New MMS committee to revise Indian oil valuation

Nick Snow
Washington Editor

WASHINGTON, DC, Apr. 29 -- The US Minerals Management Service published a notice on Apr. 28 that it is forming a committee to consider recommendations for revising the rule governing valuation of oil produced from American Indian leases.

The negotiated rulemaking committee will include representatives from the federal government, Indian tribes, individual Indian owners, and the oil and gas industry, the US Department of Interior agency said.

It particularly will make recommendations regarding the oil major portion provision contained in most tribal and allotted leases. Those leases define major portion as the highest price paid or offered at the time of production for the major portion of oil produced from the same field, MMS said. It has begun to take nominations for members.

The agency originally announced its intention to establish a negotiated rulemaking committee in December 2007 when it published technical corrections to the March 1988 oil valuation rule, according to MMS Director Randall B. Luthi.

"Those technical corrections and the pending recommendations of the negotiated rulemaking committee will bring added certainty to the valuation of oil produced from American Indian lands and help ensure that American Indians receive the proper royalties," he said.

MMS published a proposed rule for public comment in February 2006 after a series of public meetings with tribes and individual Indian mineral holders, the agency said. It decided to make technical corrections to the current rule and convene the negotiated rulemaking committee after receiving diverse comments from tribes and the oil and gas industry.

Once the committee reaches consensus on the rule's major portion provision as well as other provisions the committee might want to address, MMS said it will use that recommendation as the basis for an amendment to the rule, which it also will publish in the Federal Register.

Contact Nick Snow at [email protected].