UNITED STATES DEPARTMENT OF THE INTERIOR
MINERALS MANAGEMENT SERVICE
GULF OF MEXICO OCS REGION
| NTL No. 2000-G16 | Effective Date: September 7, 2000 |
NOTICE TO LESSEES AND OPERATORS OF FEDERAL OIL, GAS, AND SULPHUR
LEASES IN THE OUTER CONTINENTAL SHELF, GULF OF MEXICO OCS REGION
Guidelines for General Lease Surety Bonds
This Notice to Lessees and Operators (NTL) supersedes NTL No. 99-G04, dated March 12, 1999, and makes minor technical amendments.
What is the purpose of this NTL?
This NTL clarifies how the Gulf of Mexico OCS Region (GOMR) will implement the requirements for general lease surety bonds contained in 30 CFR 256, Subpart I. These securities are necessary to ensure that you fully comply with regulatory and lease requirements to include rents, royalties, environmental damage and clean-up activities not related to oil spills, abandonment and site-clearance, and other lease obligations.
When am I required to provide a general lease surety bond?
You are required to provide a general lease surety bond before the Minerals Management Service (MMS) will issue you a new lease or approve a lease assignment or an operational activity plan. Specifically, the GOMR will begin a review of your bonding coverages when you submit a request for a change of designated operator of a lease; an initial Exploration Plan (EP), an initial Development and Production Plan (DPP), an initial Development Operations Coordination Document (DOCD), or a significant revision (i.e., a supplemental plan) to an approved EP, DPP, or DOCD; or a request for assignment of a lease with an approved EP, DPP, or DOCD.
The authorized MMS officer, for good cause, may permit you to provide the required general lease surety bond after we approve an assignment or operational activity plan but before you begin an operational activity under the relevant plan.
The submittal of a general lease surety bond by the designated operator, 30 CFR 256.52(c), does not relieve any of the lessees of their obligations to comply with the terms and conditions of the lease.
How much general lease surety bond coverage do I need to provide?
The level of activity on your lease determines the amount of general lease surety bond coverage.
The GOMR will designate each lease as No Operations, Exploration, or Development as follows:
What type of general lease surety bond do I need to provide?
To satisfy the requirement to provide general lease surety bonds, you may provide bonds issued by a surety certified by the U.S. Department of the Treasury (see Treasury Circular No. 570) or U.S. Treasury securities that are negotiable at the time of submission for an amount of cash equal to the value of the required bond. The authorized MMS officer may approve alternatives to U.S. Treasury-certified bonds and U.S. Treasury securities if the interests of the U.S. Government are protected to the same extent as such historically accepted financial instruments.
The GOMR at present accepts a bond from U.S. Treasury-certified sureties and U.S. Treasury securities that have a cash value at the time of purchase equal to the required amount. On a case-by-case basis, the GOMR will consider alternative instruments that provide the same degree of security as these currently accepted. However, for informational perspective, the GOMR has historically considered unacceptable such alternatives as letters of credit or production escrow accounts.
Is any additional bonding coverage required?
Under 30 CFR 256.53(d) and (e), the GOMR Regional Director (RD) may require additional security(s) in the form of a supplemental bond(s) or an increase in the amount of coverage of an existing general lease surety bond, if the RD determines that additional security is necessary to cover royalty due the U.S. Government or other applicable costs and liabilities.
The MMS will not require a supplemental bond on a lease when a lessee or its guarantor can demonstrate the financial capability to meet these obligations (see 30 CFR 256.53(d) and (e) and NTL No. 98-18N, Supplemental Bond Procedures, effective December 28, 1998.
Where do I submit a general lease surety bond?
Submit general lease surety bonds to:
Adjudication Unit
Gulf of Mexico OCS Region
Minerals Management Service
1201 Elmwood Park Boulevard
Mail Stop 5421
New Orleans, Louisiana 70123-5144
The date the GOMR Adjudication Unit receives a general lease surety bond is the effective date of the bond.
How can I obtain additional general lease surety bond information and bonding forms?
For assistance regarding general lease surety bonds and the appropriate bond forms to be used, contact the GOMR Adjudication Unit at (504) 736-2436 or use our Internet web site located at www.gomr.mms.gov/homepg/lsesale/surety.html. You can print all bonding application forms through a PDF. format at this Internet web site. You may contact the Surety Bonding Program Staff, Gulf of Mexico OCS Region, Minerals Management Service, 1201 Elmwood Park Boulevard, Mail Stop 5421, New Orleans, Louisiana 70123-5144.
Paperwork Reduction Act of 1995 Statement
This NTL refers to various information collection provisions in our regulations and forms for which the Office of Management and Budget (OMB) has approved and assigned OMB control numbers. The primary collection of information referred to is required by 30 CFR 256 (OMB control number 1010-0006). This NTL also refers to approved information collection requirements in 30 CFR 250, Subparts A and B (OMB Control numbers 1010-0114 and 1010-0049, respectively). This NTL provides clarification, description, or interpretation of requirements and does not impose additional information collection requirements subject to the Paperwork Reduction Act of 1995.
Contact
Contact Mr. Carrol S. Williams of this office at (504) 736-2803 if you have any questions concerning this NTL.
Chris C. Oynes
Regional Director