Lease Sales and Fair Market Value

The Outer Continental Shelf Lands Act (OCSLA) grants the Secretary of the Interior the authority to issue leases on the Outer Continental Shelf (OCS). Section 18(a)(4) of the OCSLA states that "Leasing activities shall be conducted to assure receipt of fair market value for the lands leased and the rights conveyed by the Federal Government." Lessees pay bonuses, rentals, and royalties reflecting the value of the rights to explore and potentially develop and produce OCS oil and gas resources. 

Bid Adequacy Procedures 

On January 22, 2024, the Bureau of Ocean Energy Management (BOEM) published new bid adequacy procedures in the Federal Register (Docket No. BOEM-2023-0008) that are effective beginning with lease sales in the 2024-2029 National OCS Oil and Gas Leasing Program.  In particular, the new bid adequacy procedures: 1) update BOEM’s methodology for measuring adequacy of bids for OCS oil and gas lease sales to enhance clarity and transparency, and 2) discontinue the use of tract classification, which had minimal impact on the procedural analysis of fair market value. 

The new bid adequacy procedures and BOEM’s response to public comments on the proposed revisions can be found here: 

Historical Bid Adequacy Procedures 

Oil and Gas Fiscal Terms 

Additional Resources