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Ensco, U.S. Settle Suit Over Deep-Water Drilling Permits

Ensco Offshore Co. and the U.S. Justice Department settled a lawsuit claiming federal regulators intentionally delayed deep-water drilling after lifting a moratorium.

U.S. regulators halted all drilling in waters deeper than 500 feet in May 2010 following the explosion and sinking of the Deepwater Horizon rig off the Louisiana coast. After offshore companies and regional leaders sued, U.S. District Judge Martin Feldman in New Orleans threw out the ban as overly broad and punitive to the Gulf Coast economy.

Interior Secretary Kenneth Salazar imposed a second ban in July and Ensco, a unit of London-based Ensco Plc, sued. Ensco pursued the suit even after the U.S. lifted the second moratorium, contending that regulators continued to halt deep-water drilling and delayed six of the company’s permit applications.

“Under the terms of the parties’ now-executed settlement agreement, defendants are to act on those of the six permit applications that are presently before the defendants no later than July 8, 2011,” lawyers for Ensco and the Justice Department said in a court filing today.

The government and Ensco also filed a proposed order requiring the U.S. to submit a report to Feldman on the status of the permits by June 20.

Wyn Hornbuckle, a Justice Department spokesman, declined to comment. Sean O’Neill, an Ensco spokesman, didn’t immediately return a call and e-mail seeking comment.

The case is Ensco Offshore Co. v. Salazar, 2:10-cv-01941, U.S. District Court, Eastern District of Louisiana (New Orleans).

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