Agency Information Collection Activities: Submitted for Office of Management and Budget Review; Comment Request

DEPARTMENT OF THE INTERIOR

Minerals Management Service

Agency Information Collection Activities: Submitted for Office of

Management and Budget Review; Comment Request

AGENCY: Minerals Management Service, DOI.

ACTION: Notice of information collection solicitation and public

meetings.

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SUMMARY: Under the Paperwork Reduction Act (PRA) of 1995, the Minerals

Management Service (MMS) is soliciting comments on revising an existing

information collection, Production Accounting and Auditing Reports, the

Office of Management and Budget (OMB) Control Number 1010-0040, which

expires on July 31, 2001. MMS is also giving notice of two public

meetings concerning oil and gas production reporting changes.

FORMS: MMS-3160, MMS-4054, MMS-4055, MMS-4056, MMS-4058.

DATES: Written comments should be received on or before April 26, 1999.

MMS will hold two public meetings about the proposed production

reporting changes on March 11, 1999, in Houston, Texas, and on March

17, 1999, in Lakewood, Colorado.

ADDRESSES: Comments sent via the U.S. Postal Service should be sent to

Minerals Management Service, Royalty Management Program, Rules and

Publications Staff, P.O. Box 25165, MS 3021, Denver, Colorado 80225-

0165; courier address is Building 85, Room A613, Denver Federal Center,

Denver, Colorado 80225; E-mail address is RMP.[email protected]. The

time and location for each public meeting is:

Houston--March 11, 1999, 1-5 p.m. Central Standard Time, Houston

Compliance Division Office, 4141 North Sam Houston Parkway East,

Houston, Texas 77032, Telephone Number (281) 987-6802

Denver March 17, 1999, 1-5 p.m. Mountain Standard Time, Minerals

Management Service, Denver Federal Center, Building 85, West 6th Avenue

and Kipling Street, Lakewood, Colorado 80215, Telephone Number (303)

231-3585

(Access to the Denver Federal Center will require the presentation of a

picture identification.)

FOR FURTHER INFORMATION CONTACT: Beth Ann Danford, Production

Accounting Branch, Royalty Management Program (RMP), phone (303) 231-

3522, FAX (303) 231-3700, e-mail Beth.D[email protected].

SUPPLEMENTARY INFORMATION: We are seeking your comments, both positive

and negative, on our proposed changes for each oil and gas production

form. Do you have objections to any of our proposed changes? What, if

any, problems will the elimination of the Monthly Report of Operations,

Form MMS-3160, for Onshore Federal and Indian oil and gas properties

cause industry? Is this the best option for MMS to collect accurate and

timely data for gallons per thousand cubic feet of gas (GPM) and

Methane Mol percentage? Is it beneficial to industry to combine the Oil

and Gas Operations Report (OGOR), Parts B and C? If you do have

objections, what alternative(s) would you suggest? Can we enhance the

quality, utility, and clarity of the information we collect? Can we

lessen the information collection burden on the respondents by using

automated collection techniques or other forms of information

technology?

The public meetings will be open to the public to discuss the

proposed reporting changes. We encourage members of the public to

attend these meetings. Those wishing to make formal presentations

should sign up upon arrival. The sign-up sheet will determine the order

of speakers. For building security measures, each person will be

required to sign in and may be required to present a picture

identification.

Comments, including names and home addresses of respondents, are

available for public review during regular business hours and placed on

our web site at http://www.rmp.mms.gov/library/readroom/readrm.htm.

Individual respondents may request that we withhold their home address

from the rulemaking record, which we will honor to the extent allowable

by law. There may be circumstances in which we would withhold from the

rulemaking record a respondent's identity, as allowable by the law. If

you wish us to withhold your name and/or address, you must state this

prominently at the beginning of your comment. However, we will not

consider anonymous comments. We will make all submissions from

organizations or businesses, and from individuals identifying

themselves as representatives or officials of organizations or

businesses, available for public inspection in their entirety.

MMS is responsible for ensuring that all revenues from Federal and

Indian mineral properties are efficiently, effectively, and accurately

collected, accounted for, verified, and disbursed to appropriate

recipients in a timely manner. These revenues amount to more than $4.5

billion annually. In addition to a broad range of financial services,

we also operate a comprehensive compliance strategy that includes an

automated compliance verification program to validate the accuracy and

timeliness of revenues paid and an audit program staffed by MMS, State,

and Tribal auditors.

In April 1996, we undertook a compliance reengineering initiative

to examine the current compliance strategy and determine the best

approach for accomplishing future goals and objectives. The principal

reengineering objective was to define and implement a new compliance

strategy that satisfied, in the most cost-effective manner possible,

the compliance program's primary purpose of ensuring that Federal and

Indian mineral property revenues were accurately and timely paid.

In August 1996, the Federal Oil and Gas Royalty Simplification and

Fairness Act of 1996 (RSFA) was enacted into law. This law amended the

Federal Oil and Gas Royalty Management Act of 1982, the Outer

Continental Shelf Lands Act, and the Mineral Leasing Act. RSFA

significantly changed many of our historical operating assumptions as

well as some fundamental Federal oil and gas mineral revenue financial

activities. We needed to immediately change some of our procedures and

processes to implement RSFA, but we also needed to reassess our long-

term strategies, our business processes, and improve and modernize our

ADP systems to become more cost-effective and responsive to our

customers. Therefore, we decided to conduct an in-depth reengineering

of all of our core business processes.

A reengineering design team analyzed current information reporting

requirements to confirm the presence of data needed to support future

RMP processes. Building upon a royalty and production reporting study

completed in May 1996, by the Royalty Policy Committee (RPC), the

design team identified opportunities for decreasing reporting burden,

avoiding data duplication, decreasing error rates, and increasing

processing efficiency. They critically analyzed the information

collected by each royalty and production report to determine: Is it

necessary to collect this information, and how will it be used? Will

this information support reengineered business processes? Can this

information be obtained or utilized more efficiently?

The design team recommended incorporating the RPC recommendations

including eliminating some reports, streamlining the required data

elements

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on other reports, and modifying some reports. The RPC estimated savings

for the RMP to be in the range of 1 to 1.5 million dollars per year. If

these proposals are adopted, they will significantly reduce the volume

of lines reported and processed, minimize errors and related error

correction workload, simplify reporting, and lower costs for both oil

and gas reporters and RMP. These reporting changes (for both royalty

and production) are essential to achieving an end-to-end compliance and

asset management core business process. We are seeking your comments on

the proposed changes presented and described below related to

production reporting for Federal and Indian oil and gas properties. We

consistently made these changes on the proposed reporting forms which

are included at the end of this notice. In the report identification

area, we renamed ``Report Period'' to ``Production Month'' and

eliminated ``Authorizing Name'' and ``Title'' from the report

authorization area. Implementation of all proposed reporting changes is

projected for September 2001.

We envision that operators will have the option, for all production

reporting forms, to report via user-friendly templates or Internet

interfaces with pull down menus. This should be especially beneficial

to the smaller operators by eliminating reporting complexity and

reducing reporting time burden or the need to learn codes.

Monthly Report of Operations, Form MMS-3160

Currently, most operators of onshore properties report their

production on Form MMS-3160. Some onshore operators and all offshore

operators report their production on OGOR, Form MMS-4054-A, B and C.

MMS and those reporters that have production, both offshore and

onshore, must currently maintain and support two separate production

reporting systems. We believe it is more efficient for all parties to

have one system for production reporting. Therefore, we propose that

the Form MMS-3160 be eliminated and that reporters, whether their

production is onshore or offshore, use the revised draft OGOR, Form

MMS-4054 A & B, as further discussed below. We included a revised draft

of this form at the end of this notice.

Oil and Gas Operations Report (OGOR), Form MMS-4054

The OGOR may appear to be more complex than the Form MMS-3160;

however, they are quite similar. Essentially the same data elements are

being collected on both forms. The proposed OGOR eliminates several

data fields currently required on the Form MMS-3160. However, under the

PRA, the following elements are not on the proposed OGOR, since this

information is obtained through other sources:

--Field Name;

--Unit Name;

--Participating Area;

--County Name;

--State Code;

--Well Location Section Qtr Qtr;

--Well Location Township;

--Well Location Range; and

--Address.

Because the proposed OGOR was designed to accommodate both onshore

and offshore reporting, it contains more data fields than the Form MMS-

3160. However, many of these fields will either be system calculated

(column totals) or will not be required for onshore reporters (metering

points and facility numbers).

The current Form MMS-3160 identifies production disposition for

only the seven most common situations preprinted on the form. All other

dispositions are reported in the ``Other'' field, with explanations in

the ``Comments'' field. This weakness in the form design creates a

burden on industry to provide supplemental information in response to

MMS system exception reports.

We propose to provide onshore reporters with the ability to select

more disposition codes than currently provided on the Form MMS-3160. To

keep the reporting simple, we will provide templates or Internet

interfaces with pull-down menus to allow the small reporters to select

the narrative response they are accustomed to reporting on the Form

MMS-3160. RMP's system/software will automatically populate the

appropriate two-digit disposition code.

The reporting impact will be almost transparent to the onshore

reporter, and this change will allow our system to automatically

resolve exceptions.

Adjustments to oil reported in inventory are also currently

reported in the ``Other'' field on the Form MMS-3160. These adjustments

will also be identified by pull-down menus for simplified reporting on

the proposed OGOR. More accurate disposition data should also assist

Bureau of Land and Management, Bureau of Indian Affairs, and the States

in their production verification efforts.

One additional element ``Product Code'' will be required on the

proposed OGOR-B. Due to the space limitations, the separate product

volume fields that currently exist, had to be reduced to one field. A

two digit ``Product Code'' was added to identify the product. Values

will be limited to three options, 01 (Oil/Condensate), 04 (Gas), and 30

(Water), and will be accessible by a pull-down menu.

The impact to operators using this revised format to submit

information will be minimal. MMS will provide operators with a user-

friendly template/Internet interface that will guide them through

completing all required data elements. Also, the few large operators

that are not currently reporting on the OGOR will have the option of

using the RMP template or redesigning their own system.

The OGOR is currently a three part form (OGOR-A, Well Production;

OGOR-B, Production Disposition; and OGOR-C, Product Sales from

Facility). We propose to adopt the RPC recommendation to reduce the

well status code reported on the OGOR-A from up to 13 digits, down to 4

digits. We also propose that the data elements captured on the OGOR-C

be combined with those on the proposed OGOR-B. Common elements on both

will be eliminated. The resultant proposed OGOR-B will report both

disposition and inventory data for a property. To make room on the

proposed OGOR-B, three disposition volume columns (Oil, Gas, and Water)

are consolidated into one disposition volume column. We added a two-

digit Product Code column to enable RMP to continue to account for

disposition volumes by product.

A main premise of the reengineering effort is to analyze all

reported elements at one time, and thereby reduce the number of

contacts with industry for exception resolution. To accomplish this

goal, we must be able to accurately allocate volumes of processed gas

and related natural gas liquids (NGLs) to the property level. The

minimum data elements necessary to make these allocation calculations

are GPM and Methane Mol percentage at the property level. In lieu of

requesting these data elements on a separate Gas Analysis Report (GAR),

we feel it is less burdensome to add these two fields to the proposed

OGOR-B and instruct operators to populate these fields when the data

last reported has changed. Accurate and timely reporting of these

fields should eliminate the need for property operators to file a

modified/amended OGOR-B and/or a GAR, except for specific exception

resolution situations.

Currently, modifications to OGOR reports are made by deleting the

original reported line and adding the new line (Delete/Add Method).

Some companies expressed concern that their systems are

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not compatible with this process and to file a total replacement report

which will overlay the original report. We propose that our

reengineered system be flexible enough to allow a company to choose the

modification method that best meets each company's system capabilities.

Gas Analysis Report (GAR), Form MMS-4055

The GAR is currently used to report gas analysis data regarding the

composition of OCS Federal lease gas production at the facility

measurement point (FMP). It is used by lessees and gas plant operators

to allocate residue gas and gas plant products to contributing

properties. We propose that GPM and Methane Mol percentage be reported

on the proposed OGOR-B at the property/FMP level when new samples are

taken and/or the data last reported has changed. This eliminates

collecting monthly GARs from the OCS property operators and removes the

burden of reporting some 30-plus data elements. The GAR, in its current

approved format, will only be requested on an as-needed basis when the

reasonableness of residue gas and NGL allocations is in question.

Gas Plant Operations Report (GPOR), Form MMS-4056

The GPOR is currently required from a few onshore gas plants

operators and from operators that process natural gas produced from OCS

Federal oil and gas properties. It is used to verify that property

level volume allocations are reasonable. We propose to simplify the

form in several aspects. A draft revised Form MMS-4056 is included at

the end of this notice. We have eliminated the analysis section of the

current report (30-plus data elements). In lieu of the analysis data,

we will require two additional data elements relative to field volumes.

We added an element called ``Field Btu'' and will clarify that the

existing Btu field is for residue gas. We also added an element called

``Field Methane Mol %.'' Component product volumes will still be

required but only for the most common components as identified on the

form. That is, scrubber condensate (reported in gallons instead of

barrels), natural gas liquids (Gallons), carbon dioxide (MCF), nitrogen

(MCF), helium (MCF), and sulfur (Long Tons). The pressure base for all

elements reported on the GPOR will be defined as 14.73 psia. We propose

that the simplified GPOR be required monthly from each operator of a

gas plant that processes gas produced on OCS properties. In specific

instances, the GPOR may be required from onshore gas plants.

Production Allocation Schedule Report (PASR), Form MMS-4058

The PASR is currently required only for OCS Federal properties. We

propose to simplify it by removing the ``Product Code'' field from the

Report Identification Area, by removing the ``Delivered Production

Volumes'' column, and by removing the ``Beginning and Ending

Inventory'' fields from the body of the current report. A draft revised

Form MMS-4058 is included at the end of this notice. Three optional

fields were added at the request of industry representatives. A one-

character field to identify injector type, ``Operator Facility Name/

Location,'' and ``Operator/Area/Block'' will each be optional. The

number of detail lines available for reporting was also increased at

the request of industry.

Reporting Burden

The reporting burden for the Form MMS-3160 is currently estimated

at 7 minutes per report when electronically completed and 15 minutes

when manually completed. The estimate for the GAR is currently 15

minutes per report. If the Form MMS-3160 and GAR are eliminated and all

onshore properties are reported on the proposed OGOR A & B, we

anticipate that the reporting burden will be approximately the same as

for the Form MMS-3160. As explained in this Notice, many of the data

elements on the proposed OGOR are optional for onshore reporters.

Additionally, static information, such as well location and reporter

address which is required on the Form MMS-3160, is not required on the

proposed OGOR.

The reporting burden for the current OGOR is 15 minutes when

electronically completed and 30 minutes when manually completed. We

believe this burden will remain unchanged if the proposed OGOR is

implemented. However, allowing reporters the option to ``modify'' or

``amend'' their reports may help ease the reporting burden for some

parties.

The current reporting burden for the GPOR is estimated at 30

minutes per report. We estimate that the proposed GPOR will require 3

minutes per report when electronically completed and 5 minutes when

manually completed.

The current reporting burden estimate for the PASR is 15 minutes

per report. We estimate that the proposed PASR will require 7 minutes

per report when electronically completed and 15 minutes per report when

manually completed.

Dated: February 12, 1999.

Lucy Querques Denett,

Associate Director for Royalty Management.

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[FR Doc. 99-4372 Filed 2-22-99; 8:45 am]

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