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MMS promises faster lease processing Direct electronic access to seismic should cut lease issuance by a month Petroleum News Houston Staff
The U.S. Minerals Management Service, in a move that should greatly speed up the issuance of oil and gas leases in the Gulf of Mexico, has acquired direct electronic access to seismic data it uses to help determine whether it’s getting fair market value for acreage sold at lease sales.
Industry has long complained about the length of time — up to 90 days in some cases — that it takes for successful bidders to receive title to their leases.
For routine cases, the new electronic system could reduce the waiting time by at least a month, said Chris Oynes, Gulf regional director for MMS.
“The devil is in the details,” Oynes cautioned. “But it’s hard to imagine that the vast bulk of leases in this process would not get done faster.”
The current process of acquiring seismic data from vendors using digital linear tape and 8 millimeter tape alone requires six to eight weeks. More delay occurs when vendors write the data to magnetic tapes and ship them to the MMS Gulf regional office. Then additional time is needed to read the tapes and to load the data into computers. Dedicated line Under the new system, MMS said it will receive the data it needs directly from seismic company WesternGeco through a dedicated line called DS3/T-3. The process will allow MMS to download seismic data in a matter of hours, compared to the 30-day turnaround time with digital linear tape, the agency said.
Moreover, the process will eliminate the need of reading tapes for incorporation, saving one-third the time and effort required to do lease evaluations, MMS said.
“This development will fit nicely into our e-government initiative for all our offshore oil and gas operations,” MMS Director Johnnie Burton said.
While MMS accepts the lion’s share of high bids in any given Gulf of Mexico lease sale, it generally rejects at least a few when they don’t meet the agency’s standard for fair market value. Leases under the heaviest scrutiny can take up to 90 days to settle.
MMS is currently reviewing last month’s Central Gulf Lease Sale 185, which drew 561 winning bids and generated $315.5-mil in apparent high bids. MMS likely will take a close look at two blocks on the gas-prone continental shelf that received an unheard of 18 bids, the most competitively bid blocks in the entire sale.
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