Agency Information Collection Activities: Royalty and Production Reporting

AGENCY:

Office of the Secretary, Office of Natural Resources Revenue, Interior.

ACTION:

Notice of information collection; request for comment.

SUMMARY:

In accordance with the Paperwork Reduction Act of 1995, we, the Office of Natural Resources Revenue (ONRR), are proposing to renew an information collection.

DATES:

You must submit your written comments on or before October 30, 2018.

ADDRESSES:

You may submit comments on this ICR to ONRR by using one of the following three methods (please reference “ICR 1012-0004” in the subject line of your comments):

1. Electronically go to http://www.regulations.gov. In the entry titled “Enter Keyword or ID,” enter “ONRR-2011-0020” and then click “Search.” Follow the instructions to submit public comments. ONRR will post all comments.

2. Mail comments to Mr. Armand Southall, Regulatory Specialist, ONRR, P.O. Box 25165, MS 64400B, Denver, Colorado 80225-0165.

3. Hand-carry or mail comments, using an overnight courier service, to ONRR. Our courier address is Building 85, Entrance N-1, Denver Federal Center, West 6th Ave. and Kipling St., Denver, Colorado 80225.

FOR FURTHER INFORMATION CONTACT:

For questions on technical issues, contact Ms. Lee-Ann Martin, Program Manager, Reference and Reporting Management, ONRR, telephone (303) 231-3313, or email LeeAnn.Martin@onrr.gov. For other questions, contact Mr. Armand Southall, Regulatory Specialist, ONRR, telephone (303) 231-3221, or email to Armand.Southall@onrr.gov. You may also contact Mr. Southall to obtain copies (free of charge) of (1) the ICR, (2) any associated forms, and (3) the regulations that require us to collect the information.

SUPPLEMENTARY INFORMATION:

In accordance with the Paperwork Reduction Act of 1995, we provide the general public and other Federal agencies with an opportunity to comment on new, proposed, revised, and continuing collections of information. This helps us assess the impact of our information collection requirements and minimize the public's reporting burden. It also helps the public understand our information collection requirements and provide the requested data in the desired format.

We are soliciting comments on the proposed ICR that is described below. We are especially interested in public comment addressing the following issues mentioned in the OMB regulations at 5 CFR 1320.8(d)(1): (1) Is the collection necessary to the proper functions of ONRR; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might ONRR enhance the quality, utility, and clarity of the information to be collected; and (5) how might ONRR minimize the burden of this collection on the respondents, including through the use of information technology.

Comments that you submit in response to this notice are a matter of public record. ONRR will post all comments, including names and addresses of respondents at http://www.regulations.gov. We will include or summarize each comment in our request to the Office of Management and Budget (OMB) to approve this ICR. Before including your Personally Identifiable Information (PII), such as your address, phone number, email address, or other personal identifying information in your comment(s), you should be aware that your entire comment, including PII, may be made available to the public at any time. While you can ask us, in your comment, to withhold your PII from public view, we cannot guarantee that we will be able to do so. We also will post the ICR at https://www.onrr.gov/Laws_R_D/FRNotices/ICR0139.htm.

Abstract: The Secretary of the United States Department of the Interior is responsible for mineral resource development on Federal and Indian lands and the Outer Continental Shelf (OCS). Under various laws, the Secretary's responsibility is to manage mineral resources production on Federal and Indian lands and the OCS, collect royalties due, and distribute the funds collected. The Secretary also has trust responsibility to manage Indian lands and seek advice and information from Indian beneficiaries. ONRR performs the minerals revenue management functions for the Secretary and assists the Secretary in carrying out the Department's trust responsibility for Indian lands. Public laws pertaining to mineral leases on Federal and Indian lands are available at http://www.onrr.gov/Laws_R_D/PubLaws/index.htm.

Information collections that we cover in this ICR are found at title 30 CFR part 1210, subparts B, C, and D, which pertain to reporting oil, gas, and geothermal resources royalties and oil and gas production; and part 1212, subpart B, which pertains to recordkeeping.

When a company or an individual enters into a lease to explore, develop, produce, and dispose of minerals from Federal or Indian lands, that company or individual agrees to pay the lessor a share in an amount or value of production from the leased lands. The lessee, or its designee, must report various kinds of information to the lessor relative to the disposition of the leased minerals. Such information is available within the records of the lessee or others involved in developing, transporting, processing, purchasing, or selling such minerals. The information that ONRR collects includes data necessary to ensure that the lessee accurately values and appropriately pays all royalties and other mineral revenues due.

Reporters submit information into the ONRR financial accounting system that includes royalty, rental, bonus, and other payment information; sales volumes and values; and other royalty values. ONRR uses the accounting system to compare production volumes with royalty volumes to verify that companies reported and paid proper royalties for the minerals produced. Additionally, we share the data electronically with the Bureau of Safety and Environmental Enforcement, Bureau of Ocean Energy Management, Bureau of Land Management, Bureau of Indian Affairs, and Tribal and State governments so that they can perform their land and lease management responsibilities.

We use the information collected in this ICR to ensure that companies properly pay royalties based on accurate production accounting on oil, gas, and geothermal resources that they produce from Federal and Indian leases. Production data is also used to determine whether a lease is producing in paying quantities and therefore has not expired, and to track total production from Federal and Indian lands by lease, communitization agreement, unit, field or area, State, reservation, and nationally. The requirement to report accurately and timely is mandatory. Please refer to the chart for all reporting requirements and associated burden hours.

Royalty Reporting

Payors (Reporters) must report, according to various regulations, and remit royalties on oil, gas, and geothermal resources that they produced from leases on Federal and Indian lands. The reporters use the following form for royalty reporting:

Form ONRR-2014, Report of Sales and Royalty Remittance. Reporters submit this form monthly to report royalties on oil, gas, and geothermal leases. On a royalty report, reporters submit a line of data for each type of product produced from each Federal or Indian property. A royalty report is also used to report certain rents. Each line contains the royalty owed and the basic elements necessary to calculate the royalty. For example, each line of a royalty report will include the volume produced from the lease, the value of that production, and any allowances claimed by the reporter which reduced the royalty owed.

Production Reporting

Operators (Reporters) must submit, according to various regulations, production reports if they operate a Federal or Indian onshore or offshore oil and gas lease or federally approved unit or communitization agreement. We use the ONRR financial accounting system to track minerals produced from Federal and Indian lands, from the point of production to the point of disposition or royalty determination and/or point of sale. The reporters use the following forms for production accounting and reporting:

Form ONRR-4054, Oil and Gas Operations Report (OGOR). Reporters submit this form monthly for all production reporting for Outer Continental Shelf, Federal, and Indian leases. On part A of the OGOR production report, reporters submit a line of data indicating the volumes produced from each Federal or Indian well. On part B, reporters submit a line of data for each commodity, indicating the disposition of the volumes. On part C, reporters submit a line of data for each Federal or Indian property indicating any change in the volume of the inventory remaining on the property. ONRR compares the production information with sales and royalty data that reporters submit on form ONRR-2014 to ensure that the reporters paid and reported the proper royalties on the oil and gas production reported to ONRR. ONRR uses the information from OGOR parts A, B, and C to track all oil and gas from the point of production to the point of first sale or other disposition.

Form ONRR-4058, Production Allocation Schedule Report (PASR). Reporters submit this form monthly to provide allocation information for Federal offshore production. This reporting is required when a facility operator manages a measurement point where they commingle the production from an offshore Federal lease or metering point with production from other sources (i.e., State lease production) before the production is measured for a royalty determination. On each PASR, the reporter submits a line of data containing the volume of commingled oil or gas. ONRR uses the data to determine if the payors reported accurate sales volumes on the OGOR. Reporters also use the PASR to corroborate data reflected on the OGOR that the OCS lease operators submit.

OMB Approval

We are requesting OMB's approval to continue to collect this information. Not collecting this information would limit the Secretary's ability to discharge fiduciary duties and may also result in the loss of royalty payments. ONRR protects the proprietary information that it receives, and does not collect items of a sensitive nature. It is mandatory that the reporters submit forms ONRR-2014, ONRR-4054, and ONRR-4058.

II. Data

Title of Collection: Royalty and Production Reporting, 30 CFR parts 1210 and 1212.

OMB Control Number: 1012-0004.

Form Numbers: ONRR-2014, ONRR-4054, and ONRR-4058.

Type of Review: Extension of a currently approved collection.

Respondents/Affected Public: Businesses.

Total Estimated Number of Annual Respondents: 3,870 oil, gas, and geothermal reporters.

Total Estimated Number of Annual Responses: 12,873,046 lines of data.

Estimated Completion Time per Response: Varies between 1 and 7 minutes per line, depending on the activity. The average completion time is 1.96 minutes per line. The average completion time is calculated by first multiplying the estimated annual burden hours from the table below (420,241) by 60 to obtain the total annual burden minutes. Then the total annual burden minutes (25,214,460) is divided by the estimated annual number of lines submitted from the table below (12,873,046).

Total Estimated Number of Annual Burden Hours: 420,241 hours.

Respondent's Obligation: Mandatory.

Frequency of Collection: Monthly.

Total Estimated Annual Non-Hour Burden Cost: We have identified no “non-hour cost” burden associated with this collection of information.

We have not included in our estimates certain requirements that companies perform in the normal course of business that ONRR considers usual and customary. We display the estimated annual burden hours by CFR section and paragraph in the following chart.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

Authority: Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).