page 47978]]
206.157(c)(1)(ii)............ 206.157(c)(1)(ii) The MMS may AUDIT PROCESS. See note.
require you to submit arm's-
length transportation contracts,
production agreements, operating
agreements, and related
documents. * * *
206.157(c)(2)(i)............. 206.157(c)(2) Non-arm's-length or Burden covered under OMB Control Number 1010-
no contract. (i) You must use a 0140.
separate entry on Form MMS-2014
to notify MMS of a
transportation allowance.
206.157(c)(2)(iii)........... 206.157(c)(2)(iii) The MMS may AUDIT PROCESS. See note.
require you to submit all data
used to calculate the allowance
deduction. * * *
206.157(e)(2), (e)(3), and 206.157(e) Adjustments. (2) For Burden covered under OMB Control Number 1010-
(f)(1). lessees transporting production 0140.
from onshore Federal leases, the
lessee must submit a corrected
Form MMS-2014 to reflect actual
costs, together with any
payment, in accordance with
instructions provided by MMS.
-----------------------------------------------
(3) For lessees transporting gas
production from leases on the
OCS, if the lessee's estimated
transportation allowance exceeds
the allowance based on actual
costs, the lessee must submit a
corrected Form MMS-2014 to
reflect actual costs, together
with its payments, in accordance
with instructions provided by
MMS. * * *
(f) Allowable costs in
determining transportation
allowances. * * * (1) Firm
demand charges paid to pipelines
* * * if you receive a payment
or credit from the pipeline for
penalty refunds, rate case
refunds, or other reasons, you
must reduce the firm demand
charge claimed on the Form MMS-
2014 by the amount of that
payment. You must modify Form
MMS-2014 by the amount received
or credited for the affected
reporting period and pay any
resulting royalty and late
payment interest due;
----------------------------------------------------------------------------------------------------------------
Sec. 206.158 Processing allowances--general.
----------------------------------------------------------------------------------------------------------------
206.158(c)(3)................ 206.158(c)(3) Upon request of a 8 12 96
lessee, MMS may approve a
processing allowance in excess
of the limitation prescribed by
paragraph (c)(2) of this
section. * * * An application
for exception (using Form MMS-
4393, Request to Exceed
Regulatory Allowance Limitation)
shall contain all relevant and
supporting documentation for MMS
to make a determination. * * *
206.158(d)(2)(i)............. 206.158(d)(2)(i) If the lessee 40 2 80
incurs extraordinary costs for
processing gas production from a
gas production operation, it may
apply to MMS for an allowance
for those costs. * * *
-----------------------------------------------
206.158(d)(2)(ii)............ 206.158(d)(2)(ii) * * * to retain Burden covered under OMB Control Number 1010-
the authority to deduct the 0140.
allowance the lessee must report
the deduction to MMS in a form
and manner prescribed by MMS.
----------------------------------------------------------------------------------------------------------------
Sec. 206.159 Determination of processing allowances.
----------------------------------------------------------------------------------------------------------------
206.159(a)(1)(i)............. 206.159(a) Arm's-length AUDIT PROCESS. See note.
processing contracts.
-----------------------------------------------
(1)(i) * * * The lessee shall
have the burden of demonstrating
that its contract is arm's-
length. * * *
-----------------------------------------------
206.159(a)(1)(i)............. 206.159(a)(1)(i) * * * The lessee Burden covered under OMB Control Number 1010-
must claim a processing 0140.
allowance by reporting it on a
separate line entry on the Form
MMS-2014.
206.159(a)(1)(iii)........... 206.159(a)(1)(iii) * * * When MMS AUDIT PROCESS. See note.
determines that the value of the
processing may be unreasonable,
MMS will notify the lessee and
give the lessee an opportunity
to provide written information
justifying the lessee's
processing costs.
-----------------------------------------------
[[Page 47979]]
206.159(a)(3)................ 206.159(a)(3) If an arm's-length 330 1 330
processing contract includes
more than one gas plant product
and the processing costs
attributable to each product
cannot be determined from the
contract, the lessee shall
propose an allocation procedure
to MMS. * * * The lessee shall
submit all relevant data to
support its proposal. * * *
-----------------------------------------------
206.159(b)(1)................ 206.159(b) Non-arm's-length or no Burden covered under OMB Control Number 1010-
contract. (1) * * * The lessee 0140.
must claim a processing
allowance by reflecting it as a
separate line entry on the Form
MMS-2014. * * *
-----------------------------------------------
206.159(b)(2)(iv) and 206.159(b)(2)(iv) * * * When a 100 1 100
(b)(2)(iv)(A). lessee has elected to use either
method for a processing plant,
the lessee may not later elect
to change to the alternative
without approval of the MMS.
(A) * * * After an election is
made, the lessee may not change
methods without MMS approval. *
* *
206.159(b)(4)................ 206.159(b)(4) A lessee may apply 100 1 100
to MMS for an exception from the
requirements that it compute
actual costs in accordance with
paragraphs (b)(1) through (b)(3)
of this section. * * *
-----------------------------------------------
206.159(c)(1)(i)............. 206.159(c) Reporting Burden covered under OMB Control Number 1010-
requirements--(1) Arm's-length 0140.
contracts. (i) The lessee must
notify MMS of an allowance based
on incurred costs by using a
separate line entry on the Form
MMS-2014.
-----------------------------------------------
206.159(c)(1)(ii)............ 206.159(c)(1)(ii) The MMS may AUDIT PROCESS. See note.
require that a lessee submit
arm's-length processing
contracts and related documents.
* * *
206.159(c)(2)(i)............. 206.159(c)(2) Non-arm's-length or Burden covered under OMB Control Number 1010-
no contract. 0140.
-----------------------------------------------
(i) The lessee must notify MMS of
an allowance based on incurred
costs by using a separate line
entry on the Form MMS-2014.
-----------------------------------------------
206.159(c)(2)(iii)........... 206.159(c)(2)(iii) Upon request AUDIT PROCESS. See note.
by MMS, the lessee shall submit
all data used to prepare the
allowance deduction. * * *
206.159(e)(2) and (3)........ 206.159(e) Adjustments. Burden covered under OMB Control Number 1010-
0140.
-----------------------------------------------
(2) For lessees processing
production from onshore Federal
leases, the lessee must submit a
corrected Form MMS-2014 to
reflect actual costs, together
with any payment, in accordance
with instructions provided by
MMS.
(3) For lessees processing gas
production from leases on the
OCS, if the lessee's estimated
processing allowance exceeds the
allowance based on actual costs,
the lessee must submit a
corrected Form MMS-2014 to
reflect actual costs, together
with its payment, in accordance
with instructions provided by
MMS. * * *
-----------------------------------------------
Total.................... ................................. .............. 106 21,055
----------------------------------------------------------------------------------------------------------------
Note: AUDIT PROCESS--The Office of Regulatory Affairs determined
that the audit process is exempt from the Paperwork Reduction Act of
1995 because MMS staff asks non-standard questions to resolve
exceptions.
Estimated Annual Reporting and Recordkeeping ``Non-hour Cost''
Burden: We have identified no ``non-hour cost'' burden associated with
the collection of information.
Public Disclosure Statement: The PRA (44 U.S.C. 3501 et seq.)
provides that 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.
Comments: Before submitting an ICR to OMB, PRA Section
3506(c)(2)(A) 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
[[Page 47980]]
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.
The PRA also requires agencies to estimate the total annual
reporting ``non-hour cost'' burden to respondents or recordkeepers
resulting from the collection of information. If you have costs to
generate, maintain, and disclose this information, you should comment
and provide your total capital and startup cost components or annual
operation, maintenance, and purchase of service components. You should
describe the methods you use to estimate major cost factors, including
system and technology acquisition, expected useful life of capital
equipment, discount rate(s), and the period over which you incur costs.
Capital and startup costs include, among other items, computers and
software you purchase to prepare for collecting information;
monitoring, sampling, and testing equipment; and record storage
facilities. Generally, your estimates should not include equipment or
services purchased: (i) Before October 1, 1995; (ii) to comply with
requirements not associated with the information collection; (iii) for
reasons other than to provide information or keep records for the
Government; or (iv) as part of customary and usual business or private
practices.
We will summarize written responses to this notice and address them
in our ICR submission for OMB approval, including appropriate
adjustments to the estimated burden. We will provide a copy of the ICR
to you without charge upon request. The ICR also will be posted at
http://www.mrm.mms.gov/Laws_R_D/FRNotices/FRInfColl.htm.
Public Comment Policy: We will post all comments in response to
this notice at http://www.mrm.mms.gov/Laws_R_D/FRNotices/FRInfColl.htm. We also will make copies of the comments available for
public view, including names and addresses of respondents, during
regular business hours at our offices in Lakewood, Colorado. Before
including your address, phone number, e-mail address, or other personal
identifying information in your comment, be advised that your entire
comment--including your personal identifying information--may be made
publicly available at any time. While you can ask us in your comment to
withhold from public view your personal identifying information, we
cannot guarantee that we will be able to do so.
MMS Information Collection Clearance Officer: Arlene Bajusz, (202)
208-7744.
Dated: August 11, 2008.
Gregory J. Gould,
Associate Director for Minerals Revenue Management.
[FR Doc. E8-18963 Filed 8-14-08; 8:45 am]
BILLING CODE 4310-MR-P