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Agency Information Collection Activities: Proposed Collection, Comment Request

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Minerals Management Service (MMS), Interior.


Notice of an extension of a currently approved information collection (OMB Control Number 1010-0136).


To comply with the Paperwork Reduction Act (PRA) of 1995, 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. The information collection request (ICR) is titled “30 CFR part 206, Subpart C, Federal Oil Valuation'.

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Submit written comments on or before December 9, 2002.


Submit written comments to Sharron L. Gebhardt, Regulatory Specialist, Minerals Management Service, Minerals Revenue Management, P.O. Box 25165, MS 320B2, Denver, Colorado 80225. If you use an overnight courier service, our courier address is Building 85, Room A-614, Denver Federal Center, Denver, Colorado 80225. You may also e-mail your comments to us at Include the title of the information collection and the OMB control number in the “Attention” line of your comment. Also include your name and return address. Submit electronic comments as an ASCII file avoiding the use of special characters and any form of encryption. If you do not receive a confirmation we have received your e-mail, contact Ms. Gebhardt at (303) 231-3211.

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Sharron L. Gebhardt, telephone (303) 231-3211, FAX (303) 231-3385 or e-mail

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Title: 30 CFR Part 206, Subpart C, Federal Oil Valuation.

OMB Control Number: 1010-0136.

Abstract: The Department of the Interior (DOI) is responsible for matters relevant to mineral resource development on Federal and Indian lands and the Outer Continental Shelf (OCS). The Secretary of the Interior is responsible for managing the production of minerals from Federal and Indian lands and the OCS, collecting royalties from lessees who produce minerals, and distributing the funds collected in accordance with applicable laws. MMS assists the Secretary in performing the royalty management functions.

Section 101(a) of the Federal Oil and Gas Royalty Management Act of 1982 (FOGRMA), as amended, requires that the Secretary “establish a comprehensive inspection, collection, and fiscal and production accounting and auditing system to provide the capability to accurately determine oil and gas royalties, interest, fines, penalties, fees, deposits, and other payments owed, and collect and account for such amounts in a timely manner.” In order to accomplish these tasks, MMS developed valuation regulations for Federal leases at 30 CFR part 206, subpart C. Market value is a basic principle underlying royalty valuation. Consequently, these regulations include methods to capture the true market value of crude oil produced from Federal leases, both onshore and offshore.

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 (royalty) of the value received from production from the leased lands. The lease creates a business relationship between the lessor and the lessee. The lessee is required to report various kinds of information to the lessor relative to the disposition of the leased minerals. Such information is similar to data reported to private and public mineral interest owners and is generally available within the records of the lessee or others involved in developing, transporting, processing, purchasing, or selling of such minerals. The information collected includes data necessary to assure that the royalties are paid appropriately. The valuation regulations at 30 CFR part 206, subpart C, require companies to collect and/or submit information used to value their Federal oil.

Frequency: Annually.

Estimated Number and Description of Respondents: 61 Federal lessees.

Estimated Annual Reporting and Recordkeeping “Hour” Burden: The annual reporting burden for this information collection is 12,431 hours. At an hourly rate of $50, we estimate the total annual cost to industry is $621,550. See the table below for a breakdown of the burden by CFR section and paragraph.

30 CFR 206 sectionReporting requirementsBurden hours per responseAnnual number of responsesAnnual burden hours
206.103(a), (b), (c) & (e)Calculate value of oil not solid at arm's-lengthCategory 1 = 222.50 1 Category 2 = 116.00 2 Category 3 = 31.25 313 4 282,892 464 875
Obtain MMS approval for tendering program4002800
Obtain MMS approval for alternative valuation methodology4002800
Obtain MMS approval to use value determined at refinery3301330
206.107(a)Request a value determination from MMS33082,640
206.110(b), (c) and (e)Propose transportation cost allocation method to MMS when transporting more than one liquid product under an arm's-length contract3301330
Propose transportation cost allocation method to MMS when transporting gaseous and liquid products under an arm's-length contract3301330
You must obtain MMS approval before claiming a transportation factor in excess of 50 percent of the base price of the product3301330
206.111(g), (k) and (l)Propose change of depreciation method for non-arm's-length transportation allowances to MMS3301330
Propose transportation cost allocation method to MMS when transporting more than one liquid product under a non-arm's-length contract3301330
Propose transportation cost allocation method to MMS when transporting gaeous and liquid product under a non-arm's-length contract3301330
206.112(b) and (f)Request MMS approval for location/quality adjustment under non-arm's-length exchange agreements3301330
Request MMS for location/quality adjustment when information is not available33041,320
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1 Category 1 lessees are companies with over 30 million barrels of domestice production.
2 Category 2 lessees are companies with between 10 and 30 million barrels of annual domestic production.
3 Category 3 lessees are companies with less than 10 million barrels of annual domestic production.

MMS is requesting OMB's approval to continue to collect this information. Not collecting the information would limit the Secretary's ability to discharge his/her duties and may also result in loss of royalty payments. Proprietary information submitted is protected, and there are no questions of a sensitive nature included in this information collection.

Estimated Annual Reporting and Recordkeeping “Non-hour Cost” Burden: We have identified no “non-hour” cost burdens.

Comments: The PRA (44 U.S.C. 3501, et seq.) provides 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. Before submitting an ICR to OMB, PRA Section 3506(c)(2)(A) requires each agency “* * * to provide notice * * * and otherwise consult with members of the public and affected agencies concerning each proposed collection of information * * *.” Agencies must specifically solicit comments to: (a) Evaluate whether the proposed collection of information is necessary for the agency to perform its duties, including whether the information is useful; (b) evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information; (c) enhance the quality, usefulness, and clarity of the 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. We have not identified non-hour cost burdens for this information collection. 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, 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 and the ICR will also be posted on our Web site at​Laws_​R_​D/​FRNotices/​FRInfColl.htm.

Public Comment Policy: We will post all comments in response to this notice on our Web site at​Laws_​R_​D/​FRNotices/​FRInfColl.htm. We will also make copies of the comments available for public review, including names and addresses of respondents, during regular business hours at our offices in Lakewood, Colorado. Individual respondents may request we withhold their home address from the public record, which we will honor to the extent allowable by law. There also may be circumstances in which we would withhold from the rulemaking record a respondent's identity, as allowable by law. If you request that we withhold your name and/or address, state this prominently at the beginning of your comment. However, we will not consider anonymous comments. We will make all submissions from organizations or businesses, and from individuals identifying themselves as representatives or officials of organizations or businesses, available for public inspection in their entirety.

MMS Information Collection Clearance Officer: Jo Ann Lauterbach, (202) 208-7744.

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Dated: October 2, 2002.

Lucy Querques Denett,

Associate Director for Minerals Revenue Management.

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[FR Doc. 02-25705 Filed 10-8-02; 8:45 am]