U.S. Offshore Industry Steps Up Transparency Call
Maritime Executive, Nov. 7, 2016
Four U.S. industry trade groups have submitted Freedom of Information Act (FOIA) requests to both the Bureau of Ocean Energy Management (BOEM) and the Department of the Interior (DOI) seeking information related to the recent “drastic” changes to the financial assurances and bonding required of offshore oil and gas producers.
BOEM enacted a modified user pay scheme in July to ensure that U.S. taxpayers never have to pay for offshore oil and gas platform decommissioning. All outer continental shelf leases require that decommissioning companies must remove all facilities and restore the site to its pre-lease state. However, due in part to the industry’s move into deepwater areas in the Gulf of Mexico, decommissioning costs have risen significantly, says BOEM. Moreover, as existing infrastructure ages, larger companies are transferring older facilities to smaller or less experienced companies.
Current estimated routine decommissioning liabilities in the outer continental shelf are approximately $40 billion.
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