FOR RELEASE:  November 2, 1994                 CONTACT:  Lee Scurry
                                                     (202) 208-3983

      INVITATION FOR BIDS ISSUED FOR GAS MARKETING PILOT (#40084)

     As part of a Royalty Gas Marketing Project, an Invitation for
Bids (IFB) for the sale of royalty gas from federal leases in the
Gulf of Mexico was issued October 21 by the U.S. Department of the
Interior's Minerals Management Service (MMS), officials announced
today.

     "As a component of the National Performance Review, MMS is
redesigning the gas royalty collection program to respond to a
deregulated gas market and to reduce the cost and complexity of
existing procedures," MMS Acting Director Cynthia Quarterman said. 
"Taking gas royalties as a percentage share of the production
offers a promising means for MMS to attain these objectives.

     "The IFB is an important step toward the January 1, 1995
implementation of the one-year pilot," Quarterman said.  "Bids must
be received by 2:00 PM EST on November 21, 1994, at which time they
will be opened.  One-year contracts will be competitively selected
and awarded in early December."

     The pilot is based on 91 leases volunteered by a mix of 19
major companies and independents -- Chevron, Oxy, Enron, Apache,
Oryx, Zilkha, Amoco, Texaco, Mobil, Amerada Hess, Freeport-McMoran,
Murphy, Pennzoil, Devon, Walter, Unocal, Whiting, Brooklyn Union,
and Smith.  "Thanks to the participation of these companies, we are
able to explore a completely new and innovative way of royalty
collection," Quarterman said.  "Together, we can truly reinvent
government -- where everyone will benefit as we make progress
toward a program that costs less and reduces red tape."

     The royalty share of production from these leases -- about
170,500 MMBtu's per day -- will be taken by the MMS at or near the
lease and immediately sold to competitively selected gas marketing
companies.

     The pilot will be tracked throughout the year, and a formal
evaluation will begin January 1, 1996.  The volunteer company have
agreed to share information and participate in the evaluation. 
Results of the evaluation will determine the impact on
administrative and audit efforts, and whether -- and to what extent
-- MMS will continue or expand the pilot.

     Bids should be sent to: U.S. Department of the Interior,
Minerals Management Service, Procurement Operations Branch, 381
Elden Street, MS 2500, Herndon, VA, 22070-4817, Attention:  James
E. MacKay, Contracting Officer.  For more information, contact
MacKay at (703) 787-1351.

     MMS is the federal agency that manages and regulates the
nation's natural gas, oil and other mineral resources on the Outer
Continental Shelf, and collects and disburses revenues from
offshore federal mineral leases and from onshore mineral leases on
federal and Indian lands.

                                      -MMS-

Subject: PR-11/02/94 Gas Marketing Pilot/Invitation for Bids Issued
For Gas Marketing Pilot (#40084)