Sequester to slow U.S. Gulf?

On May 3, the California State Office of the Bureau of Land Management, part of the U.S. Department of Interior, posted a notice that said BLM had postponed California’s oil and gas lease sale.

The notice said that “due to budget constraints resulting from the sequester and an emphasis on the higher priorities for conducting inspection and enforcement on existing leases and processing new applications for permit to drill, the California State Office of the Bureau of Land Management has postponed all oil and gas lease sales in California for the remainder of fiscal year 2013” which ends Sept. 30.

What does this have to do with workboat operations in the U.S. Gulf of Mexico? Plenty, as it turns out, since federal budget cuts for oil and gas expenditures in the U.S. hit all federal leases, including those in the Gulf of Mexico. Many feel that the effect of the sequester on the Gulf will be a perceptible drop in activity.

The advent of the sequester led the Interior Department to announce on March 27 that agency budget cuts resulting from sequestration would likely “delay the processing of applications for oil and gas exploration permits.” 

For offshore drilling and leasing, the Interior Department said that efforts to expedite the processing of offshore oil and gas permits in the Gulf would be thwarted by delays, putting at risk some of the 550 exploration plans or development coordination documents that the Bureau of Ocean Energy Management must review. 

At risk are 300 to 400 drilling permits and some 150 leases. While the short-term effects of sequestration in the Gulf of Mexico may be less noticeable, the mid- to long-term impact could result in less work, or lower rates, for all equipment, including workboats.

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