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Obama’s Agency Readies Guidance for Offshore Drilling

The Obama administration this week plans to offer companies guidance for offshore drilling, the head of the agency in charge of approving permits said in response to mounting frustration from the industry.

Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement, said today at an industry conference in New Orleans that it’s up to companies to complete applications for working in the deep waters of the Gulf of Mexico.

Drilling has languished almost two months after President Barack Obama lifted a moratorium imposed after BP Plc’s Macondo oil well exploded on April 20 because companies are unable to meet new standards, Lee Ahlstrom, vice president of investor relations at Noble Corp., said today in New York.

“It feels a little bit like we’re caught in the middle of a Peanuts strip, and we’re Charlie Brown,” Ahlstrom said at an investor conference. He compared Bromwich’s bureau to comic-strip character Lucy van Pelt, who holds a football for Charlie, then yanks it away as he gets ready to kick. “Every time we get close to being able to” meet the standards, “something else dribbles out.”

Noble, the world’s second-largest offshore drilling contractor by number of rigs, said the Gulf accounts for 46 percent of its $14 billion drilling backlog. Eight of Noble’s 69 rigs in the Gulf and have been mostly idled by the moratorium, said John Breed, a spokesman for the Geneva-based company.

Won’t ‘Cut Corners’

The Washington-based agency, part of the Interior Department, won’t “cut corners” when approving drilling permits, Bromwich said. It will provide information on the requirements for safety, subsea containment, blowout-preventer testing and oil-spill response plans, Bromwich said today at an industry conference in New Orleans.

Bromwich declined to estimate how much time it will take operators to file for new permits under additional regulations explained in the expected guidance.

“I don’t have insights into where they are in their plan-development process,” he said. “I don’t know, when we give them this guidance, they will be able to, in effect, dot the ‘I’ and cross the ‘T’ and submit it, or whether instead, they are in a much earlier stage in the process and they will have to do a significant amount of additional work.”

BP, Transocean Ltd. and Halliburton Co., three “leading players” in the oil industry, made preventable and “breathtakingly inept” mistakes that led to the Macondo well blast, killing 11 people and setting off the biggest U.S. offshore spill, William K. Reilly, co-chairman of a panel investigating the disaster, said today.

“There has been some arrogance as well as some complacency” in the energy industry, Bromwich told .

The explosion led to suspension of drilling at 33 rigs in Gulf of Mexico deep waters and slowed permitting in waters less than 500 feet (152 meters) deep.

London-based BP owned the Macondo well. Transocean owned the rig that exploded. Halliburton supplied cement to plug the well.

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