[Federal Register Volume 75, Number 60 (Tuesday, March 30, 2010)]
[Notices]
[Page 15725]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-7032]
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DEPARTMENT OF THE INTERIOR
Minerals Management Service
[Docket No. MMS-2009-MRM-0014]
Termination of Royalty-in-Kind (RIK) Eligible Refiner Program
AGENCY: Minerals Management Service, Interior.
ACTION: Advance notice for the termination of the RIK Eligible Refiner
Program.
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SUMMARY: On behalf of the Secretary of the Interior (Secretary), the
Minerals Management Service (MMS) has conducted a determination of need
for the RIK Eligible Refiner Program under 30 CFR 208.4 and has
concluded that a need for the program no longer exists.
DATES: As a result of this determination, MMS will discontinue the
sales of Federal royalty production to eligible refiners under the
Eligible Refiner Program until further notice.
FOR FURTHER INFORMATION CONTACT: Colin Bosworth, telephone (303) 231-
3186, FAX (303) 231-3846, or e-mail [email protected].
SUPPLEMENTARY INFORMATION: The regulations at 30 CFR 208.4(a) provide
that the Secretary may evaluate crude oil market conditions from time
to time. The evaluation will include, among other things, the
availability of crude oil and the crude oil requirements of the Federal
Government, primarily those requirements concerning matters of national
interest and defense. Furthermore, the regulations at 30 CFR 208.4(b)
state that, upon a determination by the Secretary under paragraph (a)
of this section that defined eligible refiners do not have access to
adequate supplies of crude oil at equitable prices, the Secretary, at
his or her discretion, may elect to take in kind some or all of the
royalty oil accruing to the United States from oil and gas leases on
Federal lands onshore and the Outer Continental Shelf for sale to
eligible refiners.
On September 16, 2009, the Secretary announced a phased-in
termination of the RIK Program. The termination of the RIK Program
precludes future sales of Federal royalty oil to eligible refiners as
part of the Eligible Refiner Program. The MMS will honor all existing
RIK sales contracts as defined in the contract terms.
The MMS's determination is supported by decreased participation in
the RIK Eligible Refiner Program as well as eligible refiners
demonstrating a successful ability to compete in the open market. In
1999, six eligible refiners participated in the program, compared to
only two in 2009. Over the past few years, eligible refiners have been
successfully competing in the RIK Unrestricted Oil Sales Program as
well as in the open market. The RIK unrestricted oil sales were open to
any bidder who met prequalification requirements, and bidders included
many of the major oil companies operating in the United States. On
average, 50 percent of the volumes that MMS offered in the RIK
Unrestricted Oil Sales Program during the past year have been awarded
to eligible refiners. In the most recent unrestricted oil sale, one
eligible refiner bid successfully on 80 percent of the volumes that MMS
offered for sale. The decreased participation in the Eligible Refiner
Program, in conjunction with the increased success of eligible refiners
in the RIK Unrestricted Oil Sales Program, clearly demonstrates that an
RIK Eligible Refiner Program is not needed at this time.
Dated: March 18, 2010.
Gregory J. Gould,
Associate Director for Minerals Revenue Management.
[FR Doc. 2010-7032 Filed 3-29-10; 8:45 am]
BILLING CODE 4310-MR-P