FOR RELEASE:  August 25, 1995               CONTACT:  Tom DeRocco
                                                   (202) 208-3983


        MMS SEEKS COMMENTS ON PROPOSAL TO IMPROVE BIDDING SYSTEMS


     The Department of the Interior's Minerals Management Service
(MMS) is seeking comments on a proposed rule that would change
the bidding systems for newly issued federal offshore leases.  

     The MMS proposal would:

       - permit minimum royalty rates lower than the current
         12.5 percent;  

       - allow operating allowances (e.g., certain production
         costs) to be included in determining receipts subject
         to royalty;

       - suspend or defer royalty obligations for periods of
         time, or for volumes or values of production; and, 
 
       - allow product price to be included in formulas used in
         calculating royalty rates for certain periods of time.

  The proposed rule does not affect existing leases.  

  "Consistent with our approach to treating our constituents as
business partners in decisions that affect them, we presented the
proposal at two workshops held earlier this summer," said MMS
Director Cynthia Quarterman. "We believe the increased
flexibility this proposal offers will be mutually beneficial. 

  "This proposed rulemaking results from a review of alternative
leasing policies conducted by MMS as part of the Vice President's
Reinventing Government initiative.  It provides the Secretary of
the Interior the flexibility to improve the way MMS provides
service to its customers and its ability to manage federal
offshore oil and gas resources for the benefit of the public,"
said Quarterman.

  Comments on the proposed rule must be received or postmarked no
later than October 24, 1995, to be considered in this rulemaking. 

  Comments should be addressed to the Department of the Interior;
Minerals Management Service; 381 Elden Street; Mail Stop 4700;
Herndon, Virginia 22070-4817; Attention: Chief, Engineering and
Standards Branch.  For additional information, contact:  Marshall
Rose, Chief, Economic Evaluation Branch, (703) 787-1536.

  MMS is the federal agency that manages the nation's natural
gas, oil and other mineral resources on the Outer Continental
Shelf, and collects and disburses about $4 billion yearly in
revenues from offshore federal mineral leases and from onshore
mineral leases on federal and Indian lands.    

                                   -MMS-