(a) Most bonding needs for oil and gas operations on Federal leases are discussed in 43 CFR part 3100, subpart 3104. The operator must obtain a bond in its own name as principal, or a bond in the name of the lessee or sublessee. If the operator uses the lessee or sublessee's bond, the operator must furnish a rider (consent of surety and principal) that includes the operator under the coverage of the bond. The operator must specify on the APD, Form 3160-3, the type of bond and bond number under which the operations will be conducted.

(1) For Indian oil and gas, the appropriate provisions at 25 CFR chapter I, subchapter I, govern bonding.

(2) Under the regulations at 43 CFR 3104.5 and 36 CFR 228.109, the BLM or the FS may require additional bond coverage for specific APDs. Other factors that the BLM or the FS may consider include:

(i) History of previous violations;

(ii) Location and depth of wells;

(iii) The total number of wells involved;

(iv) The age and production capability of the field; and

(v) Unique environmental issues.

(3) These bonds may be in addition to any statewide, nationwide, or separate lease bond already applicable to the lease. In determining the bond amount, the BLM may consider impacts of activities on both Federal and non-Federal lands required to develop the lease that impact lands, waters, and other resources off the lease.

(4) Separate bonds may be required for associated Rights-of-Way and/or Special Use Authorizations that authorize activities not covered by the approved APD.

(b) On Federal leases, operators may request a phased release of an individual lease bond. The BLM will grant this reduction after reclamation of some portion of the lease only if the operator:

(1) Has satisfied the terms and conditions in the plan for surface reclamation for that particular operation; and

(2) No longer has any down-hole liability.

(c) If appropriate, the BLM may reduce the bond in the amount requested by the operator or appropriate surface managing agency. The FS also may reduce bonds it requires (but not the BLM-required bonds). The BLM and the FS will base the amount of the bond reduction on a calculation of the sum that is sufficient to cover the remaining operations (including royalty payments) and abandonment (including reclamation) as authorized by the Surface Use Plan of Operations.