Environmental Reviews May Be Dropped on Halted Wells

Drilling regulators may not conduct new environmental reviews for 13 companies that were forced by the U.S. to suspend work on deep-water oil wells after BP Plc’s Gulf of Mexico spill.

The policy change will cover work on 16 wells in the Gulf, the Bureau of Ocean Energy Management, Regulation and Enforcement, previously called the Minerals Management Service, said today in an e-mailed statement. The companies must still meet other safeguards put in place in response to the BP spill.

“As we move forward, we are taking into account the special circumstances of those companies whose operations were interrupted by the moratorium and ensuring that they are able to resume previously approved activities,” Michael Bromwich, bureau director, said in a statement.

Deep-water exploratory drilling was halted after the April 20 blowout of BP’s Macondo well killed 11 workers, injured 17, destroyed Transocean Ltd.’s $365 million Deepwater Horizon rig and spewed crude for 87 days. The five-month suspension, which ended Oct. 12, freed rigs to assist BP’s efforts to stop the worst U.S. offshore spill and let regulators reassess oversight of wells.

The 13 companies won’t be required to revise their exploration plans if an updated estimate of the most oil that would be released in an uncontrolled spill is less than the amount included in spill-response plans on file with the bureau. If the worst-case discharge estimate is higher, “further reviews will be conducted,” according to the statement.

13 Companies

The companies that received today’s notice are: ATP Oil & Gas Corp. BHP Billiton Ltd., Chevron Corp., Cobalt International Energy Inc., Eni SpA, Hess Corp., Kerr-McGee Corp., Marathon Oil Corp., Murphy Oil Corp., Noble Energy Inc., Royal Dutch Shell Plc, Statoil ASA and Walter Oil & Gas Corp., the agency said.

All deep-water oil exploration companies in the Gulf must meet new requirements for designing wells and ensuring safety following BP’s spill. Drilling applications are required to show backup power sources for the blowout preventers that sit atop wellheads on the sea floor, estimate how long it would take to drill a relief well in the event of a Macondo-like disaster and assess potential environmental damage when a well blows out.

The National Ocean Industries Association, a Washington-based group that represents companies in the offshore energy industry, has said efforts to resume drilling are being stymied by changing requirements. Almost three months after Interior Secretary Ken Salazar ended a moratorium on drilling in seas deeper than 500 feet (152 meters), regulators have yet to issue any permits for exploration.

‘Environmental Assessment’

“This is a positive development for an industry that has been anxiously waiting to get back to work,” Randall Luthi, president of the ocean industries group, said in a statement. “There continue to be questions about implementation and further clarification is needed” on new safety requirements.

Companies seeking approval for new wells also must submit exploration plans that include a calculation of the most oil that might spill from an uncontrolled blowout. Regulators will then conduct an “environmental assessment” to determine whether those plans meet new standards.

That review may be waived for the 13 companies working under previously approved exploration plans.

“For those companies that were in the midst of operations at the time of the deep-water suspensions, today’s notification is a significant step toward resuming their permitted activity,” Bromwich said.

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