Agency Information Collection Activities: Submitted for Office of Management and Budget Review; Comment Request

Title: Net Profit Share Leases. OMB Control Number: 1010-0073. Abstract: The Department of the Interior is responsible for matters relevant to mineral resource development in the OCS. The Secretary of the Interior (Secretary) is responsible for managing the production of minerals from Federal and Indian lands and the OCS; for collecting royalties from lessees who produce minerals; and for distributing the funds collected in accordance with applicable laws. The Minerals Management Service (MMS) performs the royalty management functions for the Secretary. To encourage exploration and development of oil and gas leases on submerged lands of the Outer Continental Shelf (OCS), regulations were promulgated at 30 CFR 260.110(4) implementing a net profit share bidding system. The Net Profit Share Lease (NPSL) bidding system was established to properly balance a fair market return to the Federal Government for the lease of its lands, with a fair profit to companies risking their investment capital. The system provides an incentive for early and expeditious exploration and development, and provides for a sharing of the risks by the lessee and the Government. The bidding system incorporates a fixed capital recovery system as the means through which the lessee recovers costs of exploration and development from production revenues, along with a reasonable return on investment. This collection of information is necessary in order to determine when royalty payments are due, and to determine the proper amount of payment. Under the NPSL bidding system, a notice of OCS lease sale is published in the Federal Register with a net profit share rate and a capital recovery factor (CRF) established for each tract within the sale. The CRF allows the lessee to inflate certain allowable costs by multiplying costs by the CRF. This additional allowance results in a type of risk-sharing arrangement with the Government. Tracts within the same sale may have different profit share rates and different CRF's. The last OCS lease sale involving NPSL's was in August 1983. When companies enter into NPSL agreements, they agree to submit the reports required by 30 CFR 220.031. There are no reporting forms required, but the lessees must submit updates containing specific information. Before production begins, reports are required on an annual basis. These reports must document costs incurred, credits received, and the balance in the NPSL capital account. Once production begins, monthly reports are required that include the amount and disposition of oil and gas saved, removed, or sold; the amount of production revenue; the amount and description of costs and credits to the NPSL capital account; the balance in the capital account; the net profit share base and net profit share payment due the Government; and the lessee's monthly profit share. All information submitted is taken directly from the lessee's own records. No unique information is required by MMS. Royalty payments are made based on the individual lease's net profit share rate, multiplied by the quantity (revenues and other credits, less costs). MMS uses the data submitted in the annual and monthly reports to verify costs claimed, revenues earned, and royalty payments due. No royalties are paid until the lessee recovers exploration and development expenses. Information provided in the reports is used by MMS auditors. Failure of the respondent to submit the information results in noncompliance with the requirements of 30 CFR Part 220 and could result in loss of royalty payments to the Government. 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. The Federal Register Notice with a 60-day comment period soliciting comments on this collection

of information was published on December 11, 1998 (63 FR 68472). Estimated Number and Type of Respondents/Affected Entities: Approximately 11 Federal and Indian lessees and payors. Frequency of Response: Monthly responses are required for 15 leases, and annual responses are required for 3 leases. Burden Statement and Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: We estimate the respondent burden to average 16 hours per response for a total of 2,928 hours. We estimate 1 hour of recordkeeping for each of the 18 OCS leases with NPSL agreements for a total of 18 hours. Therefore, the total annual burden hour estimate for this collection is 2,946 hours. Estimated Annual Reporting and Recordkeeping ``Cost'' Burden: We have identified no paperwork cost burdens for this collection. Comments: Section 3506(c)(2)(A) of the Paperwork Reduction Act 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. Send your comments directly to the offices listed under the ADDRESSES section of this notice. OMB has up to 60 days to approve or disapprove the information collection but may respond after 30 days. Therefore, to ensure maximum consideration, OMB should receive public comments by June 21, 1999. MMS Information Collection Clearance Officer: Jo Ann Lauterbach (202) 208-7744.

Dated: April 22, 1999. Lucy Querques Denett, Associate Director for Royalty Management. [FR Doc. 99-12832 Filed 5-20-99; 8:45 am] BILLING CODE 4310-MR-P