[Federal Register Volume 79, Number 97 (Tuesday, May 20, 2014)]
[Notices]
[Pages 28945-28948]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-11559]


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DEPARTMENT OF THE INTERIOR

Office of Natural Resources Revenue

[Docket No. ONRR-2011-0006; DS63610000 DR2PS0000.CH7000 145D0102R2]


Agency Information Collection Activities: Proposed Collection, 
Comment Request

AGENCY: Office of Natural Resources Revenue (ONRR), Interior.

ACTION: Notice of extension, OMB Control Number 1012-0009.

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SUMMARY: To comply with the Paperwork Reduction Act of 1995 (PRA), ONRR 
is inviting comments on a collection of information requests that we 
will submit to the Office of Management and Budget (OMB) for review and 
approval. This Information Collection Request (ICR) covers the 
paperwork requirements in the regulations under title 30, Code of 
Federal Regulations (CFR), part 1220. Also, this ICR pertains to 
royalties or net profit share payments from oil and gas leases on 
submerged Federal lands on the Outer Continental Shelf (OCS).

DATES: Submit written comments on or before July 21, 2014.

ADDRESSES: You may submit comments on this ICR to ONRR by using one of 
the following three methods:

[[Page 28946]]

    1. Electronically go to http://www.regulations.gov. In the entry 
titled ``Enter Keyword or ID,'' enter ONRR-2011-0006 and then click 
``Search.'' Follow the instructions to submit public comments. ONRR 
will post all comments.
    2. Mail comments to Mr. Luis Aguilar, Regulatory Specialist, ONRR, 
P.O. Box 25165, MS 61030A, Denver, Colorado 80225-0165. Please 
reference ``ICR 1012-0009'' in your comments.
    3. Hand-carry or mail comments, using an overnight courier service, 
to ONRR. Our courier address is Building 85, Room A-614, Denver Federal 
Center, West 6th Ave. and Kipling St., Denver, Colorado 80225. Please 
reference ``ICR 1012-0009'' in your comments.

FOR FURTHER INFORMATION CONTACT: For questions on technical issues, 
contact Ms. Suzanne Wolter, Audit and Compliance Management (ACM), 
ONRR, telephone (303) 231-3405 or email at [email protected]. For 
other questions, contact Mr. Luis Aguilar, telephone (303) 231-3418, or 
email at [email protected]. You may also contact Mr. Aguilar to 
obtain copies, at no cost, of (1) the ICR, (2) any associated form, and 
(3) the regulations that require us to collect the information.

SUPPLEMENTARY INFORMATION:
    Title: OCS Net Profit Share Payment Reporting--30 CFR Part 1220.
    OMB Control Number: 1012-0009.
    Bureau Form Number: None.
    Abstract: The Secretary of the United States Department of the 
Interior is responsible for collecting royalties from lessees who 
produce minerals from leased Federal and Indian lands and the OCS. The 
Secretary's responsibility, under various laws, is 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 under those laws. ONRR performs the royalty management 
functions for the Secretary.
    We have posted those laws pertaining to mineral leases on Federal 
and Indian lands and the OCS at http://www.onrr.gov/Laws_R_D/PubLaws/default.htm.

I. General Information

    ONRR collects and uses this information to determine (1) all 
allowable direct and allocable joint costs and credits under Sec.  
1220.011 incurred during the lease term; (2) appropriate overhead 
allowance permitted on these costs under Sec.  1220.012; and (3) 
allowances for capital recovery calculated under Sec.  1220.020. ONRR 
also collects this information to ensure that royalties or net profit 
share payments are accurately valued and appropriately paid. This ICR 
affects only oil and gas leases on submerged Federal lands on the OCS.

II. Information Collections

    Title 30 CFR part 1220 covers the net profit share lease (NPSL) 
program and establishes reporting requirements for determining the net 
profit share base under Sec.  1220.021. It also covers the calculating 
of net profit share payments due to the Federal Government for the 
production of oil and gas from leases under Sec.  1220.022.

A. NPSL Bidding System

    To encourage exploration and development of oil and gas leases on 
submerged Federal lands on the OCS, the Bureau of Ocean Energy 
Management (BOEM) promulgated regulations at 30 CFR part 506--Outer 
Continental Shelf Oil and Gas Leasing. Also, BOEM promulgated specific 
implementing regulations for the NPSL bidding system at Sec.  
506.110(d). BOEM established the NPSL bidding system to balance a fair 
market return to the Federal Government for the lease of its public 
lands and providing a fair profit to companies risking their investment 
capital. The system provides an incentive for early expeditious 
exploration and development providing for sharing of the risks by the 
lessee and the Federal Government. The NPSL bidding system incorporates 
a fixed capital recovery system as a means through which the lessee 
recovers costs of exploration and development from production revenues, 
along with a reasonable return on investment.

B. NPSL Capital Account

    The Federal Government does not receive a profit share payment from 
an NPSL until the lessee shows a credit balance in its capital account; 
that is, cumulative revenues and other credits exceed cumulative costs. 
Lessees multiply the credit balance by the net profit share rate (30 to 
50 percent), resulting in the amount of net profit share payment due to 
the Federal Government.
    ONRR requires lessees to maintain an NPSL capital account for each 
lease under Sec.  1220.010, which transfers to a new owner when sold. 
Following the cessation of production, lessees are also required to 
provide either an annual or a monthly report to the Federal Government 
by using data from the capital account until the lease is terminated, 
expired, or relinquished.

C. NPSL Inventories

    The NPSL lessees must notify BOEM of their intent to take inventory 
so that BOEM's Director may be represented at the taking of inventory 
under Sec.  1220.032. Each lessee must file a report after each 
inventory is taken, reporting the controllable material under Sec.  
1220.031.

D. NPSL Audits

    Non-operators of an NPSL must notify ONRR when they call for an 
audit. When ONRR calls for an audit, the lessee must notify all non-
operators on the lease. These requirements are located at Sec.  
1220.033.

III. OMB Approval

    ONRR will request OMB approval to continue to collect this 
information. If ONRR does not collect this information, this would 
limit the Secretary's ability to discharge fiduciary duties and may 
also result in the inability to confirm the accurate royalty value. 
ONRR protects the proprietary information that we receive, and we do 
not collect items of a sensitive nature.
    ONRR requires lessees to respond to this ICR because the 
information collected is essential in order to determine when net 
profit share payments are due and to ensure that lessees properly value 
and pay royalties or net profit share payments.
    Frequency: Annually, monthly, and on occasion.
    Estimated Number and Description of Respondents: 6 lessees.
    Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 1,926 
hours.
    All six lessees report monthly because all current NPSLs are in 
producing status. Because the requirements for establishment of capital 
accounts at Sec.  1220.010(a) and capital account annual reporting at 
Sec.  1220.031(a) are necessary only during the non-producing status of 
a lease, ONRR included only one annual response for these requirements 
in case a new NPSL is established. ONRR did not include in the 
estimates certain requirements performed in the normal course of 
business, which are considered usual and customary. The following table 
shows the estimated annual burden hours by CFR section and paragraph.

[[Page 28947]]



                                   Respondents' Estimated Annual Burden Hours
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                                                                                     Number of
        Citation 30 CFR 1220           Reporting & recordkeeping    Hour burden       annual       Annual burden
                                              requirement                            responses         hours
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  Part 1220--Accounting Procedures for Determining Net Profit Share Payment for Outer Continental Shelf Oil and
                                                   Gas Leases
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                                      Sec.   1220.010 NPSL Capital Account
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1220.010(a).........................  (a) For each NPSL tract,                 1               1               1
                                       an NPSL capital account
                                       shall be established and
                                       maintained by the lessee
                                       for NPSL operations . . .
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                                     Sec.   1220.030 Maintenance of records
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1220.030(a) and (b).................  (a) Each lessee . . .                    1              11              11
                                       shall establish and
                                       maintain such records as
                                       are necessary . . .
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                               Sec.   1220.031 Reporting and payment requirements
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1220.031(a).........................  (a) Each lessee subject to               1              11              11
                                       this part shall file an
                                       annual report during the
                                       period from issuance of
                                       the NPSL until the first
                                       month in which production
                                       revenues are credited to
                                       the NPSL capital account
                                       . . .
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1220.031(b).........................  (b) Beginning with the                  13         \1\ 132            1716
                                       first month in which
                                       production revenues are
                                       credited to the NPSL
                                       capital account, each
                                       lessee . . . shall file a
                                       report for each NPSL, not
                                       later than 60 days
                                       following the end of each
                                       month . . .
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1220.031(c).........................  (c) Each lessee subject to  Burden hours covered under Sec.   1220.031(b).
                                       this Part 220 shall
                                       submit, together with the
                                       report required . . . any
                                       net profit share payment
                                       due . . .
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1220.031(d).........................  (d) Each lessee . . .                    8              11              88
                                       shall file a report not
                                       later than 90 days after
                                       each inventory is taken
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1220.031(e).........................  (e) Each lessee . . .                    4              11              44
                                       shall file a final
                                       report, not later than 60
                                       days following the
                                       cessation of production .
                                       . .
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                                           Sec.   1220.032 Inventories
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1220.032(b).........................  (b) At reasonable                        1              11              11
                                       intervals, but at least
                                       once every three years,
                                       inventories of
                                       controllable materiel
                                       shall be taken by the
                                       lessee. Written notice of
                                       intention to take
                                       inventory shall be given
                                       by the lessee at least 30
                                       days before any inventory
                                       is to be taken so that
                                       the BOEM Director may be
                                       represented at the taking
                                       of inventory . . .
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                                             Sec.   1220.033 Audits
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1220.033(b)(1)......................  (b)(1) When nonoperators                 2              11              22
                                       of an NPSL lease call an
                                       audit in accordance with
                                       the terms of their
                                       operating agreement, the
                                       ONRR Director shall be
                                       notified of the audit
                                       call . . .
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1220.033(b)(2)......................  (b)(2) If DOI determines                 2              11              22
                                       to call for an audit, DOI
                                       shall notify the lessee
                                       of its audit call and set
                                       a time and place for the
                                       audit . . . The lessee
                                       shall send copies of the
                                       notice to the
                                       nonoperators on the lease
                                       . . .
1220.033(e).........................  (e) Records required to be    The Office of Regulatory Affairs determined
                                       kept under Sec.               that the audit process is exempt from the
                                       1220.030(a) shall be made   Paperwork Reduction Act of 1995 because ONRR
                                       available for inspection    staff asks non-standard questions to resolve
                                       by any authorized agent                      exceptions.
                                       of DOI . . .
                                     ---------------------------------------------------------------------------
    Total Burden....................  ..........................  ..............             210           1,926
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\1\ 11 NPSL reports x 12 months = 132 reports

    Estimated Annual Reporting and Recordkeeping ``Non-hour'' Cost 
Burden: We have not identified a ``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: Section 3506(c)(2)(A) of the PRA requires each agency to 
``. . . provide 60-day notice in the Federal Register . . . and 
otherwise consult with members of the public and affected agencies 
concerning each proposed collection of information . . .'' Agencies 
must specifically solicit comments to: (1) Evaluate whether the 
proposed

[[Page 28948]]

collection of information is necessary for the agency to perform its 
duties, including whether the information is useful; (2) evaluate the 
accuracy of the agency's estimate of the burden of the proposed 
collection of information; (3) enhance the quality, usefulness, and 
clarity of the information that ONRR collects; and (4) 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 that you use to estimate (1) major cost factors, 
including system and technology acquisition, (2) expected useful life 
of capital equipment, (3) discount rate(s), and (4) the period over 
which you incur costs. Capital and startup costs include, among other 
items, computers and software that you purchase to prepare for 
collecting information and 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 Federal 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, free of charge, upon request. We also will post the ICR at 
http://www.onrr.gov/Laws_R_D/FRNotices/FRInfColl.htm.
    Public Comment Policy: ONRR will post all comments, including names 
and addresses of respondents at http://www.regulations.gov. Before 
including Personally Identifiable Information (PII), such as your 
address, phone number, email address, or other personal information in 
your comment(s), you should be aware that your entire comment 
(including PII) may be made available to the public at any time. While 
you may ask us, in your comment, to withhold PII from public view, we 
cannot guarantee that we will be able to do so.
    ONRR Information Collection Clearance Officer: David Alspach (202) 
219-8526.

    Dated: May 6, 2014.
Gregory J. Gould,
Director, Office of Natural Resources Revenue.
[FR Doc. 2014-11559 Filed 5-19-14; 8:45 am]
BILLING CODE 4310-T2-P