Issues » Comments on Rules and Regulations

Industry Comments Regarding OCS Lease Form Cover Letter

February 22, 1999

Ms. Terry Holman
Minerals Management Service
Mail Stop 4230
1849 C Street, N.W.
Washington, D.C. 20240

Dear Ms. Holman:

The American Petroleum Institute (API), the National Ocean Industries Association (NOIA), the Independent Petroleum Association (IPAA), the United States Oil and Gas Association (USOGA), the Domestic Petroleum Council (DPC), and the Offshore Operators Committee (OOC) submit the attached written comments regarding the MMS proposed revisions to Form MMS-2005, the OCS lease form used under the Outer Continental Shelf Lands Act for oil and gas exploration and production. These six associations collectively represent thousands of companies that are engaged in all aspects of the oil and natural gas industry on a daily basis.

Industry has appreciated the opportunities provided by MMS to ensure that all interested parties have had the maximum opportunity to provide input on this issue. In particular the two workshops have been most helpful. Industry is also pleased that MMS has determined not to use any revised lease form in the upcoming March 17 lease sale for the Central Gulf of Mexico. Industry strongly urges MMS to retain the existing lease form until all issues concerning the proposed revised form have been resolved.

Industry has raised several concerns with the proposed revised lease form. The stated purpose of the MMS proposed revision is to rewrite the core document in "plain English," identify and clarify the rights of all parties to the lease, and avoid ambiguities and redundancy. However, some of the language in the proposed revised lease form has created confusion, created new obligations to the lessee, and made substantive policy changes. Some of the proposed language concerns issues that are currently in litigation.

The six trade associations strongly urge MMS to consider fully the issues raised in the attached comments. Since this is not a rulemaking, we anticipate that there will be further opportunities for discussion and comment. Industry requests the opportunity to review subsequent drafts of the revised lease form and would like the opportunity to comment on these subsequent revisions in a workshop or other appropriate setting. If you have any questions regarding these comments, please contact Linda Bauch of API’s Regulatory Affairs Department at 202-682-8170.