MMS to revise Indian oil valuation rule
The US Minerals Management Service published in the Dec. 17 Federal Register a revised US Indian oil-valuation rule, which the Department of the Interior said is designed to bring more certainty to the valuation process.
WASHINGTON, DC, Nov. 19 -- The US Minerals Management Service published in the Dec. 17 Federal Register a revised US Indian oil-valuation rule, which the Department of the Interior said is designed to bring more certainty to the valuation process.
MMS said it also will convene a negotiated rulemaking committee to make recommendations regarding the "major portion" provision contained in most Indian tribal and allotted leases. The committee will include representatives from the federal government, Indian tribes, individual Indian mineral owners, and the oil and gas industry, it said.
The agency explained that the 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. The rulemaking is intended to improve the Indian oil valuation process by eliminating reliance on posted prices and addressing the unique terms of tribal and allotted leases, MMS said.
The latest rule includes revisions to the March 1988 oil valuation rule. Many changes have occurred in the oil market since that rule was codified, and MMS said it published a proposed rule for public comment in February 2006 after meeting with tribes and individual Indian owners. The agency decided to make technical corrections to the 1988 rule and convene the negotiated rulemaking committee after receiving diverse comments from tribes, individual owners, and oil and gas producers.
MMS said it also is seeking nominations of individuals to the committee. Once the group reaches a consensus on the rule's major portion provision and other provisions it may address, MMS will use that recommendation as a basis for an amendment to the Indian oil valuation rule, which it will publish in the Federal Register.
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