[Federal Register Volume 65, Number 114 (Tuesday, June 13, 2000)]
[Rules and Regulations]
[Pages 37043-37044]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-14778]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service

30 CFR Part 206

RIN 1010-AC09


Approved Publications and Tables for Use in Applying Revised 
Royalty Valuation Regulations for Federal Oil

AGENCY: Minerals Management Service, Interior.

ACTION: Notice of approved publications.

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SUMMARY: As required by revised Federal oil valuation regulations, the 
Minerals Management Service (MMS) has approved three spot price 
publications that royalty payors should use to value oil produced from 
Federal leases not sold at arm's length.

EFFECTIVE DATE: June 1, 2000.

ADDRESSES: See FOR FURTHER INFORMATION CONTACT section below.

FOR FURTHER INFORMATION CONTACT: David Domagala, Royalty Valuation 
Division, Royalty Management Program, Minerals Management Service, P.O. 
Box 25165, Mail Stop 3151, Denver, Colorado 80225, telephone number 
(303) 275-7255 or fax number (303) 275-7227.

SUPPLEMENTARY INFORMATION: MMS published its revised regulations 
establishing oil value for royalty due on Federal leases in the Federal 
Register on March 15, 2000 (65 FR 14022), effective June 1, 2000. The 
primary changes in the revised regulations affect Federal lessees who 
value oil not sold at arm's length. The rule provides that the primary 
means of valuing crude oil not sold at arm's length is an adjusted spot 
price, except in the Rocky Mountain Region, where use of an adjusted 
spot price for valuation purposes is the third valuation benchmark (30 
CFR 206.103(b)(4))(65 FR 14091). The applicable spot price is the one 
for the oil most closely representing the lease production in terms of 
physical proximity and quality parameters. The lessee may select the 
spot price from any MMS-approved publication; however, once the lessee 
selects a publication for a geographical area (California/Alaska, the 
Rocky Mountain Region, or the rest of the country), it must continue to 
use that same publication for 2 years in that area.
    In Sec. 206.104 of the final rule (65 FR 14092) for establishing 
oil value for royalty due on Federal leases, MMS explained that 
``approved publications'' must be:
    (1) Publications buyers and sellers frequently use;
    (2) Publications frequently mentioned in purchase or sales 
contracts;
    (3) Publications that use adequate survey techniques, including 
development of spot price estimates based on daily surveys of buyers 
and sellers of Alaska North Slope (ANS) and other crude oil; and
    (4) Publications independent from MMS, other lessors, and lessees.
    Additionally, MMS established that:
    (1) Any publication may petition MMS to be added to the published 
list of acceptable publications.
    (2) MMS will reference the tables a lessee must use in the approved 
publications to determine the associated index prices.
    (3) MMS may revoke its approval of a particular publication if it 
determines that the prices published in the publication do not 
accurately represent spot market values.
    MMS has verified that the publications listed below meet approval 
criteria based on input from staff of the publication itself, as well 
as information from marketers, auditors and industry consultants. MMS 
also examined and compared historical published spot prices from all 
three of the approved publications to ensure comparability and 
consistency. The approved publications and applicable tables are as 
follows:
    <bullet> Platt's Oilgram Price Report (The same spot prices appear 
in Platt's Global Alert, Platt's Crude Oil Marketwire, and the soon-to-
be-published Platt's U.S. Crudewire.) Use the spot prices found in the 
``Crude Price Assessments'' section.
    <bullet> Petroleum Argus Americas Crude (The same spot prices 
appear in Argus Crude, Argus Americas Crude Datafile, Argus Crude 
Datafile.) Use the spot prices found in the ``WTI Cushing,'' ``US Gulf 
Coast,'' ``US Midcontinent,'' and ``US West Coast'' sections.
    <bullet> Bloomberg Oil Buyers Guide Petroleum Price Supplement (The 
same spot prices appear on the Bloomberg Energy Web Site, and in 
Bloomberg Professional.) Use the spot prices found in the ``Worldwide 
Crude Price Snapshot'' section.
    If any of these entities use identical spot price quotes in other 
of their publications or distributions (such as electronic bulletin 
boards, newsletters, etc.), they are also approved. MMS will

[[Page 37044]]

monitor these three publications to ensure that they continue to meet 
the approval criteria.
    Representatives of any other publication who wish to obtain MMS 
approval of their publication may contact MMS at the address shown 
above in the FOR FURTHER INFORMATION CONTACT section.

    Dated: June 6, 2000.
Lucy Querques Denett,
Associate Director for Royalty Management.
[FR Doc. 00-14778 Filed 6-12-00; 8:45 am]
BILLING CODE 4310-MR-P