63FR66839 Onshore Oil and Gas Leasing and Operations, Part 7/11
robop...@us.govnews.org
Posting-number: Volume 63, Issue 232, Page 66839, Part 1
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Sec. 3106.84 How do I apply to make a heavy oil reduced royalty rate
effective on my Federal lease?
You must notify BLM in writing that you want a heavy oil royalty
rate reduction and provide--
(a) The BLM case number of the Federal lease for which you want a
reduced rate;
(b) The BLM case number of any communitization or unit agreement
that allocates production to the lease;
(c) Names of all operators on the lease;
(d) The reduced royalty rate that you have determined for your
lease; and
(e) Copies of the Purchaser's Statements that document your
calculations of weighted average gravity.
Sec. 3106.85 When will the initial heavy oil reduced royalty rate be
in effect on my Federal lease?
The heavy oil reduced royalty rate will be in effect on the first
day of the second month after you notify BLM as required in
Sec. 3106.84.
Sec. 3106.86 How long will the initial heavy oil reduced royalty rate
be in effect on my Federal lease?
(a) The reduced royalty rate will apply to all oil you produce from
your lease for the next 12 months after the reduced rate becomes
effective.
(b) The reduced royalty rate will also apply for two months
following the end of the initial 12-month period while you determine
what your royalty rate will be for the next period under Sec. 3106.87.
Sec. 3106.87 How do I determine my royalty rate after the initial
reduced royalty rate period expires?
(a) Within two months after the end of the initial 12-month period,
you must--
(1) Calculate the weighted average oil gravity for your property
for that initial 12-month period just concluded, using the formula in
Sec. 3106.82;
(2) Determine your royalty rate from the table in Sec. 3106.83; and
(3) Notify BLM in writing, providing the information required in
Sec. 3106.84.
(b) If you do not notify BLM as required in paragraph (a) of this
section within two months after the end of any 12-month period for
which you received a reduced royalty rate, the royalty rate will return
to the rate in the terms of your Federal lease.
Sec. 3106.88 When will subsequent royalty rate reductions become
effective on my Federal lease?
Any heavy oil royalty rate reductions after the initial 12-month
period will become effective for oil you produce in the third month
after the prior 12-month royalty reduction period ends. For example: On
September 30, 1997, at the end of a 12-month royalty reduction period,
you determine the weighted average API oil gravity for your property
for that period just ended. You then determine your new heavy oil
royalty rate by using the table in this section and notify BLM within
two months. The new royalty rate would be effective December 1, 1997
through January 31, 1999. Between December 1, 1998 and January 31,
1999, you would calculate the next royalty rate based on production
from December 1, 1997 through November 30, 1998, that would be
effective February 1, 1999 through March 31, 2000.
Sec. 3106.89 What provisions apply when I begin paying royalty at a
reduced rate?
(a) The reduced royalty rate applies only to oil that is produced
from or which is allocated to your Federal lease.
(b) You may not intentionally manipulate the API gravity to obtain
a reduced royalty rate.
(c) You continue to be subject to the minimum royalty provisions of
your lease.
(d) You may be eligible for both a stripper royalty rate reduction
and a heavy oil royalty rate reduction. If you are eligible for both
the stripper royalty rate reduction and the heavy oil royalty rate
reduction, use the lower of the two royalty rates.
Sec. 3106.90 What happens if I make a mistake when I calculate the
reduced heavy oil royalty rate for my lease?
If you made an error calculating the heavy oil royalty rate, BLM
will determine the correct rate for your lease and notify you in
writing of the change. You must adjust your royalty reports and
payments to MMS accordingly.
Sec. 3106.91 What happens if I manipulate production from my heavy oil
property in order to get a reduced royalty rate?
(a) If BLM determines that you manipulated production to obtain a
heavy oil royalty rate reduction, BLM will terminate your royalty rate
reduction retroactively to its effective date. You may also be subject
to civil or criminal penalties.
(b) You must pay the difference in royalty between the manipulated
rate and the unmanipulated rate as well as any interest and
underpayment charges.
Sec. 3106.92 How long will the heavy oil property royalty reduction
program be in effect?
(a) BLM may suspend or terminate your heavy oil property royalty
reductions if--
(1) The average oil price has remained above $24 per barrel over a
period of six consecutive months (based on the WTI Crude average posted
prices and adjusted for inflation using the implicit price deflator for
gross national product with 1991 as the base year); or
(2) After September 10, 1999, the Secretary determines that the
heavy oil royalty reductions are not reducing the loss of otherwise
recoverable reserves, the Secretary may terminate heavy oil royalty
reductions granted under the program.
(b) BLM must give you six months notice of the termination of the
program by publishing a notice in the Federal Register.
Subpart 3107--Lease, Surety and Personal Bonds
General Information
Sec. 3107.10 Who may file an oil and gas lease bond?
Either the record title owner, operating rights owner or operator
may file a bond. The bond must guarantee the compliance of all record
title owners, operating rights owners and operators for the lease.
Sec. 3107.11 Who must a bond cover?
The bond must cover all record title owners (lessees), operating
rights owners and operators and anyone who conducts operations on your
lease, unless any one of those persons provides its own bond.
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Sec. 3107.12 When must I file a bond?
BLM must have a bond, under this subpart, before it will approve--
(a) An Application for Permit to Drill;
(b) Surface disturbing activities; or
(c) A transfer of record title or operating rights on a lease which
has outstanding obligations, including reclamation.
Sec. 3107.13 What must my bond cover?
Your bond must guarantee performance and compliance with the lease
terms and cover all liabilities arising from or related to drilling
operations on a Federal lease including the following obligations--
(a) Complete and timely plugging of well(s);
(b) Reclamation of the lease area;
(c) Restoration of any lands or surface waters adversely affected
by lease development;
(d) Payments owed to the United States Government such as
royalties, rentals, civil penalties, fines and assessments;
(e) Compensatory royalties assessed to compensate for drainage; and
(f) Other requirements related to operations and compliance with
all lease terms and conditions, regulations, orders and notices to
lessees.
Sec. 3107.14 What are the dollar amounts for bonds?
(a) Bonds covering a single lease must be $20,000;
(b) Bonds covering all of your leases in one State must be $75,000;
(c) Bonds covering all of your leases in all States must be
$150,000; and
(d) BLM may adjust the bond amounts in paragraphs (a) through (c)
under Sec. 3107.50.
Sec. 3107.15 What kinds of bonds will BLM accept?
BLM will accept--
(a) Surety bonds, provided that the surety company is approved by
the Department of Treasury (See Department of the Treasury Circular No.
570); and
(b) Personal bonds, which are pledges of cashier's checks,
certified checks, certificates of deposit, irrevocable letters of
credit, or negotiable Treasury securities.
Sec. 3107.16 Will BLM accept cash for personal bonds?
BLM will not accept cash for personal bonds.
Sec. 3107.17 Is there a special bond form I must use?
You must use a current bond form (Form 3000-4 or 3000-4a) approved
by BLM's Director.
Sec. 3107.18 Is there any other documentation that I must file with a
surety bond?
You must include a power of attorney or other proof of an agent's
authority to sign on behalf of the surety. BLM will accept copies of
powers of attorney.
Sec. 3107.19 Where must I file my bond?
(a) File a signed original of the bond instrument in the BLM State
Office with jurisdiction over your lease or operations. BLM will not
accept copies.
(b) File your nationwide bond in any BLM State Office.
Sec. 3107.20 How do I modify the terms and conditions of my bond?
(a) Modify the terms and conditions of your bond or adjust the bond
amount by filing a rider with BLM. No special form is required;
(b) If your bond is a surety bond, any rider must also be signed by
your surety's agent and filed with a power of attorney for that agent;
and
(c) You must file bond riders for BLM approval in the BLM State
Office where your bond is located.
Certificates of Deposit, Letters of Credit and Negotiable Treasury
Securities
Sec. 3107.30 What may I use to back my personal bond?
BLM accepts negotiable treasury securities, certificates of deposit
and irrevocable letters of credit issued by Federally-insured financial
institutions authorized to do business in the United States to back a
personal bond.
Sec. 3107.31 Are there special terms that must be included in a
certificate of deposit to use it to back my bond?
If you use a certificate of deposit to back your bond, it must
indicate on its face that Secretarial approval is required prior to
redemption by any party.
Sec. 3107.32 Are there special terms that must be included in an
irrevocable letter of credit to use it to back my bond?
Your irrevocable letter of credit (LOC) used to back a bond must
include a clause that grants the Secretary authority to demand
immediate payment if you default or fail to replace the LOC within 30
calendar days from its expiration date. The LOC must be--
(a) Payable to the Department of the Interior, BLM;
(b) Irrevocable during its term and have an initial expiration date
of not less than one year following the date BLM receives it; and
(c) Automatically renewable for a period of not less than one year,
unless the issuing financial institution provides BLM with written
notice at least 90 calendar days before the letter of credit's
expiration date that it will not be renewed.
Sec. 3107.33 What special requirements are there for negotiable
treasury securities?
(a) Negotiable treasury securities used to back a bond must--
(1) Have a market value equal to the bond amount; and
(2) Be accompanied by a statement granting full authority to the
Secretary to sell such securities in case of a default of the terms of
the lease.
(b) You must monitor their value and provide additional security if
their market value falls below the required bond amount.
Bonding and Lease Transfers or Operations
Sec. 3107.40 What are BLM's bonding requirements when a lease interest
is transferred to another party?
(a) If the existing operator is providing the bond and there will
be no change in operator, BLM will not require the transferee of a
lease interest to file a bond. BLM may require a statement confirming
there will be no change in operator.
(b) If lease interests are transferred and there will be a change
in operator, the new operator must provide a bond or furnish evidence
that the new lessee will cover the operator with a bond.
Bond Adjustments
Sec. 3107.50 May BLM adjust my bond amount?
(a) BLM may increase your bond amount.
(b) BLM may decrease your bond amount if it determines that your
obligations under your bond are less than the existing bond amount.
Sec. 3107.51 What factors will BLM use to determine whether my bond
will be adjusted?
Factors BLM uses to determine your bond amount include, but are not
limited to, your--
(a) Record of previous violations;
(b) Uncollected royalties; and
(c) Plugging and reclamation costs.
Sec. 3107.52 When will BLM increase my bond amount?
BLM will increase your bond amount if--
(a) You file an Application for Permit to Drill and within the five
previous years BLM has made a claim against your bond because you
failed to properly plug a well or completely reclaim any areas of
surface associated with lease operations;
(b) You have a well classified as inactive under Sec. 3107.55; or
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(c) It determines an increase is necessary to satisfy your
obligations under the bond.
Sec. 3107.53 When will BLM decrease my bond amount?
BLM will decrease your bond amount if--
(a) You apply to BLM and request a decrease in bond amount; and
(b) BLM approves your application.
Sec. 3107.54 To what amount may BLM adjust my bond?
BLM may adjust your bond to an amount that does not exceed the
total of--
(a) Estimated costs to have BLM plug and reclaim all wells and
areas of surface use associated with lease operations;
(b) Uncollected royalties due; and
(c) Outstanding monies due from previous violations.
Sec. 3107.55 What is an inactive well?
For the purposes of Secs. 3107.52 and 3107.56 only, an inactive
well is any well that for the last 12 months has not--
(a) Produced oil or gas;
(b) Been actively used as a service or water source well; or
(c) Been actively drilled or reworked.
Sec. 3107.56 What additional security must I provide for an inactive
well?
Within 30 calendar days after your well becomes inactive you must--
(a) Submit to BLM additional bonding, either as a rider to your
existing BLM bond or as a separate bond, in an amount equal to $2.00
per foot of total depth or plugged-back total depth of your inactive
well. Each inactive well you maintain is subject to a bond increase
unless you demonstrate to BLM that your existing bond exceeds the
maximum bond amount under Sec. 3107.51;
(b) Submit to BLM a $100 nonrefundable payment for each inactive
well. You must submit the $100 payment for each 12-consecutive month
period that your well remains inactive. This option is available to you
only for the first six years your well is inactive. After six years of
inactive status, you must file the additional bonding set out in
paragraph (a) of this section, in lieu of this payment; or
(c) Comply with the requirements of Sec. 3145.23.
Bond Collection After you Default
Sec. 3107.60 Under what circumstances will BLM demand performance or
payment under my bond?
BLM will demand performance or payment under your bond for
noncompliance with the lease terms, governing regulations or BLM orders
including--
(a) Well plugging and abandonment;
(b) Reclamation of the lease area;
(c) Royalty payments and related interest or penalties that have
accrued;
(d) Assessed royalties to compensate for drainage; or
(e) Payment of penalties or assessments for violations.
Sec. 3107.61 As the principal on the bond, may BLM require me to
restore the face amount of my bond or require me to replace my bond
after BLM makes demand against it?
After the bond is reduced by the amount required to remedy
noncompliance, you must either--
(a) Post a new bond of equal value to the original bond within 60
calendar days after BLM notified you that the bond is deficient; or
(b) Restore the existing bond(s) to the amount previously held
within 60 calendar days after BLM notifies you that the bond is
deficient.
Sec. 3107.62 What if I do not restore the face amount or file a new
bond within 60 calendar days after BLM notifies me?
If you do not restore the face amount of the bond on file, or file
a new bond after BLM notifies you that your bond is deficient--
(a) BLM will require you to shut down operations; or
(b) Your leases covered by the bond are subject to cancellation
under subpart 3144.
Bond Cancellation
Sec. 3107.70 After I fulfill all of the lease terms and conditions,
will BLM cancel my bond?
BLM will cancel your bond after you have--
(a) Fulfilled all of the lease terms and conditions;
(b) Completed all plugging and reclamation requirements of subpart
3159 for the wells covered by your bond; and
(c) Paid all outstanding rents, royalties, interest, assessments,
or penalties due to noncompliance.
Sec. 3107.71 Will BLM cancel my bond if I transferred all of my lease
interests or operations to another bonded party?
BLM will cancel your bond following approval of the transfer of
your lease interests or a change of operator if that party provides a
bond that assumes all of your existing liabilities.
Sec. 3107.72 When will BLM release the collateral backing my personal
bond?
BLM will release the collateral backing your personal bond when we
cancel it.
Subpart 3108--Geophysical Exploration Bond Requirements
Geophysical Exploration Bonds
Sec. 3108.10 Must I file a bond before starting an exploration
project?
You must file a bond with the BLM State office with jurisdiction
over the lands before each planned exploration project.
Sec. 3108.11 What are the dollar amounts for geophysical bonds?
Bonds covering--
(a) A single exploration operation must be $5,000.
(b) Your exploration operations in one State must be $25,000;
(c) Your exploration operations in all States must be $50,000; and
(d) BLM may adjust the bond amounts under Sec. 3108.14.
Sec. 3108.12 Is there a special bond form I must use?
You must use a current bond form approved by BLM's Director for
either a surety bond or a personal bond.
Sec. 3108.13 May I use an oil and gas lease bond to cover exploration
operations?
(a) If you hold an individual, statewide or nationwide oil and gas
lease bond, you may conduct exploration on leases in which you hold an
interest without further bonding.
(b) If you hold a statewide or nationwide bond and intend to
conduct exploration on lands that you do not have under lease, you must
obtain a rider, subject to BLM approval, to include such oil and gas
exploration operations under the bond.
Sec. 3108.14 Will BLM increase my bond amount?
BLM may increase your bond amount if it determines that additional
coverage is necessary to protect the lands or resources.
Sec. 3108.15 When will BLM cancel my geophysical bond?
If you request it, BLM will cancel your bond after you--
(a) Satisfy the terms and conditions of your notice(s) of intent or
permit(s) to conduct geophysical exploration operations; and
(b) Complete any additional reclamation BLM or the surface
management agency requires after you file a notice of completion.
[[Page 66895]]
Sec. 3108.16 What will happen if I do not complete additional
reclamation that BLM requests?
If you do not complete reclamation, BLM will--
(a) Demand performance or payment under your bond to cover the
costs of reclamation; and
(b) Initiate judicial action to compel performance or to recover
the costs of reclamation.
2. Revise part 3110--Noncompetitive Leases to read as follows:
PART 3110--OIL AND GAS GEOPHYSICAL EXPLORATION
Subpart 3110--Onshore Oil and Gas Geophysical Exploration
General Provisions
Sec.
3110.10 When must I have BLM authorization to conduct geophysical
exploration operations?
3110.11 When would the requirements of this subpart not apply to my
activities?
3110.12 When may BLM suspend or cancel my right to conduct
geophysical exploration?
3110.13 What is the fee to use BLM lands to conduct geophysical
exploration operations?
Subpart 3112--Geophysical Exploration Outside of Alaska
Notice of Intent
3112.10 What must I file to conduct oil and gas geophysical
exploration operations?
3112.11 When must I file my NOI and what action will BLM take?
3112.12 May BLM require that I participate in a field review as a
part of the filing process?
Notice of Completion
3112.20 When must I file a notice of completion of operations?
3112.21 What action will BLM take on my notice of completion?
Subpart 3113--Geophysical Exploration In Alaska (Outside the Arctic
National Wildlife Refuge)
Exploration Permit Application
3113.10 How do I apply for an oil and gas geophysical exploration
permit?
3113.11 What action will BLM take on my permit application?
3113.12 What terms and conditions will BLM include in my permit?
Exploration Permit
3113.20 When is my exploration permit effective and what is its
duration?
3113.21 May I relinquish my exploration permit?
3113.22 When can my exploration permit be modified?
Data and Inforamtion Obligations
3113.30 Must I collect and submit all data which I obtain while
performing exploration operations under the permit?
3113.31 When may BLM disclose such data?
Completion Report
3113.40 What does BLM require after I complete operations under my
exploration permit?
3113.50 What if my exploration operation is on unleased lands
managed by the Department of Defense (DOD)?
Authority: 16 U.S.C. 3150(b) and 668dd; 30 U.S.C. 189 and 359;
42 U.S.C. 6508; and 43 U.S.C. 1201, 1732(b), 1733, 1734 and 1740.
Subpart 3110--Onshore Oil and Gas Geophysical Exploration
General Provisions
Sec. 3110.10 When must I have BLM authorization to conduct geophysical
exploration operations?
(a) You must obtain BLM authorization before you conduct
geophysical exploration--
(1) On public lands, if BLM manages the surface;
(2) On unleased public lands managed by another agency, if that
agency and BLM agree for BLM to process your application to conduct
geophysical exploration operations according to the regulations in this
part; and
(3) Under the rights granted by any Federal oil and gas lease,
unless the Forest Service manages the surface.
(b) If you conduct geophysical exploration outside of the rights
granted by a Federal oil and gas lease on lands where BLM does not
manage the surface, you may need authorization from the surface
management agency or surface owner.
Sec. 3110.11 When would the requirements of this subpart not apply to
my activities?
The requirements of this subpart do not apply to--
(a) Casual use activities. Gravity or magnetic surveys, the
placement of recording equipment, and activities that do not involve
vehicle operations that would cause significant compaction or rutting
are generally considered casual use; and
(b) Operations you conduct on private surface overlying Federal
minerals, unless you conduct operations under the rights granted by a
Federal oil and gas lease.
Sec. 3110.12 When may BLM suspend or cancel my right to conduct
geophysical exploration?
(a) If BLM determines that you have violated any of the terms or
conditions of your subpart 3112 Notice of Intent to conduct oil and gas
geophysical operations or of your exploration permit in Alaska under
subpart 3113, BLM may suspend or cancel your right to conduct
exploration. BLM will provide notice to you before it suspends or
cancels your right to conduct exploration.
(b) BLM may order an immediate temporary suspension of your
geophysical activities until a hearing or final administrative finding,
if it determines that a suspension is necessary to protect public
health and safety or the environment.
Sec. 3110.13 What is the fee to use BLM lands to conduct geophysical
exploration operations?
BLM will--
(a) Determine the fair market value fee (FMV) for your use of
public lands for each notice of intent or exploration permit, if BLM
manages the surface;
(b) Base the FMV on the size of the area physically affected; and
(c) Not charge a FMV for portions of your geophysical exploration
operation you are conducting on your Federal lease or on behalf of the
Federal lessee.
Subpart 3112--Geophysical Exploration Outside of Alaska
Notice of Intent
Sec. 3112.10 What must I file to conduct oil and gas geophysical
exploration operations?
Before you conduct oil and gas geophysical exploration, you must
submit a Notice of Intent (NOI) to Conduct Oil and Gas Geophysical
Exploration Operations, Form 3150-4, and provide BLM information to
determine a FMV according to Sec. 3110.13.
Sec. 3112.11 When must I file my NOI and what action will BLM take?
(a) You must file a NOI at least 14 business days before you plan
to start operations and BLM will review and process it according to--
(1) BLM land use planning decisions for geophysical exploration in
the area where you plan to conduct operations; or
(2) Your lease terms, if you conduct geophysical exploration under
the rights granted by your lease and the lease was issued before the
effective date of the applicable land use plan.
(b) BLM will give you a copy of the Terms and Conditions for Notice
of Intent to Conduct Geophysical Exploration, Form 3150-4a, and other
conditions which you must sign and follow to--
(1) Protect the public lands from unnecessary and undue
degradation; and
[[Page 66896]]
(2) Assure compliance with applicable laws for the protection of
the environment;
(c) BLM will notify you--
(1) If it cannot process your NOI and why; or
(2) Why processing will be delayed and when you can expect BLM to
complete processing.
(d) BLM will not authorize your NOI until you pay the required FMV.
Sec. 3112.12 May BLM require that I participate in a field review as a
part of the filing process?
BLM may require you to participate in a field review of your
proposal to conduct geophysical operations. The purpose of this review
is to complete development of the terms and conditions of your NOI.
Notice of Completion
Sec. 3112.20 When must I file a notice of completion of operations?
You must submit a Notice of Completion of Oil and Gas Exploration
Operations, Form 3150-5, to BLM 30 calendar days after completing
operations, including reclamation activities.
Sec. 3112.21 What action will BLM take on my notice of completion?
After you file Form 3150-5, BLM will notify you whether your
reclamation is satisfactory or whether you must perform additional
reclamation, specifying the nature and extent of further actions you
must take.
Subpart 3113--Geophysical Exploration In Alaska (Outside the Arctic
National Wildlife Refuge)
Exploration Permit Application
Sec. 3113.10 How do I apply for an oil and gas geophysical exploration
permit?
If you plan to conduct oil and gas geophysical exploration
operations in Alaska, you must--
(a) Complete an application for an oil and gas geophysical
exploration permit that fully describes and illustrates your plans for
conducting exploration operations;
(b) Provide evidence that you have bond coverage according to the
requirements of subpart 3108; and
(c) Provide BLM information to determine a FMV according to
Sec. 3110.13. BLM will not approve your permit until you pay the
required FMV.
Sec. 3113.11 What action will BLM take on my permit application?
(a) BLM will--
(1) Review your application and approve or disapprove it; or
(2) Notify you if processing will be delayed, why it will be
delayed, and when BLM will complete processing.
(b) BLM will only authorize exploration for lands subject to
section 1008 of the Alaska National Interest Lands Conservation Act (16
U.S.C. 3148), after it determines that you can conduct exploration
activities in a manner consistent with BLM's management of the affected
area.
Sec. 3113.12 What terms and conditions will BLM include in my permit?
BLM will include--
(a) Terms and conditions necessary to protect mineral and
nonmineral resources;
(b) Terms to insure that your operations are consistent with BLM's
management of the affected area, if your proposal occurs on lands
subject to section 1008 of the Alaska National Interest Lands
Conservation Act (16 U.S.C. 3148); and
(c) Reasonable conditions, restrictions and prohibitions, if you
plan to conduct geophysical operations within the National Petroleum
Reserve in Alaska, to--
(1) Mitigate adverse effects upon the surface resources of the
reserve; and
(2) Satisfy the requirement of section 104(b) of the Naval
Petroleum Reserves Production Act of 1976 (42 U.S.C. 6504).
Exploration Permit
Sec. 3113.20 When is my exploration permit effective and what is its
duration?
(a) An exploration permit is valid for one year after the effective
date specified by BLM; and
(b) BLM may renew your exploration permit for an additional year if
you submit a written request.
Sec. 3113.21 May I relinquish my exploration permit?
You may relinquish all or part of your exploration permit by filing
a request for relinquishment with BLM. BLM will approve the
relinquishment, provided you and your surety comply with the terms and
conditions of your exploration permit and the regulations in this part.
Sec. 3113.22 Can my exploration permit be modified?
(a) BLM may approve your proposal to modify your exploration
permit; and
(b) BLM may, after consulting with you, require you to modify your
exploration permit.
Data and Information Obligations
Sec. 3113.30 Must I collect and submit all data which I obtain while
performing exploration operations under the permit?
You must collect and submit to BLM all data which you obtain while
conducting exploration operations.
Sec. 3113.31 When may BLM disclose such data?
BLM will manage this data according to the Freedom of Information
Act and 43 CFR part 2.
Completion Report
Sec. 3113.40 What does BLM require after I complete operations under
my exploration permit?
Within 30 calendar days after completing all operations under the
permit you must submit a completion report that describes and
illustrates the work that you performed and any reclamation activity
completed or planned. BLM will review the completion report and notify
you of any additional measures which you must perform to correct damage
to the lands and resources.
Sec. 3113.50 What if my exploration operation is on unleased lands
managed by the Department of Defense (DOD)?
If the DOD refers your geophysical exploration permit application
to BLM for issuance--
(a) BLM will follow the provisions of subpart 3113 to process your
permit; and
(b) DOD must consent to BLM issuance of your permit and may impose
terms and conditions on your permit.
3. Revise part 3120--Competitive Leases to read as follows:
PART 3120--OIL AND GAS LEASING
Subpart 3120--Leasing (General)
Leasing: General
Sec.
3120.10 What public lands may BLM lease for oil and gas under this
subpart?
3120.11 What units of the National Park System are subject to oil
and gas leasing?
3120.12 May BLM lease minerals under the jurisdiction of an agency
outside of the Department of the Interior?
National Wildlife Refuge System Lands
3120.20 What are National Wildlife Refuge System lands?
3120.21 May BLM lease lands that are within the National Wildlife
Refuge System?
Coordination Lands
3120.30 What are coordination lands?
3120.31 May BLM lease coordination lands?
3120.32 May BLM lease lands within a wildlife refuge in Alaska?
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3120.33 May BLM lease lands within Recreation and Public Purposes
leases or patents?
3120.34 May a lease contain both acquired and public domain
minerals?
Oil and Gas Lease Administration
3120.40 For Federal lands, what types of leases does BLM issue or
administer?
3120.41 For each type of lease, what is the primary lease term,
maximum lease size, administrative filing fee, and advance annual
rental rate?
Subpart 3121--Competitive Leasing
Notice of Competitive Lease Sale
3121.10 How does BLM provide notice of what lands are available for
competitive oil and gas leasing?
3121.11 What information will BLM include in the Notice of
Competitive Lease Sale?
3121.12 How does BLM decide which lands to include in a Notice of
Competitive Lease Sale?
3121.13 What types of lands may I include in my letter of
nomination?
Legal Descriptions
3121.20 How should I describe the lands in my letter of nomination?
3121.21 What other rules must I follow when I submit my nomination
letter?
Future Interest Leasing
3121.30 May I submit a nomination letter for mineral interests that
will vest in the United States in the future and how will BLM offer
them?
Subpart 3122--Competitive Lease Sale
General
3122.10 How often must each BLM State Office hold competitive lease
sales?
3122.11 How are competitive oil and gas lease sales conducted?
3122.12 Is there a minimum per-acre amount that I must bid on a
parcel?
3122.13 If the United States owns a fractional interest (less than
100 percent of the mineral interest in a parcel), is the minimum bid
per acre prorated?
3122.14 How does BLM determine the winning bid?
3122.15 What documents must I submit on the day of the sale if I am
the winning bidder of a parcel?
3122.16 May I withdraw my bid?
3122.17 What must I pay per parcel at the sale if I am the winning
bidder?
3122.18 If I am the winning bidder for a future interest lease,
what payments must I make on the day of the sale?
Balance of Bonus Bid
3122.20 When is the balance of my bonus bid due?
3122.21 What happens if BLM does not receive the balance of my
bonus bid within 10 business days following the date of the sale?
Rejection of Bid
3122.30 Under what circumstances will BLM reject my bid?
3122.31 Are parcels for which BLM rejected bids available for
noncompetitive leasing during the two years after the sale?
Parcels That Receive No Bid at Oral Auction
3122.40 If a parcel receives no bid at the competitive lease sale,
is it available for noncompetitive leasing?
Subpart 3123--Noncompetitive Leasing
Parcels Available for Noncompetitive Lease Offers
3123.10 What parcels are available for noncompetitive lease offers?
3123.11 When do parcels that received no bid at the competitive
sale become available for noncompetitive leasing?
Priority of Noncompetitive Lease Offers
3123.20 What if more than one noncompetitive offer is filed for the
same parcel?
3123.21 If my noncompetitive offer requires a correction, under
what circumstances does it retain priority?
Descriptions of Lands in Noncompetitive Lease Offers
3123.30 How do I describe the lands in my offer I file the day
after the competitive lease sale?
3123.31 How do I describe the lands in my noncompetitive offer for
public domain or acquired minerals that I file within the two years
after the sale?
Requirements of a Noncompetitive Lease Offer
3123.40 How do I file a noncompetitive offer?
3123.41 If I file a noncompetitive future interest offer, when must
I pay the first year's advance rental?
3123.42 What happens to my noncompetitive offer if an earlier
offeror is entitled to a lease, either as a result of priority of
the offer, or a pending lease reinstatement?
3123.43 May I amend my noncompetitive lease offer before BLM issues
the lease?
3123.44 May I withdraw my noncompetitive lease offer?
Subpart 3124--Lease Administration and Renewals
Dating of Leases
3124.10 What is the effective date of my lease?
Leases Within Unit Agreements
3124.20 What if the lands I am leasing are within an existing unit
agreement?
3124.21 What effect does the commitment to a unit have on my lease
offer or lease?
Lease Consolidation
3124.30 May I consolidate leases?
3124.31 What information must I include in my application for lease
consolidation?
3124.32 How many copies of my application must I file and where
must I file it?
Lease Renewals
3124.40 For how many years will BLM renew my lease?
3124.41 For how many years will BLM renew my lease if it wasn't
issued under Section 14 of the Mineral Leasing Act?
3124.42 If my lease is committed to a unit agreement may I file a
renewal lease application?
3124.43 Who may file a renewal lease application?
3124.44 How must I file my renewal lease application?
Subpart 3125--Exchange Leases
Exchange Leases
3125.10 May I exchange my existing oil and gas lease for a new
lease?
3125.11 How must I file an exchange lease application?
Subpart 3126--Railroad Right-of-Way Leases
Railroad Right-of-Way Leases
3126.10 To which rights of way does this subpart apply?
3126.11 Who may lease the oil or gas deposits underlying a railroad
right-of-way?
3126.12 How must I file a lease application under this subpart?
3126.13 What information must my application include?
3126.14 Who must BLM notify that I filed an application to lease
the oil and gas under the right-of-way?
3126.15 Who may submit a bid for compensation?
3126.16 What must I include in my bid for compensation?
3126.17 Who must BLM notify that I have filed an application for
compensation?
3126.18 May BLM request offers to lease or for compensation?
3126.19 Who will receive the rights to the oil and gas underlying
the right-of-way?
3126.20 What is the term of my lease or agreement?
Subpart 3129--Record Title, Operating Rights and Estate Transfers, Name
Changes and Mergers
General
3129.10 What is a transfer?
3129.11 When must I file a transfer with BLM?
3129.12 Who may receive a transfer of lease interests?
3129.13 What must I include in my transfer application?
3129.14 When is my transfer effective?
3129.15 May I withdraw my transfer?
3129.16 May I file a record title transfer limited to a specific
depth, formation, zone or defined deposit or fluid mineral?
3129.17 May I file my operating rights transfer to a specific
depth?
3129.18 How do transfers of interest affect future transfers?
3129.19 When will BLM segregate a lease as a result of a transfer?
3129.20 What is a mass transfer?
3129.21 May I file a mass transfer?
3129.22 Does BLM's approval of a transfer certify that title is
clear?
[[Page 66898]]
Forms, Fees and Filing Requirements
3129.30 What forms must I use to transfer lease interests, how many
copies must I file, what is the filing fee per lease or document,
and where must I file them?
3129.31 Are filing fees refundable?
3129.32 How do I describe the lands on Form 3000-3 for my record
title transfer?
3129.33 May I transfer less than a legal subdivision?
3129.34 May I file a record title transfer containing less than 640
acres?
3129.35 What must I submit to BLM to transfer the rights or
interests of a decedent to its heir, devisee or estate?
3129.36 What must I submit to BLM for a merger or name change?
3129.37 Where must I file documentation of estate, merger and name
changes?
3129.38 As the transferee, what should I file to show I am
qualified to hold Federal lease interests?
3129.39 When must I file transfers with BLM?
3129.40 May I transfer an interest before BLM issues the lease?
Bonding, Obligations and Liabilities
3129.50 When will BLM require a new bond for a transfer?
3129.51 If I transfer my lease, when do my obligations under the
lease end?
3129.52 If I acquire a lease by an assignment or transfer, what
obligations do I agree to assume?
Denial/Disapproval
3129.60 When will BLM deny or disapprove a transfer to me?
3129.61 Must I file assignments of rights to production with BLM?
3129.62 May I file a lien against a lease for monies owed me?
3129.63 Must I file transfers of overriding royalty interest, net
profit or production payments with BLM?
Authority: 16 U.S.C. 3150(b) and 668dd; 30 U.S.C. 189, 306 and
359; 43 U.S.C. 1733, 1734 and 1740; and 10 U.S.C.A. 7439.
Subpart 3120--Leasing (General)
Leasing: General
Sec. 3120.10 What public lands may BLM lease for oil and gas under
this subpart?
This subpart applies to public domain and acquired minerals subject
to leasing under the Mineral Leasing Act, as amended (30 U.S.C. 181 et
seq.) and the Mineral Leasing Act for Acquired Lands (30 U.S.C. 351 et
seq.). This subpart does not apply to leasing minerals in--
(a) National Parks and the following units of the National Park
System except as provided at Sec. 3120.11;
(b) National monuments;
(c) Incorporated cities, towns and villages;
(d) National Petroleum Reserve-Alaska and Naval petroleum and oil
shale reserves, except Naval Oil Shale Reserves 1 and 3;
(e) Lands recommended for wilderness allocation by the surface
management agency;
(f) Lands within BLM wilderness study areas;
(g) Lands designated by Congress as wilderness study areas, except
where oil and gas leasing is specifically allowed to continue by the
statute designating the study area;
(h) Lands within areas allocated for wilderness or further planning
in Executive Communication 1504, Ninety-Sixth Congress (House Document
numbered 96-119), unless the lands are allocated to uses other than
wilderness by a land and resource management plan or have been released
to uses other than wilderness by an Act of Congress;
(i) Lands within the National Wilderness Preservation System,
subject to valid existing rights under section 4(d)(3) of the
Wilderness Act established before midnight, December 31, 1983;
(j) Lands north of 68 degrees north latitude and east of the
western boundary of the National Petroleum Reserve-Alaska;
(k) Arctic National Wildlife Refuge in Alaska;
(l) Any other lands withdrawn from leasing;
(m) Tidelands or submerged coastal lands within the continental
shelf adjacent or littoral to lands within the jurisdiction of the
United States; and
(n) Lands acquired by the United States for development of helium,
fissionable material deposits or other minerals essential to the
defense of the country, except oil, gas, and other minerals subject to
leasing under the Act.
Sec. 3120.11 What units of the National Park System are subject to oil
and gas leasing?
(a) The Secretary may allow oil and gas leasing in units of the
National Park System listed in paragraph (b) of this section if leasing
those lands would not have significant adverse effects on the
administration of the area and if lease operations can be conducted in
a manner that will preserve the scenic, scientific and historic
features contributing to public enjoyment of the area;
(b) BLM may lease oil and gas in--
(1) Lake Mead National Recreation Area as portrayed on the map
identified as ``boundary map'' 8360-80013B, revised February 1986;
(2) Whiskeytown Unit of the Whiskeytown-Shasta-Trinity National
Recreation Area as portrayed on the map identified as ``Proposed
Whiskeytown-Shasta-Trinity National Recreation Area,'' numbered BOR-WST
1004, dated July 1963. BLM may lease lands within the recreation area
under the jurisdiction of the Secretary of Agriculture under the
Mineral Leasing Act of 1920, as amended, or the Acquired Lands Mineral
Leasing Act of 1947, if disposition would not have significant adverse
effects on the purpose of the Central Valley Project or the
administration of the recreation area;
(3) Glen Canyon National Recreation Areas as portrayed on the map
identified as ``boundary map, Glen Canyon National Recreation Area,''
numbered GLC-91,006, dated August 1972; and
(4) Any other units of the National Park Service where Congress
authorizes leasing;
(c) BLM may not lease oil and gas in the--
(1) Lake Mead National Recreation Area--
(i) All waters of Lakes Mead and Mohave and all lands within 300
feet of those lakes measured horizontally from the shoreline at maximum
surface elevation; and
(ii) All lands within the unit of supervision of the Bureau of
Reclamation around Hoover and Davis Dams and all lands outside of
resource utilization zones as designated by the Superintendent on the
map (602-2291B., dated October 1987) of Lake Mead National Recreation
Area which is available for inspection in the Office of the
Superintendent;
(2) Whiskeytown Unit of the Whiskeytown-Shasta-Trinity National
Recreation Area--
(i) All waters of the Whiskeytown Lake and all lands within 1 mile
of that lake measured from the shoreline at maximum surface elevation;
(ii) All lands classified as high density recreation, general
outdoor recreation, outstanding natural and historic, as shown on the
map numbered 611-20,004B, dated April 1979, entitled ``Land
Classification, Whiskeytown Unit, Whiskeytown-Shasta-Trinity National
Recreation Area.'' This map is available for public inspection in the
Office of the Superintendent; and
(iii) All lands within section 34 of Township 33 North, Range 7
West, Mt. Diablo Meridian; or
(3) Glen Canyon National Recreation Area--Those units closed to
mineral disposition within the natural zone, development zone, cultural
zone and portions of the recreation and resource utilization zone as
shown on the map numbered 80,022A, dated March 1980, entitled ``Mineral
Management Plan--Glen Canyon National Recreation Area.'' This map is
available for public
[[Page 66899]]
inspection in the Office of the Superintendent and the offices of the
State Directors, Bureau of Land Management, Arizona and Utah.
Sec. 3120.12 May BLM lease minerals under the jurisdiction of an
agency outside of the Department of the Interior?
If minerals are under the jurisdiction of an agency outside the
Department of the Interior, BLM may lease--
(a) Acquired lands only after BLM receives consent from the surface
management agency;
(b) Public domain lands only after BLM has consulted with the
surface management agency; and
(c) National Forest System lands and lands withdrawn for use by the
Department of Defense, whether acquired or public domain, only with the
written consent of the surface management agency.
National Wildlife Refuge System Lands
Sec. 3120.20 What are National Wildlife Refuge System lands?
National Wildlife Refuge System lands are those lands under the
jurisdiction of the United States Fish and Wildlife Service included
within a withdrawal of public domain and acquired lands for the
protection of all species of wildlife within a particular area.
Sec. 3120.21 May BLM lease lands that are within the National Wildlife
Refuge System?
BLM may lease National Wildlife Refuge System lands only--
(a) If it is necessary to protect those lands from drainage; or
(b) Where there are valid existing rights.
Coordination Lands
Sec. 3120.30 What are coordination lands?
Coordination lands are those lands withdrawn or acquired by the
United States and made available to the States by--
(a) Cooperative agreements entered into between the Fish and
Wildlife Service and the game commissions of the various States, in
accordance with the Act of March 10, 1934 (48 Stat. 401), as amended by
the Act of August 14, 1946 (60 Stat. 1080); or
(b) Long-term leases or agreements between the Department of
Agriculture and the game commissions of the various States pursuant to
the Bankhead-Jones Farm Tenant Act (50 Stat. 525), as amended, where
such lands were subsequently transferred to the Department of the
Interior, with the Fish and Wildlife Service as the custodial agency of
the United States.
Sec. 3120.31 May BLM lease coordination lands?
BLM may lease coordination lands (not closed to oil and gas
leasing) only after it has--
(a) Consulted with the applicable State Game Commission and the
Fish and Wildlife Service; and
(b) Obtained any lease stipulations necessary to protect the lands
proposed for lease.
Sec. 3120.32 May BLM lease lands within a wildlife refuge in Alaska?
Lands within a wildlife refuge in Alaska, except the Arctic
National Wildlife Refuge, are open to oil and gas leasing after the
Fish and Wildlife Service has completed a favorable compatibility
determination.
Sec. 3120.33 May BLM lease lands within Recreation and Public Purposes
leases or patents?
Recreation and Public Purposes Act leases and patents authorized
under 43 U.S.C. 869 et seq. are subject to oil and gas leasing under
the regulations in this part, subject to any conditions or stipulations
that the Secretary considers appropriate.
Sec. 3120.34 May a lease contain both acquired and public domain
minerals?
A lease may not contain both public domain and acquired minerals.
Oil and Gas Lease Administration
Sec. 3120.40 For Federal lands, what types of leases does BLM issue or
administer?
BLM issues or administers the following types of leases--
(a) Competitive;
(b) Noncompetitive;
(c) Future Interest (Competitive/Noncompetitive);
(d) Right-of-Way;
(e) Renewal;
(f) Exchange;
(g) Combined Hydrocarbon; and
(h) Private.
Sec. 3120.41 For each type of lease, what is the primary lease term,
maximum lease size, administrative filing fee, and advance annual
rental rate?
The following chart describes the terms for each type of lease BLM
issues--
----------------------------------------------------------------------------------------------------------------
Rental rate per acre
Type of lease Primary lease Maximum lease size Administrative or fraction of an
term filing fee acre
----------------------------------------------------------------------------------------------------------------
(a) Competitive............... 10 years......... 2,560 acres for lower $75 $1.50 for the first
48 States and 5,760 five years; $2.00
acres in Alaska. the sixth and
succeeding years.
(b) Noncompetitive............ 10 years......... 2,560 acres for lower 75 See Competitive.
48 States and 5,760
acres in Alaska.
(c) Future Interest........... 10 years......... 2,560 acres for lower 75 See Competitive.
48 States and 5,760
acres in Alaska.
(d) Right-of-Way Leasing...... 20 years......... N/A................... 75 See Competitive.
(e) Renewal Leases............ 20 years......... N/A................... 75 $2.
(f) Exchange Leases........... 5 years.......... N/A................... 75 $2.
(g) Combined Hydrocarbon 10 years......... 5,120 acres........... 75 $2.
Leases.
(h) Private Leases............ Subject to N/A................... None Subject to private
private lease lease terms.
terms.
----------------------------------------------------------------------------------------------------------------
Subpart 3121--Competitive Leasing
Notice of Competitive Lease Sale
Sec. 3121.10 How does BLM provide notice of what lands are available
for competitive oil and gas leasing?
BLM will--
(a) Post a Notice of Competitive Lease Sale in the public room of
the BLM State Office with jurisdiction over the lands available for
lease for a minimum of 45 calendar days before the sale date; and
(b) Make the notice available for posting at the offices of all
appropriate surface management agencies with jurisdiction over any of
the parcels included in the sale notice for at least 45 calendar days
before the sale date.
[[Page 66900]]
Sec. 3121.11 What information will BLM include in the Notice of
Competitive Lease Sale?
In the Notice of Competitive Lease Sale, BLM will include--
(a) The time, date, and place of the sale;
(b) A description of the lands available for sale;
(c) Stipulations or lease conditions that apply to each sale
parcel; and
(d) Any special requirements that apply to a parcel such as
communitization or unit agreement joinder requirements, or any
plugging, bonding, or surface reclamation requirements for existing
wells.
Sec. 3121.12 How does BLM decide which lands to include in a Notice of
Competitive Lease Sale?
BLM includes lands in a Notice of Competitive Lease Sale as a
result of a--
(a) Letter of nomination from the public;
(b) BLM recommendation; or
(c) Request from a surface management agency.
Sec. 3121.13 What types of lands may I include in my letter of
nomination?
You may include the following types of lands in your letter of
nomination for competitive leasing--
(a) Lands available for leasing under Sec. 3120.10, including--
(1) Lands in oil and gas leases that have terminated, expired, been
canceled or relinquished;
(2) Interests forfeited to the United States;
(3) Lands that have never been leased;
(b) Lands which are otherwise unavailable for leasing but are
subject to drainage (protective leasing); and
(c) Lands in gas storage agreements that also meet the requirements
of paragraph (a) or (b) of this section.
Legal Descriptions
Sec. 3121.20 How should I describe the lands in my letter of
nomination?
------------------------------------------------------------------------
If-- Then you must describe the lands--
------------------------------------------------------------------------
(a) The public lands have By township, range, meridian, section and
been surveyed under the legal subdivision.
public land rectangular
survey system or the
acquired lands lie within
and conform to the
rectangular system of public
land surveys and constitute
either all or a portion of
the tract acquired by the
United States.
(b) The public lands have not By metes and bounds, giving courses and
been surveyed under the distances between the successive angle
public land rectangular points on the boundary of the tract, and
survey system or the connected by courses and distances
acquired lands do not connected to an official corner of the
conform to the rectangular public land surveys, or furnish a copy
system of public land of the deed or other conveyance document
surveys, but lie within an by which the United States acquired
area of the public land title to the lands.
surveys and constitute the
entire tract acquired by the
United States.
(c) The acquired lands do not By metes and bounds, giving courses and
conform to the rectangular distances between the successive angle
system of public land points with appropriate ties to the
surveys, but lie within an nearest official survey corner. If a
area of the public land portion of the boundary of the lands
surveys and constitute less requested coincides with the boundary in
than the entire tract the deed or other conveyance document,
acquired by the United you don't have to redescribe the
States. boundary if a copy of the deed or other
conveyance document is attached to your
nomination. Any portion of the lands
nominated that does not coincide with
the boundary in the deed or other
conveyance document must be tied by
courses and distances between successive
angle points into the description in the
deed or other conveyance document.
(d) The acquired lands lie Either as shown in the deed or other
outside an area of the conveyance document by which the United
public land surveys and States acquired title to the lands, or
constitute the entire tract attach a copy of the document to your
acquired by the United nomination.
States.
(e) The acquired lands lie By metes and bounds, giving courses and
outside an area of the distances between successive angle
public land surveys and points tying by courses and distances
constitute less than the into the description in the deed or
entire tract acquired by the other conveyance document. If a portion
United States. of the boundary of the lands requested
coincides with the boundary in the deed
or other conveyance document, you don't
have to redescribe the boundary if a
copy of the deed or other conveyance
document is attached to your nomination.
Any portion of the lands nominated that
does not coincide with the boundary in
the deed or other conveyance document
must be tied by courses and distances
between successive angle points into the
description in the deed or other
conveyance document.
(f) The acquired lands do not By filing three copies of a map upon
conform to the rectangular which the location of the lands are
survey system of public land clearly marked with respect to the
surveys. administrative unit or project of which
they are a part.
(g) The acquired lands have By the acquisition or tract number
been assigned an acquisition together with the identity of the State
or tract number by the and county where the lands are located.
acquiring agency.
(h) The public lands have a By legal subdivision, section, township,
protracted survey that has range and meridian. However, the
been approved and the smallest legal subdivision for which you
effective date published in may apply is a full section for the
the Federal Register. lower 48 states and four full contiguous
sections for Alaska.
(i) The lands are accreted... By metes and bounds giving courses and
distances between the successive angle
points on the boundary of the tract, and
connected by courses and distances to an
angle point on the perimeter of the
tract to which the accretions apply.