A final regulation by the federal Bureau of Safety and Environmental Enforcement doubles to one year the time offshore oil and gas operators will have to coordinate development operations and retain their leases in federal waters of the U.S. Outer Continental Shelf.
“This rulemaking extends the time from 180 days to one year between production, drilling or well-reworking operations on a lease,” said BSEE Director Scott Angelle. “These additional months mean companies doing business on the Outer Continental Shelf will have more planning flexibility, which will help them be more cost efficient, create more jobs and maximize the economic benefit for the entire nation.”
The change was mandated by Congress with the Consolidated Appropriations Act of 2017 that became law in March. BSEE set to amending its regulations in response, and a notice of the final rule, titled Oil and Gas and Sulphur Operations on the Outer Continental Shelf — Lease Continuation Through Operations, was published in the June 9 issue of the Federal Register.
“The extension of time also affects related BSEE guidance documents, such as NTL No. 2008-N09, and unitization agreements that follow a BSEE-approved model,” the bureau said in announcing the rule adoption.” BSEE plans to revise the relevant notices to reflect the extension of the 180-day requirement to one year, and encourages parties with existing unit agreements to consider revising those agreements to reflect the change.”
The lease time extension comes as Trump administration officials promised sweeping reform and streamlining of permit processes, to expedite new transportation and energy infrastructure projects. At the Department of Transportation in Washington, D.C. Friday, DOT Secretary Elaine Chao and Secretary of the Interior Ryan Zinke appeared with President Trump to talk about permit reform.
“It’s a new Interior, we want to be a partner…we are about to embark on one of the largest reorganizations in department history,” said Zinke, whose agency is also looking to revamp how it manages offshore energy. “We’re going to change that because America wants action.”