BOEMRE Names Senior Managers

- BOEMRE Names Senior Managers

Monday, September 12, 2011
Bureau of Ocean Energy Management, Regulation and

Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) Director Michael R. Bromwich on Monday announced several key appointments to high-level positions in the two new, independent agencies that will carry out the offshore energy management and enforcement functions currently under the jurisdiction of BOEMRE. The Bureau of Ocean Energy Management (BOEM) and the Bureau of Safety and Environmental Enforcement (BSEE) will begin operating on October 1, 2011.

"I am pleased to announce my selection of a group of exceptionally qualified individuals," said Director Bromwich. "Throughout the recruitment process, we have looked for leaders who are technically skilled and experienced, and who can lead our ongoing efforts to enhance the safety of offshore exploration and production. The new leadership represents a combination of talented people from inside the agency with an exceptionally well-qualified group of people recruited from outside the agency."

BOEM will be responsible for managing development of the nation's offshore resources in an environmentally and economically responsible way. Functions will include: Leasing, Plan Administration, Environmental Studies, National Environmental Policy Act Analysis, Resource Evaluation, Economic Analysis and the Renewable Energy Program.

Some of the key leaders for BOEM will include:

• Dr. Walter D. Cruickshank, who will serve as the BOEM Deputy Director. Dr. Cruickshank has more than 25 years of experience at the Department of Interior. He most recently served as the BOEMRE Deputy Director. He earned a Bachelor of Arts in Geological Sciences from Cornell University and Doctorate in Mineral Economics from the Pennsylvania State University.
• Renee Orr, who will serve as BOEM's Strategic Resources Chief in BOEM. She has more than 23 years of experience with the Department of the Interior. Ms. Orr has overseen the staff implementation teams that have been at the core of the bureau's reorganization effort, and previously served as Chief of Leasing where she was responsible for the development and completion of several 5-Year Oil and Gas Leasing Programs. She earned Bachelor of Arts degrees in Economics and History from Metropolitan State College in Denver.
• Maureen Bornholdt, who will serve as the BOEM Renewables Chief. Ms. Bornholdt has more than 27 years of experience with the Department of the Interior. She most recently served as the Project Manager for BOEMRE's Offshore Renewable Energy Program. Ms. Bornholdt earned a Bachelor of Science in Public Administration from George Mason University.
• Ellen G. Aronson, who will serve as the BOEM Pacific Region Director. Ms. Aronson has over 33 years of experience with the Department of the Interior. She most recently served as the BOEMRE Pacific Region Director. Ms. Aronson earned a Bachelor of Arts in Liberal Arts from Sara Lawrence College and a Master's of Urban and Regional Planning from the University of Southern California.
• Dr. James Kendall, who will serve as the BOEM Alaska Region Director. Dr. Kendall has over 27 years of experience with the Department of the Interior. He most recently served as the BOEMRE Alaska Region Director. Dr. Kendall earned a bachelor's degree in biology from Old Dominion University, Ph.D. in oceanography from Texas A&M University, and a Post-doctoral Fellowship in Marine Biology from the Hebrew University of Jerusalem, Israel. He is also a graduate of the Federal Executive Institute, Charlottesville, Virginia, and the Senior Executive Fellows Program of the John F. Kennedy School of Government at Harvard University.
• John Rodi, who has been the Deputy Regional Director of BOEMRE's Gulf of Mexico Region since November 2007 and will serve as the BOEM Gulf of Mexico Acting Regional Director until a permanent Regional Director is selected. Mr. Rodi has more than 40 years of federal service with five different agencies. Mr. Rodi has both Bachelor and Master Degrees in Economics from Tulane University and the University of New Orleans, respectively.

BSEE will enforce safety and environmental regulations. Functions will include: All field operations including Permitting and Research, Inspections, Offshore Regulatory Programs, Oil Spill Response, and newly formed Training and Environmental Compliance functions.

Some of the key leaders for BSEE will include:

• Charles Barbee, who will serve as the BSEE Chief of the Environmental Enforcement Division. Mr. Barbee has more than 20 years of experience with the U.S. Coast Guard. Most recently, he was the Coast Guard's program manager for both marine investigations and environmental crime. During his career, Mr. Barbee has specialized in oil spill contingency planning, pollution investigation and response, marine inspections and marine casualty investigations. He graduated and received his commission from the U.S. Coast Guard Academy and earned a Master's Degree in Organizational Management from the University of Phoenix.
• Chris Barry, who will serve as the BSEE Director of the National Offshore Training Center. Mr. Barry currently serves as Chief of National Training and Leadership for the Federal Emergency Management Agency in the National Preparedness Directorate. He earned a Bachelor of Arts (dual) degree in Art History and Special Education and a Master of Instructional Systems Design.
• David Moore, who will serve as the BSEE Oil Spill Response Supervisor. Mr. Moore has more than 14 years of experience with the Department of the Interior. He most recently served as the Coordinator of BOEMRE's Oil Spill Program. He earned a Master of Engineering degree from Tulane University and a Master of Urban and Regional Planning degree from the University of New Orleans.
• Bob Brown, who will serve as the BSEE Associate Director for Administration. Mr. Brown has more than 30 years of experience at the Department of the Interior, Small Business Administration and U.S. Navy. He most recently served as the BOEMRE Associate Director for Administration and Budget and Chief Information Officer. Mr. Brown earned a Bachelor of Arts degree from Seton Hall University and pursued post-graduate studies in History at Georgetown University.
• Lars Herbst, who will serve as the BSEE Gulf of Mexico Regional Director. Mr. Herbst has over 27 years of experience with the Department of the Interior. He most recently served as the Gulf of Mexico Regional Director for BOEMRE. He is a registered professional engineer in the State of Louisiana and earned a Bachelor of Science in Petroleum Engineering from Louisiana State University.
• Jaron E. Ming, who will serve as the BSEE Pacific Region Director. Mr. Ming most recently served as the Pacific Region's Lead Leasing Specialist. He previously served as the Senior Policy Advisor to the Regional Director. He started his career in the federal government as a Presidential Management Fellow. Mr. Ming earned a Bachelor of Arts degree from Georgetown University, a Master of Arts degree in Marine Affairs and Policy from the University of Miami's Rosenstiel School of Marine and Atmospheric Science, and a Juris Doctorate degree from the University of Miami School of Law.
• Mark Fesmire, who will serve as the BSEE Alaska Region Director. Mr. Fesmire most recently served in the New Mexico Energy Minerals and Natural Resources Department, where he has was the Director of the state oil and gas regulatory agency and Chairman of the Oil and Gas Commission for the past seven years. Prior to attending New Mexico State University where he received bachelor's degrees in Geological and Civil Engineering, Mr. Fesmire worked in the offshore oil fields of the Gulf of Mexico. After 12 years as a petroleum engineer, he completed Law School at the Texas Tech University School of Law. He is a Registered Professional Petroleum Engineer and Licensed Attorney.

BSEE is currently accepting applications for the Deputy Director position.

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BOEMRE Issues Final Update on Lee Evacuations

- BOEMRE Issues Final Update on Lee Evacuations

Friday, September 09, 2011
BOEMRE

The Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE) Hurricane Response Team is concluding its activities related to Tropical Storm Lee. This is the final update of evacuation and shut-in production statistics for Tropical Storm Lee.

Based on data from offshore operator reports submitted as of 11:30 a.m. CDT today, personnel remain evacuated from a total of 4 production platforms, equivalent to 0.7 percent of the 617 manned platforms in the Gulf of Mexico. Production platforms are the structures located offshore from which oil and natural gas are produced. Unlike drilling rigs, which typically move from location to location, production facilities remain in the same location throughout a project’s duration

None of the 70 rigs currently operating in the Gulf remain evacuated. Rigs can include several types of self-contained offshore drilling facilities including jackup rigs, submersibles and semisubmersibles.

As part of the evacuation process, personnel activate the applicable shut-in procedure, which can frequently be accomplished from a remote location. This involves closing the sub-surface safety valves located below the surface of the ocean floor to prevent the release of oil or gas. During the recent hurricane seasons, the shut-in valves functioned 100 percent of the time, efficiently shutting in production from wells on the Outer Continental Shelf and protecting the marine and coastal environments. Shutting-in oil and gas production is a standard procedure conducted by industry for safety and environmental reasons.

From operator reports, it is estimated that approximately 6.2 percent of the current oil production in the Gulf of Mexico has been shut-in. It is also estimated that approximately 4.0 percent of the natural gas production in the Gulf of Mexico has been shut-in. The production percentages are calculated using information submitted by offshore operators in daily reports. Shut-in production information included in these reports is based on the amount of oil and gas the operator expected to produce that day. The shut-in production figures therefore are estimates, which BOEMRE compares to historical production reports to ensure the estimates follow a logical pattern.

After the storm has passed, facilities are inspected. Once all standard checks have been completed, production from undamaged facilities will be brought back on line immediately. Facilities sustaining damage may take longer to bring back on line. BOEMRE will no longer report Tropical Storm Lee statistics.

This survey information is reflective of 21 companies’ reports as of 11:30 a.m. CDT today.

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All Evacuated Personnel nearly Returned - BOEMRE

- All Evacuated Personnel nearly Returned - BOEMRE

Wednesday, September 07, 2011
BOEMRE

Offshore oil and gas operators in the Gulf of Mexico are re-boarding platforms and rigs, and restoring production following Tropical Storm Lee. The Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE) Hurricane Response Team is monitoring the operators' activities. The team will continue to work with offshore operators and other state and federal agencies until operations return to normal.

Based on data from offshore operator reports submitted as of 11:30 a.m. CDT Wednesday, personnel remain evacuated from a total of 21 production platforms, equivalent to 3.4 percent of the 617 manned platforms in the Gulf of Mexico. Production platforms are the structures located offshore from which oil and natural gas are produced. Unlike drilling rigs, which typically move from location to location, production facilities remain in the same location throughout a project's duration

Personnel have been evacuated from 4 rigs, equivalent to 5.7 percent of the 70 rigs currently operating in the Gulf. Rigs can include several types of self-contained offshore drilling facilities including jackup rigs, submersibles and semisubmersibles.

As part of the evacuation process, personnel activate the applicable shut-in procedure, which can frequently be accomplished from a remote location. This involves closing the sub-surface safety valves located below the surface of the ocean floor to prevent the release of oil or gas. During the recent hurricane seasons, the shut-in valves functioned 100 percent of the time, efficiently shutting in production from wells on the Outer Continental Shelf and protecting the marine and coastal environments. Shutting-in oil and gas production is a standard procedure conducted by industry for safety and environmental reasons.

From operator reports, it is estimated that approximately 36.9 percent of the current oil production in the Gulf of Mexico has been shut-in. It is also estimated that approximately 18.1 percent of the natural gas production in the Gulf of Mexico has been shut-in. The production percentages are calculated using information submitted by offshore operators in daily reports. Shut-in production information included in these reports is based on the amount of oil and gas the operator expected to produce that day. The shut-in production figures therefore are estimates, which BOEMRE compares to historical production reports to ensure the estimates follow a logical pattern.

After the storm has passed, facilities will be inspected. Once all standard checks have been completed, production from undamaged facilities will be brought back on line immediately. Facilities sustaining damage may take longer to bring back on line. BOEMRE will continue to update the evacuation and shut-in statistics at 1:00 p.m. CDT each day as appropriate.

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BOEMRE: Additional Personnel Redeployed at GOM

- BOEMRE: Additional Personnel Redeployed at GOM

Tuesday, September 06, 2011
BOEMRE

Offshore oil and gas operators in the Gulf of Mexico are re-boarding platforms and rigs following Tropical Storm Lee. The Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE) Hurricane Response Team is monitoring the operators' activities. The team will continue to work with offshore operators and other state and federal agencies until operations return to normal.

Based on data from offshore operator reports submitted as of 11:30 a.m. CDT Tuesday, personnel have been evacuated from a total of 131 production platforms, equivalent to 21.2 percent of the 617 manned platforms in the Gulf of Mexico. Production platforms are the structures located offshore from which oil and natural gas are produced. Unlike drilling rigs, which typically move from location to location, production facilities remain in the same location throughout a project's duration.

Personnel have been evacuated from 12 rigs, equivalent to 17.1 percent of the 70 rigs currently operating in the Gulf. Rigs can include several types of self-contained offshore drilling facilities including jackup rigs, submersibles and semisubmersibles.

As part of the evacuation process, personnel activate the applicable shut-in procedure, which can frequently be accomplished from a remote location. This involves closing the sub-surface safety valves located below the surface of the ocean floor to prevent the release of oil or gas. During the recent hurricane seasons, the shut-in valves functioned 100 percent of the time, efficiently shutting in production from wells on the Outer Continental Shelf and protecting the marine and coastal environments. Shutting-in oil and gas production is a standard procedure conducted by industry for safety and environmental reasons.

From operator reports, it is estimated that approximately 60.5 percent of the current oil production in the Gulf of Mexico has been shut-in. It is also estimated that approximately 41.6 percent of the natural gas production in the Gulf of Mexico has been shut-in. The production percentages are calculated using information submitted by offshore operators in daily reports. Shut-in production information included in these reports is based on the amount of oil and gas the operator expected to produce that day. The shut-in production figures therefore are estimates, which BOEMRE compares to historical production reports to ensure the estimates follow a logical pattern.

After the storm has passed, facilities will be inspected. Once all standard checks have been completed, production from undamaged facilities will be brought back on line immediately. Facilities sustaining damage may take longer to bring back on line. BOEMRE will continue to update the evacuation and shut-in statistics at 1:00 p.m. CDT each day as appropriate.

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BOEMRE: Operators Evacuate Ops in GOM

- BOEMRE - Operators Evacuate Ops in GOM

Monday, September 05, 2011
BOEMRE

Offshore oil and gas operators in the Gulf of Mexico are evacuating platforms and rigs in the path of Tropical Storm Lee. The Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE) Hurricane Response Team is monitoring the operators' activities. The team will continue to work with offshore operators and other state and federal agencies until operations return to normal and the storm is no longer a threat to Gulf of Mexico oil and gas activities.

Based on data from offshore operator reports submitted as of 11:30 a.m. CDT Sunday, personnel have been evacuated from a total of 239 production platforms, equivalent to 38.7 percent of the 617 manned platforms in the Gulf of Mexico. Production platforms are the structures located offshore from which oil and natural gas are produced. Unlike drilling rigs, which typically move from location to location, production facilities remain in the same location throughout a project's duration

Personnel have been evacuated from 25 rigs, equivalent to 35.7 percent of the 70 rigs currently operating in the Gulf. Rigs can include several types of self-contained offshore drilling facilities including jackup rigs, submersibles and semisubmersibles.

As part of the evacuation process, personnel activate the applicable shut-in procedure, which can frequently be accomplished from a remote location. This involves closing the sub-surface safety valves located below the surface of the ocean floor to prevent the release of oil or gas. During the recent hurricane seasons, the shut-in valves functioned 100 percent of the time, efficiently shutting in production from wells on the Outer Continental Shelf and protecting the marine and coastal environments. Shutting-in oil and gas production is a standard procedure conducted by industry for safety and environmental reasons.

From operator reports, it is estimated that approximately 60.2 percent of the current oil production in the Gulf of Mexico has been shut-in. It is also estimated that approximately 44.3 percent of the natural gas production in the Gulf of Mexico has been shut-in. The production percentages are calculated using information submitted by offshore operators in daily reports. Shut-in production information included in these reports is based on the amount of oil and gas the operator expected to produce that day. The shut-in production figures therefore are estimates, which BOEMRE compares to historical production reports to ensure the estimates follow a logical pattern.

After the hurricane has passed, facilities will be inspected. Once all standard checks have been completed, production from undamaged facilities will be brought back on line immediately. Facilities sustaining damage may take longer to bring back on line. BOEMRE will continue to update the evacuation and shut-in statistics at 1:00 p.m. CDT each day as appropriate.

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BOEMRE Unveils New Development, Permit Tools

- BOEMRE Unveils New Development, Permit Tools

Tuesday, August 30, 2011
BOEMRE

Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) Director Michael R. Bromwich today announced that the bureau has developed and implemented several new tools to help offshore oil and gas operators improve their exploration and development plan and permit applications. These tools will allow offshore operators to better track their submissions and improve the quality and completeness of their applications, which will decrease processing delays.

“We continue to meet with operators individually and in large groups on a frequent basis. We take very seriously requests for additional information and additional clarity regarding our plan and permit review process. Recently, we have been asked to identify the most common errors and the most frequently-encountered reasons for plan and permit applications to be returned to operators,” said Director Bromwich. “Our goal is to reduce the amount of back and forth with plan and permit applications and to help the industry learn from the best practices that many operators have developed to submit successful applications. That will result in higher quality applications in the first instance and reduce the need for them to be returned to operators. We will continue to search for additional ways to improve our own processes and make them more efficient, without in any way modifying or relaxing the more stringent safety and environmental rules we have implemented over the past year.”

For a complete list of BOEMRE’s reforms to date, go to:
http://boemre.gov/ReorganizationRegulatoryReform.htm

With respect to permits, BOEMRE has added a new feature to its online application system (eWells), which allows authorized users to track the status of permit applications. This allows operators to follow where their application is in the processing system. This increases transparency and provides greater predictability for operators.

With respect to plans, BOEMRE has announced a new online resource to help operators improve the accuracy of their exploration plan (EP) and development operation coordination document (DOCD) submissions. The website offers fact sheets and documents to assist offshore operators in submitting complete applications, which will decrease processing delays. Guidance includes a fact sheet that offers information on how operators can submit stronger applications, frequently asked questions on the specific elements of a successful submission, and a new EP/DOCD checklist that can be used to ensure the inclusion of needed information in an operator’s application. The page is online at: http://www.gomr.boemre.gov/homepg/plans/index.html.

Today’s announcements were shared with more than 200 offshore industry personnel at a workshop held by BOEMRE in its Gulf of Mexico Regional office. The full-day workshop includes a discussion of common errors and omissions found in the submission of permit applications, and overviews and updates on sub-sea containment and the bureau’s well screening tool. One highlight will be an industry panel that will discuss proven methods and strategies for the completion of fully compliant permit applications focusing on the well screening tool, a critical aspect of the sub-sea containment requirements which is most often a cause of returned permit applications.

These improvements in the permit and plan review process are consistent with other reforms in the process that have recently been implemented. In early June, BOEMRE announced specific improvements to the permit application and review process, including the publication of a permit application checklist to assist offshore oil and gas operators in submitting complete applications to drill. The bureau also implemented a requirement that BOEMRE personnel conduct completeness checks before beginning an in-depth, substantive review of the application. This allows staff to capture the major gaps in the submission early in the review process. In addition, we developed clear permit review priorities that will expedite our review. For more information, go to:
http://www.boemre.gov/ooc/press/2011/press0603.htm.

BOEMRE has approved 113 deepwater permits for 34 unique wells that require subsea containment since an applicant first successfully demonstrated containment capabilities in mid-February. There are currently 17 permits pending and 22 permits have been returned to the operator with requests for additional information, particularly information regarding containment. Additionally, BOEMRE has approved 45 permits for activities including water injection wells and procedures using surface blowout preventers. Only 1 of these permits is pending and 1 permit has been returned to the operator for additional information.

BOEMRE has also approved 69 new shallow water well permits have been issued since the implementation of new safety and environmental standards on June 8, 2010. Permits have averaged more than 7 per month since fall 2010, compared to an average of 8 permits per month in 2009. Just 13 of these permits are currently pending; with 10 having been returned to the operator for more information.

For more information on permit approvals, go to:
http://www.gomr.boemre.gov/homepg/offshore/safety/well_permits.html

For more information on plan approvals, go to:
http://www.gomr.boemre.gov/homepg/offshore/safety/well_plans.html

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BOEMRE to Hold First GOM Lease Sale since Spill

- BOEMRE to Hold First GOM Lease Sale since Spill

Friday, August 19, 2011
BOEMRE

Secretary of the Interior Ken Salazar and Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) Director Michael R. Bromwich announced that BOEMRE will hold the first oil and natural gas lease sale in the Gulf of Mexico since the Deepwater Horizon explosion and oil spill. Consistent with steps President Obama announced in May 2011 to expand domestic oil and gas production safely and responsibly, the proposed Western Gulf of Mexico Lease Sale 218 is scheduled to be held in New Orleans on December 14, 2011. The sale will include all available unleased areas in the Western Gulf Planning Area offshore Texas.

"This sale is an important step toward a secure energy future that includes safe, environmentally-sound development of our domestic energy resources," Secretary Salazar said. "Since Deepwater Horizon, we have strengthened oversight at every stage of the oil and gas development process, including deepwater drilling safety, subsea blowout containment, and spill response capability. Exploration and development of our Western Gulf's vital energy resources will continue to help power our nation and drive our economy."

"BOEMRE has taken aggressive steps to renew our commitment to the responsible stewardship of the U.S. Outer Continental Shelf," said Director Bromwich. "The decision to hold this sale was made after careful analysis of the best scientific information available and consideration of all public comments received."

The proposed lease sale encompasses about 3,900 un-leased blocks covering approximately 20.6 million acres. The blocks are located from 9 to about 250 miles offshore, in water depths ranging from 16 to more than 10,975 feet (5 to 3,346 meters). BOEMRE estimates the proposed lease sale could result in the production of 222 to 423 million barrels of oil and 1.49 to 2.65 trillion cubic feet of natural gas.

As part of the Administration's commitment to provide incentives for diligent development, and to ensure receipt of fair market value for the lease rights sold, BOEMRE proposes to increase the minimum bid amount for blocks in water depths of 1,312 feet (400 meters) and greater to $100 per acre. The minimum bid for those water depths in previous sales was $37.50 per acre.

This change is based on a rigorous historical analysis of the last 15 years of lease sales in the Gulf of Mexico. The analysis, adjusted for energy prices at time of each sale, demonstrates that leases that received high bids of less than $100 per acre have experienced virtually no exploration and development activities. In light of this analysis, BOEMRE has concluded that the increase will have little to no adverse impact on the timing or magnitude of production from tracts offered in this sale. Raising the minimum bid will discourage companies from purchasing leases they are unlikely to explore in the near term.

"BOEMRE is proposing this increase in an effort to ensure that areas with the greatest resource potential are developed, and to decrease the amount of leased acreage that is warehoused and goes unexplored," Director Bromwich said. "The change in terms will better ensure that the nation's resources are being developed in a timely manner."

The minimum bid amount for leases in the much more heavily explored and produced shallower water depths will remain at $25 per acre.

The lease sale will include environmental stipulations requiring that operators protect biologically sensitive features, as well as marine mammals and sea turtles. These stipulations will require trained observers to ensure compliance and restrict operations when conditions warrant.

Lease Sale 218 is the last remaining Western Gulf Planning Area sale scheduled in the 2007 – 2012 Outer Continental Shelf Oil and Natural Gas Leasing Program. The terms and conditions outlined in the package are not final. Different terms and conditions may be employed in the Final Notice of Sale, which will be published at least 30 days before the sale.

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BOEMRE Confirms Fatality at Platform Offshore Tx.

- BOEMRE Confirms Fatality at Platform Offshore Tx.

Wednesday, August 17, 2011
BOEMRE

The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) has confirmed that agency personnel responded on August 16 to a report of a fatality at Energy Resource Technology's High Island (HI) Block A557 Platform A. This is an oil and gas production platform approximately 75 miles offshore Texas, in about 224 feet of water.

According to the operator's report, an incident occurred early on the morning of August 16 during a crane lift in which a large piece of equipment was being loaded from the platform to a workboat. An apparent failure of the boom hoist cable led to a collapse of the crane, which set off a series of events in which the crane's harness struck and fatally wounded an employee. There was no production ongoing at the time of the accident.

BOEMRE inspectors traveled to the platform yesterday and have begun an independent investigation into the cause of the accident.

"This was a tragic accident. Our thoughts and prayers are with the family of the deceased employee, as well as his colleagues and friends. This incident provides the most dramatic possible reminder of what is at stake as we work with industry to ensure the highest safety standards on offshore facilities and do everything possible to minimize the risk of such accidents," said BOEMRE Director Michael R. Bromwich.

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About to Buck The Trend

- About to Buck The Trend

Friday, August 05, 2011
Rigzone Staff
by Trey Cowan

Looking back to the second quarter, the jackup dayrate trend is down 2 percent to $106k/day versus 1Q11 rates. Floaters on the other hand did not experience any change in pricing from one quarter to the next, holding steady at $378k/day.

Commodity jackup dayrates suffered the most, down 5.6 percent to an average of $70k/day during 2Q. Standard jackup rates fell 2.2 percent to 96k/day and premium jackup rigs fell at the slowest pace of 1.6 percent to $135k/day, all on a quarter-over-quarter basis.

While the chart shows an ongoing downward trend, the future actually looks good for jackup rate improvement, based on recent activity. Jackup rates for July improved 1 percent to $107k/day, up $1,000 from June's average of $106k/day. When looking at capabilities and water depths served, premium jackups grew at a faster pace (3 percent to 139k/day) during the month. We continue to hear commentary pointing to a bifurcated marketplace with higher demand for premium rigs relative to standard 300' rigs or commodity rigs that serve in 250' waters or less.

Based on contracts already booked, dayrates for premium jackups are likely to improve 8 percent during the second half of 2011. This compares favorably to 4 percent overall growth in dayrates anticipated for jackups, which translates into an average increase of 5,000/day for jackups during the second half of 2011.

Looking solely at the rig counts, global offshore activity improved during the month of July when compared to June. There are now 543 rigs under contract around the world, up ten from last month (as both floaters and jackups added 5 rigs-a-piece to their respective rolls). The overall fleet size also grew during the month by a net five rigs (3 floaters and 2 jackups) to 756 rigs marketed globally.

Permitting in the Gulf of Mexico Year to Date

In water depths of less than 500 feet, there have been 41 "New Well" permits issued by the BOEMRE year-to-date. "Revised New Well" permits number 64 that have been issued since January 3rd 2011. The average pace for New Well and Revised New Well permit approvals appears to be 15 per month in shallow waters. In water depths of more than 500 feet there have been 12 New Well permits issued by the BOEMRE year-to-date. Since Jan. 3, 52 Revised New Well permits have been issued by the BOEMRE. Thus, the average pace for New Well and Revised New Well permit approvals for deepwater projects is 9 per month.

To put all this into perspective, combine the two averages together and you see that the BOEMRE is averaging 24 approvals per month. This is an anemic pace considering that the inspection staff of the BOEMRE is ~50 individuals and growing. That means at the current staff levels the BOEMRE's inspectors are approving either a "New Well" or "Revised New Well" at a pace of one every two months.

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BOEMRE Reports Final Update on Tropical Storm Don

- BOEMRE Reports Final Update on Tropical Storm Don

Monday, August 01, 2011
BOEMRE

The Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE) Hurricane Response Team is concluding its activities related to Tropical Storm Don.

This is the final update of evacuation and shut-in production statistics for Tropical Storm Don.

Based on data from offshore operator reports submitted as of 11:30 a.m. CDT today, none of the 617 manned production platforms in the Gulf of Mexico remain evacuated. Production platforms are the structures located offshore from which oil and natural gas are produced. Unlike drilling rigs, which typically move from location to location, production facilities remain in the same location throughout a project’s duration.

None of the 62 rigs currently operating in the Gulf remain evacuated. Rigs can include several types of self-contained offshore drilling facilities including jackup rigs, submersibles and semisubmersibles.

As part of the evacuation process, personnel activate the applicable shut-in procedure, which can frequently be accomplished from a remote location. This involves closing the sub-surface safety valves located below the surface of the ocean floor to prevent the release of oil or gas. During the recent hurricane seasons, the shut-in valves functioned 100 percent of the time, efficiently shutting in production from wells on the Outer Continental Shelf and protecting the marine and coastal environments. Shutting-in oil and gas production is a standard procedure conducted by industry for safety and environmental reasons.

From operator reports, it is estimated that approximately 2.3 percent of the current oil production in the Gulf of Mexico has been shut-in. It is also estimated that approximately 0.9 percent of the natural gas production in the Gulf of Mexico has been shut-in. The remaining shut-in production is not associated with any reported damage.

The production percentages are calculated using information submitted by offshore operators in daily reports. Shut-in production information included in these reports is based on the amount of oil and gas the operator expected to produce that day. The shut-in production figures therefore are estimates, which BOEMRE compares to historical production reports to ensure the estimates follow a logical pattern.

After the tropical storm passes, facilities are inspected. Once all standard checks have been completed, production from undamaged facilities is brought back on line immediately. Facilities sustaining damage may take longer to bring back on line. BOEMRE will no longer report Tropical Storm Don statistics.

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BOEMRE Improves Efficiency of Permit Review Process

- BOEMRE Improves Efficiency of Permit Review Process

Friday, June 03, 2011
BOEMRE

Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) Director Michael R. Bromwich announced that the bureau is putting in place significant improvements in the oil and gas permit application process. These improvements include the publication of a permit application checklist to assist offshore oil and gas operators in submitting complete applications to drill; the implementation of completeness checks by BOEMRE personnel before significant staff time is spent reviewing the application; and the development of clear permit review priorities that will expedite agency reviews.

"We are constantly looking for ways to create a smarter, more efficient, and more transparent permit review process," said Director Bromwich. "Our goal is to make the process of submitting permit applications easier, reduce the time it takes to review permits and improve BOEMRE's communication with operators during the permit review process. We will continue to search for additional ways to improve our processes without in any way modifying or relaxing the more stringent safety and environmental rules we have implemented over the past year."

Key improvements that are being implemented include:

• The publication of a "completeness" checklist for offshore oil and gas operators. This high-level checklist, which aligns with BOEMRE's review process, includes the main components that need to be submitted by operators to make a permit application complete. This checklist does not ensure approval of an application, but will clarify for operators what is needed in their submission. The development of the checklist comes after multiple meetings with operators who have requested such additional guidance.
• To improve the efficiency of the review process and reduce the number of permits returned to operators because of incomplete information, BOEMRE personnel will conduct completeness checks before beginning an in-depth, substantive review of the application. Bureau personnel will focus on identifying significant omissions during the initial review so as to quickly identify applications that are not ready for full review. Deficiencies and omissions will be communicated to the operator for correction at the same time. This does not guarantee that incomplete information will not be found later in the review, but the completeness check is designed to capture the major gaps in submission criteria early in the review process.
• In an effort to ensure efficiency, permits found to be complete will have a higher priority in the review process. The bureau has established priorities for reviewing permit applications as follows: 

o Permits for ongoing operations, such as sidetracks or deeper exploration of an existing well;

o Applications deemed complete; and

o If staff time allows, applications that are not deemed complete, such as those missing a required containment plan or the necessary professional engineer certifications, may begin to be processed. This category also includes permit applications without an approved exploration or development plan.

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BHP Billiton Gets BOEMRE Nod for GOM Drilling

- BHP Billiton Gets BOEMRE Nod for GOM Drilling

Wednesday, June 01, 2011
BOEMRE

The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) has approved a drilling permit for the fifteenth deepwater well to comply with rigorous new safety standards implemented in the wake of the Deepwater Horizon explosion and resulting oil spill. This includes satisfying the requirement to demonstrate the capacity to contain a subsea blowout.

The approved permit is for BHP Billiton Petroleum (GOM) Inc. to drill a new development well in Green Canyon Block 653 in 4,232 feet water depth, approximately 120 miles off the Louisiana shoreline, south of Houma. Today's approval is for a new well being drilled under a Development Operations Coordination Document that was approved on May 31, 2011, for which BOEMRE completed a site-specific Environmental Assessment.

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BOEMRE Appoints New Regional Director for Alaska

- BOEMRE Appoints New Regional Director for Alaska

Wednesday, May 25, 2011
BOEMRE

Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) Director Michael R. Bromwich named Dr. James Kendall as the Director of the Alaska Outer Continental Shelf (OCS) Region. Dr. Kendall has been serving as the Acting Director for the region since January 1, 2011.

"Jim is absolutely the right person for the job. We have very difficult decisions to make regarding energy development offshore Alaska, and the American public must have complete confidence that those decisions will be informed by the best scientific information available," said Director Bromwich. "Jim embodies the principles of scientific integrity. He is committed to openness and transparency, and he is a dedicated public servant. The feedback I have received regarding Jim's tenure over the last few months as Acting Regional Director from environmental organizations, industry groups, and other stakeholders has been uniformly positive – they have praised Jim's openness, his accessibility, and his willingness to listen to all points of view. This praise has been universal, including from stakeholders who have been critical of our office in the past. I am very pleased to have him at the helm of the Alaska Regional office."

Dr. Kendall most recently served as the Chief of BOEMRE's Environmental Division, where he was responsible for overseeing the Bureau's $30 million applied environmental and socioeconomic research program, its responsibilities under the National Environmental Policy Act, its environmental compliance responsibilities and the Coastal Impact Assistance Program. Prior to joining the BOEMRE Headquarters Office in 2000, Dr. Kendall served as the Chief of the Environmental Sciences Section of BOEMRE's Gulf of Mexico Region.

"Working with the Regional BOEMRE team these past few months has been an honor. They are true professionals, committed to environmental protection, responsible energy development and our nation," Dr. Kendall said. "The Alaska OCS is both an environmental treasure and a vital, strategic national resource and I am committed to ensuring safe and environmentally sound stewardship of its resources."

BOEMRE's Alaska Region oversees the exploration and development of oil and gas resources in federal waters offshore Alaska. This includes assessments of the oil and gas resources, preparation of environmental analysis and research, coordination with local, state, tribal and federal governments, and others interested in the OCS program.

Dr. Kendall will eventually transition to become the head of the Alaska region for the Bureau of Ocean Energy Management, one of the new agencies that will replace the former Minerals Management Service on Oct. 1, 2011.

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BOEMRE OKs BHP Billiton's GOM Exploration Plan

- BOEMRE OKs BHP Billiton's GOM Exploration Plan

Tuesday, May 17, 2011
BOEMRE

The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) announced the approval of an Initial Exploration Plan (EP), submitted by BHP Billiton, Inc., for activities in deepwater Gulf of Mexico. The EP was completed in accordance with new safety and environmental standards implemented since the Deepwater Horizon explosion and oil spill, and is the first deepwater Initial EP approved to include the completion of a thorough site-specific Environmental Assessment (SEA).

BHP Billiton's plan includes one proposed deepwater exploration well in approximately 4,468 feet 124 miles offshore Louisiana. An EP describes all exploration activities planned by the operator for a specific lease or leases, including the timing of these activities, information concerning drilling vessels, the location of each planned well, and other relevant information that needs to meet important safety standards.

BOEMRE prepared the SEA to examine BHP Billiton's proposed exploration activities in accordance with the National Environmental Policy Act (NEPA) and the implementation of departmental and bureau regulations.

The SEA included new scientific information that had not been previously available for consideration or analysis. Based on its review, BOEMRE found no evidence that the proposed action would significantly affect the quality of the environment. Therefore, BOEMRE determined that an Environmental Impact Statement (EIS) was not required and issued a Finding of No Significant Impact, which allowed the Initial EP to be approved.

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BOEMRE Calls for Comment on Newfield Revised EP

BOEMRE Calls for Comment on Newfield Revised EP

U.S. Bureau of Ocean Energy Management

The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) on Wednesday announced that public comment is invited with respect to an Environmental Assessment (EA) for a Revised Exploration Plan (EP) submitted by Newfield Exploration Company. This Revised EP involves deepwater activity in the Gulf of Mexico and will be completed in accordance with new safety and environmental standards implemented since the Deepwater Horizon explosion and oil spill.

The Revised EP includes four proposed exploratory wells in approximately 6, 990 feet water depth, approximately 66 miles offshore Louisiana. Consistent with federal regulations, an EP is deemed "submitted" once all supporting materials and documentation has been provided. Once a plan is deemed submitted, BOEMRE has 30 calendar days to analyze and evaluate it. For more information on pending plans, go to: http://www.gomr.boemre.gov/homepg/offshore/safety/well_permits.html.

As part of its review, the bureau will prepare an EA specific to the proposed exploration activities. Upon completion of the technical and environmental review, BOEMRE must decide whether to approve the plan, require modifications, or disapprove the plan. An exploration plan describes all exploration activities planned by the operator for a specific lease or leases, including the timing of these activities, information concerning drilling vessels, the location of each planned well, and other relevant information that needs to meet important safety standards.

The 30-day time frame for review includes a 10-day public comment period to allow an opportunity to review and comment on the issues that should be considered by BOEMRE in preparing the EA for the plan. In an effort to make the comment opportunity more accessible, the public can both view and provide comments on agency documents at: http://www.boemre.gov/PublicComment.htm.

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Murphy Receives BOEMRE Approval for GOM Drilling

Murphy Receives BOEMRE Approval for GOM Drilling

Thursday, April 07, 2011

BOEMRE

The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) approved a deepwater permit for the drilling of a ninth well that complies with rigorous new safety standards implemented in the wake of the Deepwater Horizon explosion and resulting oil spill. This includes satisfying the requirement to demonstrate the capacity to contain a subsea blowout. The approved permit is a revised permit to sidetrack for Murphy Exploration & Production Company Well #A008 in Green Canyon Block 338 in 3,325 feet water depth, approximately 170 miles southwest of New Orleans, Louisiana.

"This permit allows the drilling of the ninth deepwater well since industry demonstrated that it had the capacity to handle subsea blowouts and spills," said BOEMRE Director Michael R. Bromwich. "We will continue to review and approve permits that satisfy our more rigorous safety and environmental standards and that demonstrate the necessary containment capabilities."

Murphy's Well #A008 is a sidetrack well. A sidetrack well is drilled to a new geologic target or a new location within the original target from the existing wellbore. The operator had a rig on location when drilling preparation activities were halted due to the temporary drilling suspensions imposed following the Deepwater Horizon oil spill.

As part of its approval process, the Bureau reviewed Murphy's containment capability available for the specific well proposed in the permit application. Murphy has contracted with the Helix Well Containment Group (HWCG) to use HWCG's capping stack to stop the flow of oil should a blowout occur. The capabilities of the capping stack meet the requirements that are specific to the characteristics of the proposed well.

BOEMRE has worked diligently to help industry adapt to and comply with new, rigorous safety practices. These standards ensure that oil and gas development continues, while also incorporating key lessons learned from the Deepwater Horizon oil spill. This new permit meets the new safety regulations and information requirements in Notices to Lessees N06 and N10, and the Interim Final Safety Rule.

Eni Gets BOEMRE Nod for GOM Drilling

Eni Gets BOEMRE Nod for GOM Drilling

Friday, April 01, 2011
BOEMRE

The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) approved a deepwater permit for the drilling of an eighth well that complies with rigorous new safety standards implemented in the wake of the Deepwater Horizon explosion and resulting oil spill. This includes satisfying the requirement to demonstrate the capacity to contain a subsea blowout. The approved permit is a permit to sidetrack for ENI US Operating Co Inc.'s Well #SS001 in Mississippi Canyon Block 460 in 2,823 ft. water depth, approximately 57 miles southeast of Venice, La.

"This is the eighth deepwater well permitted to drill since February 17, when industry demonstrated that it had the capacity to handle subsea blowouts and spills," said BOEMRE Director Michael R. Bromwich. "The progress in permitting deepwater drilling is directly related to industry's ability to meet and satisfy the enhanced safety requirements associated with deepwater drilling, including the capability to contain a deepwater loss of well control and blowout."

ENI's Well #SS001 is a sidetrack well. A sidetrack well is drilled to a new geologic target or a new location within the original target from the existing wellbore. The operator had a rig on location when drilling preparation activities were halted due to the temporary drilling suspensions imposed following the Deepwater Horizon oil spill.

As part of its approval process, the bureau reviewed ENI's containment capability available for the specific well proposed in the permit application. ENI has contracted with the Helix Well Containment Group (HWCG)to use HWCG's capping stack to stop the flow of oil should a blowout occur. The capabilities of the capping stack meet the requirements that are specific to the characteristics of the proposed well.

BOEMRE has worked diligently to help industry adapt to and comply with new, rigorous safety practices. These standards ensure that oil and gas development continues, while also incorporating key lessons learned from the Deepwater Horizon oil spill. This new permit meets the new safety regulations and information requirements in Notices to Lessees (NTL) N06 and N10, and the Interim Final Safety Rule.

Shell Gets Go-Ahead to Drill in Deepwater GOM

Shell Gets Go-Ahead to Drill in Deepwater GOM

Wednesday, March 30, 2011
BOEMRE

The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) approved a deepwater drilling permit for a new well that was described in Shell's recently approved Exploration Plan. The proposed well was also considered in the Site-Specific Environmental Assessment (SEA) completed as part of the plan review. In order to receive the permit approval, Shell complied with rigorous new safety standards implemented in the wake of the Deepwater Horizon explosion and resulting oil spill. This includes satisfying the requirement to demonstrate the capacity to contain a subsea blowout. The approved permit is a permit to drill a new well for Shell's Well #DC001 in Garden Banks Block 427 in 2,721 ft. water depth, approximately 137 miles off the Louisiana coastline, south of Lafayette.

"Today's permit approval represents a culmination of a broad and comprehensive review process involving an exploration plan, a site-specific environmental assessment, and the application for the drilling permit - all of which complied with our rigorous safety and environmental standards," said BOEMRE Director Michael R. Bromwich. "The completion of this process further demonstrates that we are proceeding as quickly as our resources allow to properly regulate offshore oil and gas operations in the most safe and environmentally-responsible manner."

All offshore wells are identified either an exploration or development plan, which require approval prior to drilling permits being issued. Shell's supplemental Exploration Plan which includes Well #DC001 was approved March 21, 2011 as the first new deepwater exploration plan approved since the Deepwater Horizon explosion and resulting oil spill. As part of the plan's review process, BOEMRE prepared a SEA to examine Shell's proposed exploration activities in accordance with the National Environmental Policy Act and the implementation of departmental and bureau regulations.

As part of the permit approval process, the bureau reviewed Shell's containment capability available for the specific well proposed in the permit application. Shell has contracted with the Marine Well Containment Company to use its capping stack to stop the flow of oil should a well control event occur. The capabilities of the capping stack meet the requirements that are specific to the characteristics of the proposed well.

BOEMRE has worked diligently to help industry adapt to and comply with new, rigorous safety practices. These standards ensure that oil and gas development continues, while also incorporating key lessons learned from the Deepwater Horizon oil spill. This new permit meets the new safety regulations and information requirements in Notices to Lessees N06 and N10, and the Interim Final Safety Rule.

Royal Dutch Shell issued deepwater drilling permit by BOEMRE

Royal Dutch Shell issued deepwater drilling permit by BOEMRE



The Bureau of Ocean Energy Management, Regulation and Enforcement, or BOEMRE, approved a deepwater drilling permit for a new well that was described in Shell Offshore’s recently approved Exploration Plan. In order to receive the permit approval, Shell complied with new safety standards implemented in the wake of the Deepwater Horizon explosion and resulting oil spill, BOEMRE said. The approved permit is a permit to drill a new well for Shell’s Well #DC001 in Garden Banks Block 427 in 2,721 ft. water depth, approximately 137 miles off the Louisiana coastline, south of Lafayette.

Statoil Receives BOEMRE's Sixth GOM Drilling Permit

Statoil Receives BOEMRE's Sixth GOM Drilling Permit

Monday, March 28, 2011
BOEMRE

by  SubseaIQ

 

The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) has approved a sixth deepwater drilling permit that complies with rigorous new safety standards implemented in the wake of the Deepwater Horizon explosion and resulting oil spill.

This includes satisfying the requirement to demonstrate the capacity to contain a subsea blowout. The approved permit is a revised permit to drill a new well for Statoil Gulf of Mexico LLC's Well #1 in Alaminos Canyon Block 810 in 7,134 ft. water depth, approximately 216 miles off the Texas coastline, south of Texas City.

"This permit is the sixth we have approved since February 17, when industry demonstrated that it had the capacity to handle subsea blowouts and spills. Some say we are now proceeding too quickly; some say we are still proceeding too slowly. The truth is, we are proceeding as quickly as our resources allow to approve permit applications that satisfy our rigorous safety and environmental standards," said BOEMRE Director Michael R. Bromwich. "We will continue to do so."

Statoil's Well #1 is a new well. The operator had a rig under contract and an approved Permit to Drill a New Well when activities were suspended due to the temporary drilling suspensions imposed following the Deepwater Horizon oil spill.

As part of its approval process, the bureau reviewed Statoil's containment capability available for the specific well proposed in the permit application. Statoil has contracted with the Helix Well Containment Group to use its capping stack to stop the flow of oil should a well control event occur. The capabilities of the capping stack meet the requirements that are specific to the characteristics of the proposed well.

BOEMRE has worked diligently to help industry adapt to and comply with new, rigorous safety practices. These standards ensure that oil and gas development continues, while also incorporating key lessons learned from the Deepwater Horizon oil spill. This new permit meets the new safety regulations and information requirements in Notices to Lessees (NTL) N06 and N10, and the Interim Final Safety Rule.