The U.S. Minerals Management Service has proposed a rule to require companies to use electronic funds transfer (EFT) when they bid for Outer Continental Shelf federal leases.
MMS said the proposed rule would allow it to require EFT payments when appropriate, saving time and money for government and industry.
The agency's current rules do not require bidders to use EFT to submit their one-fifth bonus bid payments.
Since August 1997, MMS has allowed oil companies the option of using EFT to submit bonus bid payments, and in the last two Gulf of Mexico lease sales, at least 90% of high bonus bids were submitted electronically.
Since 1984, MMS has required all lessees to pay the remaining four-fifths of their bonus payment and their first year rental payments through EFT.
The agency is accepting comments on the proposed rule for 30 days.
Upcoming, future salesThe MMS has posted the proposed notice for an Aug. 25 Western Gulf of Mexico lease sale in New Orleans. It will be the fourth sale in the western gulf in which certain blocks being offered in 200 m or deeper of water are eligible for reduced royalties. For this sale, 2,120 of the blocks are in water depths of 200 m or more.
Sale 174 will offer 19.81 million acres on the Outer Continental Shelf off Texas and in deeper water off Louisiana.
The 3,642 blocks that are available are 9-200 miles offshore and are in 8-3,000 m of water.
The last western gulf sale attracted apparent high bids totaling $553 million for 402 tracts (OGJ, Aug. 31, 1998, p. 24). During the most recent central gulf sale, only 207 of the 3,806 blocks on offer received bids (OGJ, Mar. 22, 1999, p. 40).
Meanwhile, oil and gas industry groups have accepted an MMS proposal to hold an Eastern Gulf of Mexico lease sale in March 2002 on the same day as a Central Gulf of Mexico sale.
But American Petroleum Institute and six other industry groups said the sales should be conducted separately, and that the eastern gulf sale should offer all 1,033 blocks available, without withdrawals for Department of Defense training activities.
Copyright 1999 Oil & Gas Journal. All Rights Reserved.