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Interior Dept to break up offshore energy agency

By Ayesha Rascoe

WASHINGTON (Reuters) - The U.S. Interior Department on Wednesday said its embattled Minerals Management Service will be broken up into three separate divisions, as part of an effort to restructure the way the department handles offshore energy production.

The three new agencies will separately oversee energy leasing, revenue collection, and safety enforcement. Currently, MMS carries out all of these responsibilities.

"The Minerals Management Service has three distinct and conflicting missions that - for the benefit of effective enforcement, energy development, and revenue collection - must be divided," Interior Secretary Ken Salazar said.

Salazar announced plans last week to split the department's roles, following criticism of the agency in the weeks since the Deepwater Horizon rig explosion.

Some U.S. lawmakers and environmental groups have said it is a conflict of interest for one agency to handle both revenue collection and safety enforcement.

"It is important that we have a government that avoids even the perception of conflict," Salazar said.

Interior officials will develop a plan for implementing these changes within 30 days.

The newly created agencies are:

* Bureau of Ocean Energy Management - Will be responsible for leasing areas of the Outer Continental Shelf for conventional and renewable energy resources.

* Bureau of Safety and Environmental Enforcement - Will be responsible for ensuring comprehensive oversight, safety, and environmental protection in all offshore energy activities.

* Office of Natural Resources Revenue - Will be responsible for royalty and revenue management, including collection and distribution of revenue, auditing and compliance, and asset management.

(Reporting by Ayesha Rascoe; Editing by Alden Bentley)

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