[Federal Register Volume 75, Number 69 (Monday, April 12, 2010)]
[Notices]
[Pages 18525-18536]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-8198]


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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).

-----------------------------------------------------------------------

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. We consolidated this information collection request (ICR) and 
ICR 1010-0090, Stripper Royalty Rate Reduction Notification, in order 
to allow program-wide review of Federal oil and gas valuation. The new 
title of this ICR is ``30 CFR parts 202, 204, 206, and 210, Federal Oil 
and Gas Valuation.''

DATES: Submit written comments on or before June 11, 2010.

ADDRESSES: You may submit comments on this ICR by any of the following 
methods. Please use ``ICR 1010-0136'' as an identifier in your comment.
     Electronically go to http://www.regulations.gov. In the 
entry titled ``Enter Keyword or ID,'' enter MMS-2008-MRM-0031, and then 
click search. Follow the instructions to submit public comments. The 
MMS will post all comments.
     Mail comments to Hyla Hurst, Regulatory Specialist, 
Minerals Management Service, Minerals Revenue Management, P.O. Box 
25165, MS 61013B, 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 St., 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, 206, and 210, Federal Oil and Gas 
Valuation.
    OMB Control Number: 1010-0136.
    Bureau Form Number: Forms MMS-4377 and 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). The Secretary is required 
by various laws to manage mineral resource production from Federal and 
Indian lands and the OCS, collect the royalties and other mineral 
revenues due, and distribute the funds collected in accordance with 
applicable laws. Public laws pertaining to mineral leases on Federal 
and Indian lands are posted on our Web site 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

[[Page 18526]]

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 Federal onshore and offshore leases. Please refer to the 
Respondents' Estimated Annual Burden Hours table for all reporting 
requirements and associated burden hours. All data submitted is subject 
to subsequent audit and adjustment.

Federal Oil and Gas Valuation Regulations

    The valuation regulations at 30 CFR part 206, subparts C and D, 
mandate that companies collect and/or submit information used to value 
their Federal oil and gas, including (1) transportation and processing 
allowances; and (2) regulatory allowance limitation information. 
Companies report certain data on Form MMS-2014, Report of Sales and 
Royalty Remittance (OMB Control Number 1010-0139). The information 
requested is the minimum necessary to carry out our mission and places 
the least possible burden on respondents. If MMS does not collect this 
information, both Federal and State governments may incur a loss of 
royalties.

Transportation and Processing Regulatory Allowance Limits

    Lessees may deduct the reasonable, actual costs of transportation 
and processing from Federal royalties. Lessees who request approval to 
exceed the regulatory allowance limits are required to provide 
information in order to obtain these benefits.

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. Form MMS-4393 
is used for both Federal and Indian leases to request to exceed 
allowance limitations. This ICR includes only Federal leases; therefore 
burden hours for Form MMS-4393 for Indian leases are not included in 
this ICR. Burden hours for Form MMS-4393 for Indian leases are included 
in OMB Control Number 1010-0103.

Accounting and Auditing Relief for Marginal Properties

    In 2004, we amended our regulations to comply with section 7 of the 
Federal Oil and Gas Royalty Simplification and Fairness Act of 1996. 
The regulations provide guidance for lessees and designees seeking 
accounting and auditing relief for qualifying Federal marginal 
properties. Under the regulations, both MMS and the state concerned 
must approve any relief granted for a marginal property.

Stripper Oil Royalty Rate Reduction Program

    Under 43 CFR 3103.4-2, the Stripper Oil Royalty Rate Reduction 
Program (Stripper Oil Program) was established by the Bureau of Land 
Management (BLM), the surface management agency for Federal onshore 
leases. As a benefit under this program, MMS, who administered the 
Stripper Oil Program for BLM, approved royalty rate reductions for 
operators of stripper oil properties for applicable sales periods from 
October 1, 1992, through January 31, 2006. Effective February 1, 2006, 
the benefits of reduced royalty rates under this program were 
terminated. This change is not currently reflected in the CFR; however, 
BLM is processing a final rule to remove this citation from the 
regulations.
    For production through January 31, 2006, reporters used Form MMS-
4377, Stripper Royalty Rate Reduction Notification, to notify MMS of 
royalty rate changes. Although the benefits were terminated, MMS 
continues to verify previously submitted notifications and may require 
the operator to submit an amended Form MMS-4377.

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 required to obtain benefits.
    Frequency: Annually and on occasion.
    Estimated Number and Description of Respondents: 120 Federal 
lessees/designees and 7 states for Federal oil and gas valuation; and 
150 lessees/lessors for the Stripper Oil Program.
    Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 9,378 
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
----------------------------------------------------------------------------------------------------------------
                                                                                  Average number
   30 CFR 202, 204, 206, and 210     Reporting and recordkeeping    Hour burden      of annual     Annual burden
                                             requirement                             responses         hours
----------------------------------------------------------------------------------------------------------------
                                               PART 202--ROYALTIES
                                        Subpart C--Federal and Indian Oil
----------------------------------------------------------------------------------------------------------------
202.101............................  202.101 Oil volumes are to    Burden covered under OMB Control Number 1010-
                                      be reported in barrels of                        0139.
                                      clean oil of 42 standard
                                      U.S. gallons (231 cubic
                                      inches each) at 60 [deg]F.
                                      * * *
----------------------------------------------------------------------------------------------------------------

[[Page 18527]]

 
                                             Subpart D--Federal Gas
----------------------------------------------------------------------------------------------------------------
202.152(a) and (b).................  202.152(a)(1) If you are      Burden covered under OMB Control Number 1010-
                                      responsible for reporting                        0139.
                                      production or royalties
                                      you must:
                                     (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. * * *.
----------------------------------------------------------------------------------------------------------------
                                 PART 204--ALTERNATIVES FOR MARGINAL PROPERTIES
                                    Subpart C--Accounting and Auditing Relief
----------------------------------------------------------------------------------------------------------------
204.202(b)(1)......................  204.202(b) To use the                    40               1              40
                                      cumulative 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) and (b)(3)...........  204.202(b)(2) Submit your     Burden covered under OMB Control Number 1010-
                                      royalty report and payment                       0139.
                                      * * * by the 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), (d)(1),  204.202(b) To use the         Burden covered under OMB Control Number 1010-
 (d)(2), (e)(1), and (e)(2).          cumulative royalty reports                       0139.
                                      and payments 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. * * *.
                                     (d) If you take relief you
                                      are not qualified for, you
                                      may be liable for civil
                                      penalties. Also you must:
                                     (1) Pay MMS late payment
                                      interest determined under
                                      30 CFR 218.54 * * *.
                                     (2) Amend your Form MMS-
                                      2014 * * *.
                                     (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.
                                      * * *.
----------------------------------------------------------------------------------------------------------------
204.203(b), 204.205(a) and (b), and  204.203(b) You must request             200               1             200
 204.206(a)(3)(i) and (b)(1).         approval from MMS * * *
                                      before taking relief under
                                      this option.
----------------------------------------------------------------------------------------------------------------

[[Page 18528]]

 
204.209(b).........................  204.209(b) If a property is               6               1               6
                                      no 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 *
                                      * *.
----------------------------------------------------------------------------------------------------------------
204.210(c) and (d).................  204.210(c) * * * the          Burden covered under OMB Control Number 1010-
                                      volumes on which you                             0139.
                                      report and pay royalty * *
                                      * 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..
----------------------------------------------------------------------------------------------------------------
204.214(b)(1) and (b)(2)...........  204.214(b) If you pay         Burden covered under OMB Control Number 1010-
                                      minimum royalty on                               0139.
                                      production from a 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.
                                     (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..
----------------------------------------------------------------------------------------------------------------
    Accounting and Auditing Relief Subtotal.....................................              10             526
----------------------------------------------------------------------------------------------------------------
                                           PART 206--PRODUCT VALUATION
                                             Subpart C--Federal Oil
----------------------------------------------------------------------------------------------------------------
206.102(e)(1)......................  206.102(e) If you value oil             AUDIT PROCESS. See note.
                                      under 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.
----------------------------------------------------------------------------------------------------------------
206.103(a)(1), (a)(2), and (a)(3)..  206.103 This section                     45               5             225
                                      explains how to value oil
                                      that you may not value
                                      under Sec.   206.102 or
                                      that you 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                   8               2              16
                                      select an 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              400               2             800
                                      leases in the Rocky
                                      Mountain Region. * * * (1)
                                      If you have an MMS-
                                      approved tendering
                                      program, you must value
                                      oil * * *.
----------------------------------------------------------------------------------------------------------------

[[Page 18529]]

 
206.103(b)(1)(ii)..................  206.103(b)(1)(ii) If you do             400               2             800
                                      not 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                    400               2             800
                                      demonstrate 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               50              10             500
                                      leases 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 (e)(2)...........  206.103(e) Production                   330               2             660
                                      delivered 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. * * *
----------------------------------------------------------------------------------------------------------------
206.105............................  206.105 If you determine      Burden covered under OMB Control Number 1010-
                                      the value of your oil                            0139.
                                      under this subpart, you
                                      must retain all data
                                      relevant to the
                                      determination of royalty
                                      value. * * *.
----------------------------------------------------------------------------------------------------------------
206.107(a).........................  206.107(a) You may request               40              10             400
                                      a value determination from
                                      MMS * * *.
----------------------------------------------------------------------------------------------------------------
206.109(c)(2)......................  206.109(c) Limits on                      8               2              16
                                      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 * * *..
----------------------------------------------------------------------------------------------------------------
206.110(a).........................  206.110(a) * * * You must               AUDIT PROCESS. See note.
                                      be able to demonstrate
                                      that your or your
                                      affiliate's contract is at
                                      arm's length. * * *.
----------------------------------------------------------------------------------------------------------------
206.110(d)(3)......................  206.110(d) If your arm's-                20               2              40
                                      length 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-                20               1              20
                                      length 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.
----------------------------------------------------------------------------------------------------------------
206.110(e)(1) and (e)(2)...........  206.110(e)(1) * * * If MMS    Burden covered under OMB Control Number 1010-
                                      rejects your cost                                0139.
                                      allocation, 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..
----------------------------------------------------------------------------------------------------------------

[[Page 18530]]

 
206.110(g)(2)......................  206.110(g) If your arm's-                 5               1               5
                                      length sales contract
                                      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..
----------------------------------------------------------------------------------------------------------------
206.111(g).........................  206.111(g) To compute                    30               1              30
                                      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                    30               1              30
                                      propose to MMS a cost
                                      allocation method on the
                                      basis of the values * * *.
----------------------------------------------------------------------------------------------------------------
206.111(l)(1) and (l)(3)...........  206.111(l)(1) Where you                  20               1              20
                                      transport both gaseous and
                                      liquid products through
                                      the same transportation
                                      system, you must propose a
                                      cost allocation procedure
                                      to MMS. * * *.
                                     (3) You must submit your
                                      initial proposal,
                                      including all available
                                      data, within 3 months
                                      after first claiming the
                                      allocated deductions on
                                      Form MMS-2014..
----------------------------------------------------------------------------------------------------------------
206.111(l)(2)......................  206.111(l)(2) * * * If MMS    Burden covered under OMB Control Number 1010-
                                      rejects your cost                                0139.
                                      allocation, you must amend
                                      your Form MMS-2104 for the
                                      months that you used the
                                      rejected method and pay
                                      any additional royalty and
                                      interest due.
----------------------------------------------------------------------------------------------------------------
206.112(a)(1)(ii)..................  206.112(a)(1)(ii) * * *                  80               1              80
                                      under an exchange
                                      agreement that is not at
                                      arm's length, you must
                                      obtain approval from MMS
                                      for a location and quality
                                      differential * * *
----------------------------------------------------------------------------------------------------------------
206.112(a)(1)(ii)..................  206.112(a)(1)(ii) * * * If               20               2              40
                                      MMS 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 (a)(4)...........  206.112(a)(3) If you                     80               4             320
                                      transport or 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              80               4             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
                                      * * *.
----------------------------------------------------------------------------------------------------------------

[[Page 18531]]

 
206.112(c)(2)......................  206.112(c)(2) * * * If                   80               2             160
                                      quality 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.
----------------------------------------------------------------------------------------------------------------
206.114............................  206.114 You or your           Burden covered under OMB Control Number 1010-
                                      affiliate must use a                             0139.
                                      separate entry on Form MMS-
                                      2014 to notify MMS of an
                                      allowance based on
                                      transportation costs you
                                      or your affiliate incur.
                                                                 -----------------------------------------------
                                     MMS may require you or your             AUDIT PROCESS. See note.
                                      affiliate to submit arm's-
                                      length transportation
                                      contracts, production
                                      agreements, operating
                                      agreements, and related
                                      documents. * * *
----------------------------------------------------------------------------------------------------------------
206.115(a).........................  206.115(a) You or your        Burden covered under OMB Control Number 1010-
                                      affiliate must use a                             0139.
                                      separate entry on 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              AUDIT PROCESS. See note.
                                      you or your affiliate to
                                      submit all data used to
                                      calculate the allowance
                                      deduction. * * *
----------------------------------------------------------------------------------------------------------------
                                             Subpart D--Federal Gas
----------------------------------------------------------------------------------------------------------------
206.152(b)(1)(i) and (b)(1)(iii)...  206.152(b)(1)(i) * * * The              AUDIT PROCESS. See note.
                                      lessee 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                  80               1              80
                                      lessee must request a
                                      value determination in
                                      accordance with paragraph
                                      (g) of this section for
                                      gas sold pursuant to a
                                      warranty contract; * * *
----------------------------------------------------------------------------------------------------------------
206.152(b)(3)......................  206.152(b)(3) MMS may                   AUDIT PROCESS. See note.
                                      require a 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       Burden covered under OMB Control Number 1010-
                                      value is determined                              0139.
                                      pursuant to paragraph (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               AUDIT PROCESS. See note.
                                      lessee 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                   10              10             100
                                      shall 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                40               5             200
                                      request a value
                                      determination from MMS. *
                                      * * The lessee shall
                                      submit all available data
                                      relevant to its proposal.
                                      * * *
----------------------------------------------------------------------------------------------------------------

[[Page 18532]]

 
206.153(b)(1)(i) and (b)(1)(iii)...  206.153(b)(1)(i) * * * The              AUDIT PROCESS. See note.
                                      lessee 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..
----------------------------------------------------------------------------------------------------------------
206.153(b)(2)......................  206.153(b)(2) * * * The                  80               1              80
                                      lessee 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                   AUDIT PROCESS. See note.
                                      require a 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       Burden covered under OMB Control Number 1010-
                                      value is determined                              0139.
                                      pursuant to paragraph (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               AUDIT PROCESS. See note.
                                      lessee 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                   10               2              20
                                      shall 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                80              15           1,200
                                      request a value
                                      determination from MMS. *
                                      * * The lessee shall
                                      submit all available data
                                      relevant to its proposal.
                                      * * *
----------------------------------------------------------------------------------------------------------------
206.154(c)(4)......................  206.154(c)(4) * * * A                    40               1              40
                                      lessee may request MMS
                                      approval of other methods
                                      for determining the
                                      quantity of residue gas
                                      and gas plant products
                                      allocable to each lease. *
                                      * *
----------------------------------------------------------------------------------------------------------------
206.156(c)(3)......................  206.156(c)(3) Upon request               40               3             120
                                      of a 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) must contain
                                      all relevant and
                                      supporting documentation
                                      necessary for MMS to make
                                      a determination. * * *
----------------------------------------------------------------------------------------------------------------
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.
                                      * * *
                                                                 -----------------------------------------------
                                     The lessee must claim a       Burden covered under OMB Control Number 1010-
                                      transportation allowance                         0139.
                                      by reporting it on a
                                      separate line entry on the
                                      Form MMS-2014.
----------------------------------------------------------------------------------------------------------------
206.157(a)(1)(iii).................  206.157(a)(1)(iii) * * *                AUDIT PROCESS. See note.
                                      When MMS 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.
----------------------------------------------------------------------------------------------------------------

[[Page 18533]]

 
206.157(a)(2)(ii)..................  206.157(a)(2)(ii) * * * the              40               1              40
                                      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-               40               1              40
                                      length 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                  10               3              30
                                      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   Burden covered under OMB Control Number 1010-
                                      or no contract. (1) The                          0139.
                                      lessee must claim a
                                      transportation allowance
                                      by reporting it on a
                                      separate line entry on the
                                      Form MMS-2014. * * *
----------------------------------------------------------------------------------------------------------------
206.157(b)(2)(iv) and (b)(2)(iv)     206.157(b)(2)(iv) * * *                 100               1             100
 (A).                                 After a lessee 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) * * *                  100               1             100
                                      Except as 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                100               1             100
                                      gaseous 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             100               1             100
                                      for 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-                         0139.
                                      length contracts. (i) You
                                      must use a separate entry
                                      on Form MMS-2014 to notify
                                      MMS of a transportation
                                      allowance.
----------------------------------------------------------------------------------------------------------------
206.157(c)(1)(ii)..................  206.157(c)(1)(ii) The MMS               AUDIT PROCESS. See note.
                                      may 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-      Burden covered under OMB Control Number 1010-
                                      length or no contract. (i)                       0139.
                                      You must use a 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              AUDIT PROCESS. See note.
                                      may require you to submit
                                      all data used to calculate
                                      the allowance deduction. *
                                      * *
----------------------------------------------------------------------------------------------------------------

[[Page 18534]]

 
206.157(e)(2), (e)(3), and (f)(1)..  206.157(e) Adjustments. (2)   Burden covered under OMB Control Number 1010-
                                      For lessees transporting                         0139.
                                      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
                                      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;.
----------------------------------------------------------------------------------------------------------------
206.158(c)(3)......................  206.158(c)(3) Upon request               80               8             640
                                      of a 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                  80               1              80
                                      lessee 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    Burden covered under OMB Control Number 1010-
                                      retain the authority to                          0139.
                                      deduct the allowance the
                                      lessee must report the
                                      deduction to MMS in a form
                                      and manner prescribed by
                                      MMS.
----------------------------------------------------------------------------------------------------------------
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.
                                      * * *
                                                                 -----------------------------------------------
                                     The lessee must claim a       Burden covered under OMB Control Number 1010-
                                      processing allowance by                          0139.
                                      reporting it on a separate
                                      line entry on the Form MMS-
                                      2014.
----------------------------------------------------------------------------------------------------------------
206.159(a)(1)(iii).................  206.159(a)(1)(iii) * * *                AUDIT PROCESS. See note.
                                      When MMS 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.
----------------------------------------------------------------------------------------------------------------
206.159(a)(3)......................  206.159(a)(3) If an arm's-               20               1              20
                                      length 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   Burden covered under OMB Control Number 1010-
                                      or no contract.                                  0139.
                                     (1)* * * The lessee must
                                      claim a processing
                                      allowance by reflecting it
                                      as a separate line entry
                                      on the Form MMS-2014. * *
                                      *.
----------------------------------------------------------------------------------------------------------------

[[Page 18535]]

 
206.159(b)(2)(iv) and (b)(2)(iv)     206.159(b)(2)(iv) * * *                 100               1             100
 (A).                                 When 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              100               1             100
                                      apply 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-                         0139.
                                      length 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               AUDIT PROCESS. See note.
                                      may 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-      Burden covered under OMB Control Number 1010-
                                      length or no contract. (i)                       0139.
                                      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                 AUDIT PROCESS. See note.
                                      request by MMS, the lessee
                                      shall submit all data used
                                      to prepare the allowance
                                      deduction. * * *
----------------------------------------------------------------------------------------------------------------
206.159(e)(2) and (e)(3)...........  206.159(e) Adjustments.....   Burden covered under OMB Control Number 1010-
                                     (2) For lessees processing                        0139.
                                      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 * * *..
----------------------------------------------------------------------------------------------------------------
    Oil and Gas Valuation Subtotal..............................................             117           8,672
----------------------------------------------------------------------------------------------------------------
                                           PART 210--FORMS AND REPORTS
                     Subpart D--Special-Purpose Forms and Reports--Oil, Gas, and Geothermal
----------------------------------------------------------------------------------------------------------------
210.155(a).........................  210.155(a) General.                     1.2             150             180
                                      Operators who have been
                                      granted a reduced royalty
                                      rate by the Bureau of Land
                                      Management (BLM) * * *
                                      must submit Form MMS-4377,
                                      Stripper Royalty Rate
                                      Reduction Notification,
                                      under 43 CFR * * *.
                                     NOTE: BLM terminated the
                                      benefits of this program
                                      and is processing a final
                                      rule to remove this
                                      program from the
                                      regulations.
----------------------------------------------------------------------------------------------------------------
    Total.......................................................................             277           9,378
----------------------------------------------------------------------------------------------------------------
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 60-day notice in 
the Federal Register

[[Page 18536]]

* * * 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 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. We also will post the ICR at http://www.mrm.mms.gov/Laws_R_D/FRNotices/FRInfColl.htm.
    Public Comment Policy: We will post all comments, including names 
and addresses of respondents, at http://www.regulations.gov. 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: April 6, 2010.
Gregory J. Gould,
Associate Director for Minerals Revenue Management.
[FR Doc. 2010-8198 Filed 4-9-10; 8:45 am]
BILLING CODE 4310-MR-P