Eastern Gulf of Mexico Planning Area Outer Continental Shelf Oil and Gas Lease Sale 226
Federal Register, Volume 81 Issue 33 (Friday, February 19, 2016)
Federal Register Volume 81, Number 33 (Friday, February 19, 2016)
From the Federal Register Online via the Government Publishing Office www.gpo.gov
FR Doc No: 2016-03279
DEPARTMENT OF THE INTERIOR
Bureau of Ocean Energy Management
Eastern Gulf of Mexico Planning Area Outer Continental Shelf Oil and Gas Lease Sale 226
AGENCY: Bureau of Ocean Energy Management (BOEM), Interior.
ACTION: Final notice of sale.
SUMMARY: On Wednesday, March 23, 2016, BOEM will open and publicly announce bids for blocks offered in Eastern Planning Area (EPA) Outer Continental Shelf (OCS) Oil and Gas Lease Sale 226 (EPA Sale 226), in accordance with the provisions of the OCS Lands Act (OCSLA, 43 U.S.C. 1331-1356, as amended) and the implementing regulations issued pursuant thereto (30 CFR parts 550 and 556).
DATES: Date And Time: Public bid reading for EPA Sale 226 will begin at 9:00 a.m. on Wednesday, March 23, 2016. All times referred to in this document are Central Time, unless otherwise specified.
The EPA Sale 226 Final Notice of Sale (NOS) Package (Final NOS Package) contains information essential to potential bidders. Bidders are charged with knowing the contents of the documents contained in the Final NOS Package.
Bid Submission Deadline: BOEM must receive all sealed bids between 8:00 a.m. and 4:00 p.m. on normal working days, or from 8:00 a.m. to the Bid Submission Deadline of 10:00 a.m. on Tuesday, March 22, 2016, the day before the lease sale. For more information on bid submission, see Section VII, ``Bidding Instructions,'' of this document.
ADDRESSES: The Mercedes-Benz Superdome, 1500 Sugarbowl Drive, New Orleans, Louisiana, 70112. The lease sale will be held in the St. Charles Club Room on the second floor (Loge Level). Entry to the Superdome will be on the Poydras Street side of the building through Gate A on the Ground Level; parking will be available at Garage 6.
Interested parties, upon request, may obtain a compact disc (CD-
ROM) containing the Final NOS Package by contacting the BOEM Gulf of Mexico (GOM) Region at: Gulf of Mexico Region Public Information Office, Bureau of Ocean Energy Management, 1201 Elmwood Park Boulevard, New Orleans, Louisiana 70123-2394, (504) 736-2519 or (800) 200-GULF or by visiting the BOEM Web site at http://www.boem.gov/Sale-226/.
Table of Contents
This Final NOS includes the following sections:
Lease Sale Area
Statutes and Regulations
Lease Terms and Financial Conditions
Information to Lessees
Bidding Rules and Restrictions
The Lease Sale
Delay of Sale
Lease Sale Area
Blocks Offered for Leasing: BOEM is offering for lease all blocks and partial blocks listed in the document ``List of Blocks Available for Leasing'' included in this Final NOS Package. All of these blocks are shown on the following leasing maps and Official Protraction Diagrams (OPDs):
Outer Continental Shelf Official Protraction Diagrams
NG16-02 Lloyd Ridge (revised February 28, 2007)
NH16-11 De Soto Canyon (revised February 28, 2007)
Blocks Not Offered for Leasing: All whole or partial blocks in the EPA deferred by the Gulf of Mexico Energy Security Act of 2006, Public Law 109-432.
Statutes and Regulations
Each lease is issued pursuant to OCSLA, and is subject to OCSLA, implementing regulations promulgated pursuant thereto, and other applicable statutes and regulations in existence upon the effective date of the lease, as well as those applicable statutes enacted and regulations promulgated thereafter, except to the extent that the after-enacted statutes and regulations explicitly conflict with an express provision of the lease. Each lease also is subject to amendments to statutes and regulations, including, but not limited to, OCSLA, that do not explicitly conflict with an express provision of the lease. The lessee expressly bears the risk that such new or amended statutes and regulations (i.e., those that do not explicitly conflict with an express provision of the lease) may increase or decrease the lessee's obligations under the lease.
Lease Terms and Financial Conditions
OCS Lease Form
BOEM will use Form BOEM-2005 (October 2011) to convey leases resulting from this sale. This lease form may be viewed on the BOEM Web site at http://www.boem.gov/About-BOEM/Procurement-Business-Opportunities/BOEM-OCS-Operation-Forms/BOEM-2005.aspx. The lease form will be amended to conform with the specific terms, conditions, and stipulations applicable to the individual lease. The terms, conditions, and stipulations applicable to this sale are set forth below.
Initial periods are summarized in the following table:
Water depth (meters) Initial period
800 to $100.00 per acre or fraction thereof for all blocks
BOEM will not accept a bonus bid unless it provides for a cash bonus in the amount equal to, or exceeding, the specified minimum bid of $100.00 per acre or fraction thereof.
Annual rental rates are summarized in the following table:
Rental Rates per Acre or Fraction Thereof
Water depth (meters) Years 1-5 Years 6+
800+........................................ $11.00 $16.00
Minimum Royalty Rate
$11.00 per acre or fraction thereof per year
One or more of the following stipulations may be applied to leases issued as a result of this sale. The detailed text of these stipulations is contained in the ``Lease Stipulations'' section of the Final NOS Package.
(1) Military Areas
(4) Protected Species
Information to Lessees
The Information to Lessees (ITL) clauses provide detailed information on certain issues pertaining to this oil and gas lease sale. The detailed text of these ITL clauses is contained in the ``Information to Lessees'' section of the Final NOS Package:
(1) Navigation Safety
(2) Ordnance Disposal Areas in the EPA
(3) Existing and Proposed Artificial Reefs/Rigs to Reefs
(4) Lightering Zones
(5) Military Areas in the EPA
(6) Bureau of Safety and Environmental Enforcement (BSEE) Inspection and Enforcement of Certain Coast Guard Regulations
(7) Air Quality Permits
(8) Notice of Arrival on the Outer Continental Shelf
(9) Bidder/Lessee Notice of Obligations Related to Criminal/Civil Charges and Offenses, Suspension, or Debarment; Disqualification Due to a Conviction under the Clean Air Act or the Clean Water Act
(10) Protected Species
The maps pertaining to this sale may be found on the BOEM Web site at http://www.boem.gov/Sale-226. The following map also is included in the Final NOS Package:
Lease Terms, Financial Conditions, and Stipulations Map
The lease terms, financial conditions, stipulations, and the blocks to which these terms and conditions apply are shown on the map ``Final, Eastern Planning Area, Lease Sale 226, March 23, 2016, Lease Terms, Financial Conditions, and Stipulations'' included in the Final NOS Package.
Instructions on how to submit a bid, secure payment of the advance bonus bid deposit (if applicable), and what information must be included with the bid are as follows:
For each block bid upon, a separate sealed bid must be submitted in a sealed envelope (as described below) and must include the following:
Total amount of the bid in whole dollars only;
each bidder's exact name;
each bidder's proportionate interest, stated as a percentage, using a maximum of five decimal places (e.g., 33.33333 percent);
typed name and title, and signature of each bidder's authorized officer;
each bidder's qualification number;
map name and number or Official Protraction Diagram (OPD) name and number;
block number; and
statement acknowledging that the bidder(s) understand that this bid legally binds the bidder(s) to comply with all applicable regulations, including payment of one-fifth of the bonus bid amount on all apparent high bids.
The information required on the bid(s) is specified in the document ``Bid Form'' in this Final NOS Package. A blank bid form will be provided therein for convenience and may be copied and completed with the necessary information described above.
Each bid must be submitted in a separate sealed envelope labeled as follows:
``Sealed Bid for Oil and Gas Lease Sale 226, not to be opened until 9:00 a.m. Wednesday, March 23, 2016;''
map name and number or OPD name and number;
block number for block bid upon; and
the exact name and qualification number of the submitting bidder only.
The Final NOS Package includes a sample bid envelope for reference.
If bids are mailed, please address the envelope containing the sealed bid envelope(s) as follows: Attention: Leasing and Financial Responsibility Section, BOEM Gulf of Mexico Region, 1201 Elmwood Park Boulevard, New Orleans, Louisiana 70123-2394.
Contains Sealed Bids for EPA Oil and Gas Lease Sale 226 Please Deliver to Ms. Cindy Thibodeaux or Mr. Carrol Williams, 2nd Floor, Immediately
Please Note: Bidders mailing bid(s) are advised to call Ms. Cindy Thibodeaux at (504) 736-2809, or Mr. Carrol Williams at (504) 736-2803, immediately after putting their bid(s) in the mail. If BOEM receives bids later than the Bid Submission Deadline, the BOEM Gulf of Mexico Regional Director (RD) will return those bids unopened to bidders. Please see ``Section XI. Delay of Sale'' regarding BOEM's discretion to extend the Bid Submission Deadline in the case of an unexpected event (e.g., flooding or travel restrictions) and how bidders can obtain more information on such extensions.
Advance Bonus Bid Deposit Guarantee
Bidders that are not currently an OCS oil and gas lease record title holder or designated operator, or those that ever have defaulted on a one-fifth bonus bid deposit, by Electronic Funds Transfer (EFT) or otherwise, must guarantee (secure) the payment of the one-fifth bonus bid deposit prior to bid submission using one of the following four methods:
Provide a third-party guarantee;
amend an areawide development bond via bond rider;
provide a letter of credit; or
provide a lump sum payment in advance via EFT.
For more information on EFT procedures, see Section X of this document entitled, ``The Lease Sale.''
Prior to bidding, each bidder should file Equal Opportunity Affirmative Action Representation Form BOEM-2032 (October 2011) and Equal Opportunity Compliance Report Certification Form BOEM-2033 (October 2011) with the BOEM Gulf of Mexico Region Adjudication Section. This certification is required by 41 CFR part 60 and Executive Order No. 11246, issued September 24, 1965, as amended by Executive Order No. 11375, issued October 13, 1967, and by Executive Order 13672, issued July 21, 2014. Both forms must be on file for the bidder(s) in the GOM Region Adjudication Section prior to the execution of any lease contract.
Geophysical Data and Information Statement (GDIS)
The GDIS is composed of three parts:
(1) The ``Statement'' page includes the company representatives' information and lists of blocks bid on that used proprietary data and those blocks bid on that did not use proprietary data;
(2) the ``Table'' listing the required data about each proprietary survey used (see below); and
(3) the ``Maps'' being the live trace maps for each survey that are identified in the GDIS statement and table.
Every bidder submitting a bid on a block in EPA Sale 226, or participating as a joint bidder in such a bid, must submit at the time of bid submission all three parts of the GDIS. A bidder must submit the GDIS even if a joint bidder or bidders on a specific block also have submitted a GDIS. Any speculative data that has been reprocessed externally or ``in-house'' is considered proprietary due to the proprietary processing and is no longer considered to be speculative.
The GDIS must be submitted in a separate and sealed envelope, and identify all proprietary data; reprocessed speculative data, and/or any Controlled Source Electromagnetic surveys, Amplitude Versus Offset (AVO), Gravity, or Magnetic data; or other information used as part of the decision to bid or participate in a bid on the block. The bidder and joint bidder must also include a live trace map (e.g., .pdf and ArcGIS shape file) for each proprietary survey that they identify in the GDIS illustrating the actual areal extent of the proprietary geophysical data in the survey (see the ``Example of Preferred Format'' in the Final NOS Package for additional information). The shape file must not include cultural information; only the live trace map of the survey itself.
The GDIS statement must include the name, phone number, and full address of a contact person and an alternate who are both knowledgeable about the information and data listed and who are available for 30 days after the sale date. The GDIS statement also must include entries for all blocks bid upon that did not use proprietary or reprocessed pre- or post-stack geophysical data and information as part of the decision to bid or to participate as a joint bidder in the bid. The GDIS statement must be submitted even if no proprietary geophysical data and information were used in bid preparation for the block.
The GDIS table should have columns that clearly state the sale number; the bidder company's name; the block area and block number bid on; the owner of the original data set (i.e., who initially
acquired the data); the industry's original name of the survey (e.g., E Octopus); the BOEM permit number for the survey; whether the data set is a fast track version; whether the data is speculative or proprietary; the data type (e.g., 2-D, 3-D, or 4-D; pre-stack or post-
stack; and time or depth); migration algorithm (e.g., Kirchhoff Migration, Wave Equation Migration, Reverse Migration, Reverse Time Migration) of the data and areal extent of bidder survey (i.e., number of line miles for 2-D or number of blocks for 3-D). Provide the computer storage size, to the nearest gigabyte, of each seismic data and velocity volume used to evaluate the lease block in question. This will be used in estimating the reproduction costs for each data set, if applicable. The availability of reimbursement of production costs will be determined consistent with 30 CFR 551.13. The next column should state who reprocessed the data (e.g., external company name or ``in-
house'') and when the date of final reprocessing was completed (month and year). If the data was sent to BOEM for bidding in a previous lease sale, list the date the data was processed (month and year) and indicate if AVO data was used in the evaluation. BOEM reserves the right to query about alternate data sets, to quality check, and to compare the listed and alternative data sets to determine which data set most closely meets the needs of the fair market value determination process. An example of the preferred format of the table may be found in the Final NOS Package, and a blank digital version of the preferred table may be accessed on the EPA Sale 226 sale Web page at http://www.boem.gov/Sale-226.
The GDIS maps are live trace maps (in .pdf and ArcGIS shape files) that should be submitted for each proprietary survey that is identified in the GDIS table. They should illustrate the actual areal extent of the proprietary geophysical data in the survey (see the ``Example of Preferred Format'' in the Final NOS Package for additional information). As previously stated, the shape file must not include cultural information; only the live trace map of the survey itself. Pursuant to 30 CFR 551.12 and 30 CFR 556.32, as a condition of the sale, the BOEM Gulf of Mexico RD requests that all bidders and joint bidders submit the proprietary data identified on their GDIS within 30 days after the lease sale (unless they are notified after the lease sale that BOEM has withdrawn the request). This request only pertains to proprietary data that is not commercially available. Commercially available data is not required to be submitted to BOEM, and reimbursement will not be provided if such data is submitted by a bidder. The BOEM Gulf of Mexico RD will notify bidders and joint bidders of any withdrawal of the request, for all or some of the proprietary data identified on the GDIS, within 15 days of the lease sale. Pursuant to 30 CFR part 551 and as a condition of this sale, all bidders required to submit data must ensure that the data is received by BOEM no later than the 30th day following the lease sale, or the next business day if the submission deadline falls on a weekend or Federal holiday. The data must be submitted to BOEM at the following address: Bureau of Ocean Energy Management, Resource Studies, GM 881A, 1201 Elmwood Park Blvd., New Orleans, LA 70123-2304.
BOEM recommends that bidders mark the submission's external envelope as ``Deliver Immediately to DASPU.'' BOEM also recommends that the data be submitted in an internal envelope, or otherwise marked, with the following designation: ``Proprietary Geophysical Data Submitted Pursuant to EPA 226 and used during evaluation of Block .''
In the event a person supplies any type of data to BOEM, that person must meet the following requirements to qualify for reimbursement:
(1) Persons must be registered with the System for Award Management (SAM), formerly known as the Central Contractor Registration (CCR). CCR usernames will not work in SAM. A new SAM User Account is needed to register or update an entity's records. The Web site for registering is https://www.sam.gov.
(2) Persons must be enrolled in the Department of Treasury's Internet Payment Platform (IPP) for electronic invoicing. The person must enroll in the IPP at https://www.ipp.gov/. Access then will be granted to use the IPP for submitting requests for payment. When a request for payment is submitted, it must include the assigned Purchase Order Number on the request.
(3) Persons must have a current On-line Representations and Certifications Application at https://www.sam.gov.
Please Note: The GDIS Information Table must be submitted digitally, preferably as an Excel spreadsheet, on a CD or DVD along with the seismic data map(s). If bidders have any questions, please contact Ms. Dee Smith at (504) 736-2706, or Mr. John Johnson at (504) 736-2455. Bidders should refer to Section X of this document, ``The Lease Sale: Acceptance, Rejection, or Return of Bids,'' regarding a bidder's failure to comply with the requirements of the Final NOS, including any failure to submit information as required in the Final NOS or Final NOS Package.
Telephone Numbers/Addresses of Bidders
BOEM requests that bidders provide this information in the suggested format prior to or at the time of bid submission. The suggested format is included in the Final NOS Package. The form must not be enclosed inside the sealed bid envelope.
BOEM may require bidders to submit other documents in accordance with 30 CFR 556.46.
Bidding Rules and Restrictions
Restricted Joint Bidders
On November 2, 2015, BOEM published the most recent List of Restricted Joint Bidders in the Federal Register at 80 FR 67416. Potential bidders are advised to refer to the Federal Register, prior to bidding, for the most current List of Restricted Joint Bidders in place at the time of the lease sale. Please refer to the joint bidding provisions at 30 CFR 556.41 for additional restrictions.
All signatories executing documents on behalf of bidder(s) must execute the same in conformance with the BOEM qualification records. Bidders are advised that BOEM considers the signed bid to be a legally binding obligation on the part of the bidder(s) to comply with all applicable regulations, including payment of one-fifth of the bonus bid on all high bids. A statement to this effect must be included on each bid form (see the document ``Bid Form'' to be contained in the Final NOS Package).
Unlawful Combination or Intimidation
BOEM warns bidders against violation of 18 U.S.C. 1860, prohibiting unlawful combination or intimidation of bidders.
Bids may be withdrawn only by written request delivered to BOEM prior to the Bid Submission Deadline. The withdrawal request must be on company letterhead and must contain the bidder's name, its BOEM qualification number, the map name/number, and the block number(s) of the bid(s) to be withdrawn. The withdrawal request must be executed in conformance with the BOEM qualification records. Signatories must be authorized to bind their respective legal business entities (e.g., a corporation, partnership, or LLC) and documentation must be on file with
BOEM setting forth this authority to act on the business entity's behalf for purposes of bidding and lease execution under OCSLA (e.g., business charter or articles, incumbency certificate, or power of attorney). The name and title of the authorized signatory must be typed under the signature block on the withdrawal request. The BOEM Gulf of Mexico RD, or the RD's designee, will indicate their approval by signing and dating the withdrawal request.
Minimum bonus bid calculations, including rounding, for all blocks will be shown in the document ``List of Blocks Available for Leasing,'' included in the Final NOS Package. The bonus bid amount must be stated in whole dollars. If the acreage of a block contains a decimal figure, then prior to calculating the minimum bonus bid, BOEM rounded up to the next whole acre. The appropriate minimum rate per acre was then be applied to the whole (rounded up) acreage. If this calculation resulted in a fractional dollar amount, the minimum bonus bid was rounded up to the next whole dollar amount. The bonus bid amount must be greater than or equal to the minimum bonus bid in whole dollars.
The Final NOS Package includes instructions, samples, and/or the preferred format for the following items. BOEM strongly encourages bidders to use these formats; should bidders use another format, they are responsible for including all the information specified for each item in the Final NOS Package.
(1) Bid Form
(2) Sample Completed Bid
(3) Sample Bid Envelope
(4) Sample Bid Mailing Envelope
(5) Telephone Numbers/Addresses of Bidders Form
(6) GDIS Form
(7) GDIS Envelope Form
The Lease Sale
Bid Opening and Reading
Sealed bids received in response to the Final NOS will be opened at the ``DATE AND TIME'' and ``LOCATION'' sections of this document. The opening of the bids is for the sole purpose of publicly announcing and recording the bids received; no bids will be accepted or rejected at that time.
Bonus Bid Deposit for Apparent High Bids
Each bidder submitting an apparent high bid must submit a bonus bid deposit to the Office of Natural Resources Revenue (ONRR) equal to one-
fifth of the bonus bid amount for each such bid. A copy of the notification of the high bidder's one-fifth bonus bid requirement deposit may be obtained at the EFT Area outside the Bid Reading Room on the day of the bid opening, or it may be obtained on the BOEM Web site at http://www.boem.gov/Sale-226/ under the heading ``Notification of EFT 1/5 Bonus Liability.'' All payments must be deposited electronically into an interest-bearing account in the U.S. Treasury by 11:00 a.m. Eastern Time the day following the bid reading (no exceptions). Account information is provided in the ``Instructions for Making Electronic Funds Transfer Bonus Payments'' found on the BOEM Web site identified above.
BOEM requires bidders to use EFT procedures for payment of one-
fifth bonus bid deposits for EPA Sale 226, following the detailed instructions contained on the ONRR Payment Information Web page at http://www.onrr.gov/FM/PayInfo.htm. Acceptance of a deposit does not constitute and will not be construed as acceptance of any bid on behalf of the United States.
Withdrawal of Blocks
The United States reserves the right to withdraw any block from this lease sale prior to issuance of a written acceptance of a bid for the block.
Acceptance, Rejection, or Return of Bids
The United States reserves the right to reject any and all bids. No bid will be accepted, and no lease for any block will be awarded to any bidder, unless:
(1) The bidder has complied with all requirements of the Final NOS, including those set forth in the documents contained in the Final NOS Package and applicable regulations;
(2) the bid is the highest valid bid; and
(3) the amount of the bid has been determined to be adequate by the authorized officer.
Any bid submitted that does not conform to the requirements of the Final NOS and Final NOS Package, OCSLA, or other applicable statute or regulation may be rejected and returned to the bidder. The U.S. Department of Justice and the Federal Trade Commission will review the results of the lease sale for antitrust issues prior to the acceptance of bids and issuance of leases.
Bid Adequacy Review Procedures for EPA Sale 226
To ensure that the U.S. Government receives a fair return for the conveyance of leases from this sale, high bids will be evaluated in accordance with BOEM's bid adequacy procedures. A copy of updated Bid Adequacy Procedures, can be obtained from the BOEM Gulf of Mexico Region Public Information Office, or via the BOEM Gulf of Mexico Region Web site at http://www.boem.gov/Oil-and-Gas-Energy-Program/Leasing/Regional-Leasing/Gulf-of-Mexico-Region/Bid-Adequacy-Procedures.aspx.
BOEM published a notification in the Federal Register, 79 FR 62461-
62463 (October 17, 2014), available at http://www.gpo.gov/fdsys/pkg/FR-2014-10-17/pdf/2014-24727.pdf, proposing the elimination of one of its procedural guidelines for bid acceptance, (referred to as the Number of Bids Rule), from its bid adequacy procedures. BOEM carefully considered the comments submitted in response to the notice and met with industry representatives. BOEM believes that none of the submitted comments offered a compelling reason to keep the Number of Bids Rule, suggested a preferable alternative which BOEM had not considered, or indicated that our analysis or rationale was deficient. Therefore, BOEM removed the Number of Bids Rule from its bid adequacy procedures. This bid adequacy change is in effect and will apply to any bids received for the EPA Sale 226.
BOEM requires each bidder awarded a lease to: (1) Execute all copies of the lease (Form BOEM-2005 (October 2011), as amended); (2) pay by EFT the balance of the bonus bid amount and the first year's rental for each lease issued in accordance with the requirements of 30 CFR 218.155 and 556.47(f); and (3) satisfy the bonding requirements of 30 CFR part 556, subpart I, as amended. ONRR requests that only one transaction be used for payment of the four-fifths bonus bid amount and the first year's rental.
Delay of Sale
The BOEM Gulf of Mexico RD has the discretion to change any date, time, and/or location specified in the Final NOS Package in case of an event that the BOEM Gulf of Mexico RD deems may interfere with the carrying out of a fair and orderly lease sale process. Such events could include, but are not limited to, natural disasters (e.g., earthquakes, hurricanes, and floods), wars, riots, acts of terrorism, fires, strikes, civil disorder, or other events of a similar nature. In case of such events, bidders should call (504) 736-0557, or access the BOEM Web site at http://www.boem.gov, for information
regarding any changes.
Dated: February 10, 2016.
Abigail Ross Hopper,
Director, Bureau of Ocean Energy Management.
FR Doc. 2016-03279 Filed 2-18-16; 8:45 am
BILLING CODE 4310-MR-P