Interior Department, Minerals Management Service
The Minerals Management Service (MMS) is amending its regulations regarding valuation, for royalty purposes, of crude oil produced from Federal leases. MMS is changing the way that oil not sold under an arm's-length contract is valued; providing optional ways for lessees to value their crude oil production if they sell it at arm's length following one or more arm's-length exchanges or one or more transfers between affiliates; changing the way that actual transportation costs are calculated; changing the definition of "affiliate" because of a recent judicial decision; clarifying that it will issue binding value determinations; and adding specific regulatory language regarding the issue of "second-guessing" a sale under an arm's-length contract. These amendments are intended to assure that royalties on Federal oil production are based on a fair value and to otherwise simplify and improve the rule.
Document Headings Document headings vary by document type but may contain the following: the agency or agencies that issued and signed a document the number of the CFR title and the number of each part the document amends, proposes to amend, or is directly related to the agency docket number / agency internal file number the RIN which identifies each regulatory action listed in the Unified Agenda of Federal Regulatory and Deregulatory Actions See the Document Drafting Handbook for more details. Department of the Interior Minerals Management Service 30 CFR Part 206 RIN 1010-AC09 AGENCY: Minerals Management Service, Interior. ACTION: Final rule. SUMMARY: The Minerals Management Service (MMS) is amending its regulations regarding valuation, for royalty purposes, of crude oil produced from Federal leases. MMS is changing the way that oil not sold under an arm's-length contract is valued; providing optional ways for lessees to value their crude oil production if they sell it at arm's length following one or more arm's-length exchanges or one or more transfers between affiliates; changing the way that actual transportation costs are calculated; changing the definition of “affiliate” because of a recent judicial decision; clarifying that it will issue binding value determinations; and adding specific regulatory language regarding the issue of “second-guessing” a sale under an arm's-length contract. These amendments are intended to assure that royalties on Federal oil production are based on a fair value and to otherwise simplify and improve the rule. EFFECTIVE DATE: This rule is effective June 1, 2000. FOR FURTHER INFORMATION CONTACT: David S. Guzy, Chief, Rules and Publications Staff, Royalty Management Program, Minerals Management Service, phone (303) 231-3432, FAX (303) 231-3385, e-Mail david.guzy@mms.gov . SUPPLEMENTARY INFORMATION: The principal authors of this final rule are David A. Hubbard and Deborah Gibbs Tschudy of the Royalty Management …
Citation: 65 FR 14022
