only in accordance with any provision of law, or regulations issued in accordance with such provisions, that provide for DOE to allocate, transfer, exchange, or sell oil in amounts or at prices determined by such provision of law or regulations.

(2) Upon a determination by the Secretary of the Interior under paragraph (a) of this section that small refiners do have access to adequate supplies of crude oil at equitable prices, DOI may offer OCS royalty oil for sale to purchasers. Such oil shall be sold only in equal allotments, by competitive bidding, to purchasers in accordance with the regulations contained in this subpart and may not be resold in kind.

(3) All bids submitted by purchasers of OCS royalty oil must be filed in accordance with § 391.140(b). All sales of royalty oil shall be made at the regulated price or, if no regulated price applies, at not less than the fair market value of the oil.

(4) Allotments of OCS royalty oil shall be awarded to purchasers who are the highest bidders.

(5) No purchaser shall receive more than one allotment of the oil offered at each individual OCS royalty oil sale.

(6) When two or more purchasers bid the same price for the offered OCS royalty oil and their bids, by virtue of their amount, make them eligible for allotments, a drawing shall be held to determine which purchasers shall receive allotments if there are more purchasers than allotments.

(7) If a purchaser is selected for receipt of an allotment and if the purchaser's oil supply requirements, as stated in the application filed in accordance with § 391.140(b)(3), exceed the allotment of oil, the purchaser shall receive only an amount of oil equal to the allotment of oil.

(8) If a purchaser is selected for receipt of an allotment and if the purchaser's oil supply requirements, as stated in his application filed in accordance with § 391.140(b)(3), are less than the allotment of oil, the purchaser shall receive only that amount of oil requested in the application.

(9) If, after all allotments have been sold, an amount of oil remains that is determined by DOI to be large enough

for sale, the excess oil shall be made available for sale as another allotment or allotments at that time. Such allotments may be used to increase the allotments previously made.

(10) A charge for the cost of administration of an amount equal to onehalf percent of the sales price as provided for in paragraph 3 of this section shall be levied for each barrel of royalty oil sold to purchasers.

(d) Allocation or allotments from section 6 leases and certain section 8 leases. OCS royalty oil produced under a section 6 lease may be made available for sale only when the lessee elects and DOI accepts the royalty oil as payment in satisfaction of the lessee's royalty obligation. OCS royalty oil produced from either section 6 or section 8 leases that are in dispute between the United States and a State as to ownership may be made available for sale only with the concurrence of that State, and evidence of such concurrence shall be furnished by the small refiner/purchaser applicant at such time as may be specified by the designated official.

§ 391.120 Reimbursement to lessee for

transportation.

(a) When the point of delivery for OCS royalty oil produced under a section 8 lease is to be other than on or immediately adjacent to the leased area from which the oil is produced, the small refiner/purchaser shall promptly reimburse the lessee for the cost of transporting the oil to the point of delivery. Such reimbursement shall be monthly or at such other interval as may be determined by the designated official.

(b) The cost of transportation shall be approved by the designated official and may be deducted from the value of the oil at the point of delivery in calculating payments to be made to the United States. The United States guarantees payments to the lessee for such cost of transportation.

§ 390.130 Exchange agreement.

(a) Notwithstanding that OCS royalty oil purchased by a small refiner/ purchaser cannot be resold, a small refiner/purchaser may enter into an

agreement providing for the exchange of OCS royalty oil purchased for other oil on an equivalent volume of value basis. When a small refiner/purchaser anticipates entering into an exchange agreement for any of the OCS royalty oil that it may purchase, complete information regarding such agreement shall be included with the application to purchase OCS royalty oil, unless a later date for submission of such information is specified by the designated official.

(b) Exchange of OCS royalty oil shall not be authorized unless the agreement has been approved by DOI and shall become effective only upon such approval.

§ 391.140 Application; contents.

(a) Small refiner applications. To apply for the purchase of OCS royalty oil offered for sale to small refiners, an applicant must file an application during the application period (as specified in the Notice of Availability of Royalty Oil) with the designated official of the Area or region in which the oil is produced. Such application shall be filed in triplicate and shall include:

(1) Name and address of the applicant and location of its refinery or refineries, disclosure of the applicant's affiliation or association with any other refiner of oil or any other business entity if such relationship exists, and a statement of the reasons which are the bases of the applicant's belief that it qualifies as a small business concern under the rules of the Small Business Administration. The application should also include a self certification by the chief executive officier of the small refiner, or his/her designee, that the refiner is a small business concern in accordance with the rules and regulations of the Small Business Administration;

(2) Certified capacity of the applicant's refinery or refineries in crude throughput of barrels of oil per calendar day, as determined by the Economic Regulatory Administration of DOE, the amount, source and grade of all oil currently available to the applicant from the applicant's own production or by purchase, including any outstanding OCS or onshore royalty oil contracts at the time of application,

and in the case of idle facilities or those under construction, the onstream date;

(3) In the case of new or expanded refinery capacity for which no ERA certification exists that is scheduled to come into operation between the date of application and three months prior to the anticipated effective date of the award of contracts as indicated in the Notice of Availability of Royalty Oil, financial and engineering data certified by the small refiner on anticipated capacity and date of operation; such data must be sufficient to allow the designated official to determine refinery capacity;

(4) Minimum amount and grade of additional oil required to meet the applicant's refining capacity and the field or field that the applicant believes offer a potential source of OCS royalty oil supply;

(5) Tabulation for the last 12 months of refinery operation of the amount and grade of oil refined by the applicant each month and the kind and amount of the principal finished products.

(b) Purchaser applications. To receive OCS royalty oil that is for sale to the public, a purchaser applicant shall file an application during the application period (as indicated in the Notice of Availability of Royalty Oil) with the designated official of the Area or Region in which the oil is produced. Such application shall be filed in triplicate and shall include:

(1) Name and address of the applicant;

(2) Amount of the applicant's bid per barrel per grade of oil (such bid shall not exceed the ceiling price of oil as prescribed by DOE in Part 212 of this chapter); and

(3) Number of barrels and the grade of oil that the applicant desires to purchase.

§ 391.141 Action by the designated official.

(a) The designated official shall examine each application filed and, as appropriate, shall request additional information if the information included in the submitted application is inadequate or unsatisfactory. If an application is received after the close of

the application period (as indicated in the Notice of Availability of Royalty Oil), the application shall be automatically rejected. If additional information is requested by the designated official, it must be received in the office of the designated official by the time specified by the designated official or the application shall be automatically rejected.

(b) After the close of the application period and the receipt of any additional requested information, the designated official shall furnish a report to the Director who will make appropriate recommendations to the Secretary of the Interior.

§ 391.142 Action by DOI.

After determinations are made to take OCS royalty oil in kind, the Secretary of the Interior shall make the determination specified in § 391.110(a). Upon publication of such determination in the FEDERAL REGISTER, such OCS royalty oil shall be offered for sale. DOI, by publication of a Notice of Availability of Royalty Oil in the FEDERAL REGISTER, shall specify the manner in which the sale is to be effected, the approximate quantity of royalty oil to be offered, the closing date for the receipt of applications for royalty oil, other general administrative details concerning the application,

and the allocation and contract award process for the royalty oil. The Notice of Availability of Royalty Oil shall describe generally the terms upon which the royalty oil contract will be awarded. In addition, the Secretary of the Interior may authorize the Director or other designated official of the USGS to execute on behalf of the United States any contract for the sale of OCS royalty oil, to approve any exchange agreement, and to determine the amount and type of bond or other security to be required from a small refiner/purchaser in accordance with any contract.

§ 391.150 Notices.

(a) The designated official shall notify the section 8 lessees who shall be required to provide OCS royalty oil to a small refiner/purchaser under a new contract at least 30 days prior to the date on which the first delivery of such oil is to commence.

(b) When delivery of OCS royalty oil is to be suspended or terminated, the designated official shall, if practicable, notify the lessees who are providing such oil at least 30 days prior to the date on which delivery is to be suspended or terminated.

PARTS 392-399-[RESERVED]