BOEM broadens reach to include offshore contractors

HOUSTON – The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM) announced recently that it would begin to exercise regulatory authority over offshore contractors as well as operators.

Appearing before a standing room only crowd at the Offshore Technology Conference held last week in Houston, BOEM Director Michael Bromwich, discussed the new initiative. “It has struck me as inappropriate to limit our authority to operators if in fact we had legal authority that reached more broadly to the activities of all entities involved in developing offshore leases,” Bromwich said in his prepared remarks. “We have completed our review of the issue and have concluded that in fact we have broad legal authority over all activities relating to offshore leases, whether it engaged in by lessees, operators, or contractors.

“We can exercise such authority as we deem appropriate,” continued Bromwich. “We will be careful and measured in extending our regulatory authority to contractors.”

Bromwich added that BOEM is in the process of developing improvements to the permitting process and will be issuing recommended procedures for submitting Applications for Permit to Drill (APD). Bromwich said the recommended procedures, which will be designed to assist operators in complying with the agency’s new regulations, could be adopted by operators on a voluntary basis. The procedures will assist BOEM staff in processing APDs more rapidly, he said.

One reason for the big crowd at his presentation was the topic and speaker, but also because this year’s OTC broke a 29-year attendance record. Official attendance was 78,150, an 8 percent increase over 2010 when 72,025 people registered for the event. The sold-out exhibition was the largest since 1982 with 603,000 sq. ft. of exhibit space, up from 568,000 sq. ft. in 2010. The event had 2,520 exhibiting companies from 40 countries, including 306 new exhibitors.

The general mood this year at OTC was upbeat compared with last year’s conference, held only weeks after the Macondo blowout in the Gulf of Mexico. Oil prices during OTC week were above $100 bbl., which also added to the upbeat mood.

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