Regulatory

BOEM Publishes Final Notice of Sale for June Cook Inlet Lease Sale

3Sale 244 CI244 FNOS STIPSThe Bureau of Ocean Energy Management (BOEM) has announced it will offer approximately 1.09 million acres off Alaska’s southcentral coast in a lease sale scheduled for June 21.

Cook Inlet Oil & Gas Lease Sale 244 will offer 224 blocks toward the northern part of the federal Cook Inlet Planning Area for leasing. The blocks stretch roughly from Kalgin Island in the north to Augustine Island in the south.

“We conducted a robust environmental analysis and look forward to holding Alaska’s first OCS lease sale since 2008,” said Dr. Walter Cruickshank, BOEM’s acting director. “The areas offered for leasing represent a careful balance between jobs, energy development, and natural resource protection.”

The Final Notice of Sale (FNOS) and a copy of the Record of Decision (ROD) affirming the sale are available now here. The FNOS and a Notice of Availability for the ROD will be posted tomorrow (Friday, May 19) in the Federal Register Reading Room, and published on Monday, May 22, in the Federal Register.

The lease sale will be entirely webcast via a link here. The live stream may be accessed beginning at 9 a.m. Alaska Time. From 9 a.m. to 10 a.m. viewers will see a stand-by notice; the bid reading will begin at 10 a.m. Livestreaming a lease sale enables BOEM to deliver pertinent bid information immediately to a broad national and international audiences, making it unnecessary to attend the lease sale in person.

The lease sale is the thirteenth and final OCS lease sale under the Outer Continental Shelf Oil and Gas Leasing Program for 2012-2017 (Five-Year Program). Together, these lease sales have netted more than $3 billion for American taxpayers.

In December 2016, BOEM published a Final Environmental Impact Statement relating to the lease sale. The EIS analyzed the important environmental resources and uses (e.g., sea otter and beluga whale populations; subsistence activities; commercial fishing of pacific salmon and halibut; and more) that currently exist within the Cook Inlet Planning Area and identified robust mitigation measures to be considered in leasing the area. Mitigation measures identified in the Final Notice of Sale would protect sea otter, beluga whales, and subsistence, recreational and commercial fisheries.

The lease sale terms include stipulations to protect biologically sensitive resources, mitigate potential adverse effects on protected species, and avoid potential conflicts associated with oil and gas development in the region. BOEM’s proposed economic terms are designed to encourage diligent development and ensure a fair return to taxpayers. A full list of terms and conditions are in the Final Notice of Sale.

For more information, including a map of the lease sale area and a timeline of the leasing process, click here.

Former Louisiana State Official Scott A. Angelle Named as Director of the Bureau of Safety and Environmental Enforcement

5BSEE angelle headshotFormer Louisiana state official Scott A. Angelle will head-up the Bureau of Safety and Environmental Enforcement. As part of the Department of the Interior, BSEE fosters safe and responsible energy production on the U.S. Outer Continental Shelf through regulatory oversight of oil and gas operations. Angelle, who most recently served as Vice Chairman of the Louisiana Public Service Commission, will assume his new position May 23.

“Scott Angelle brings a wealth of experience to BSEE, having spent many years working for the safe and efficient energy production of both Louisiana’s and our country’s offshore resources,” Secretary of the Interior Ryan Zinke said. “As we set our path towards energy dominance, I am confident that Scott has the expertise, vision, and the leadership necessary to effectively enhance our program, and to promote the safe and environmentally responsible exploration, development, and production of our country’s offshore oil and gas resources.”

Angelle, who will serve as the fourth director in BSEE’s history, has held numerous positions in Louisiana State and Parish governments, including Interim Lieutenant Governor, Secretary of the Louisiana Department of Natural Resources, and St. Martin Parish President. In the aftermath of the BP oil spill, Angelle served at the request of then Louisiana Governor Bobby Jindal as liaison to the federal government, and negotiated an early end of the previous administration’s drilling moratorium.

“I welcome the opportunity to serve President Trump and Secretary Zinke, and work with BSEE staff to meet the critical goal of energy dominance for our country,” said Angelle. “It is an exciting and challenging time for BSEE; I look forward to leading our efforts to empower the offshore oil and gas industry while ensuring safe and environmentally responsible operations.”

Angelle served for eight years as Louisiana’s Secretary of the Department of Natural Resources. Under his leadership, the state’s coastal permitting system was reformed, providing for efficient permitting while increasing drilling rig counts in Louisiana by more than 150 percent during his tenure. Angelle has also served as Chairman of the Louisiana State Mineral Board, and as a member of the Louisiana State University Board of Supervisors, Southern States Energy Board, and the Louisiana Coastal Port Advisory Authority.

Angelle is a native of Breaux Bridge, Louisiana, and a cum laude graduate of the University of Louisiana at Lafayette with a Bachelor of Science degree in Petroleum Land Management. He and his wife Dianne are the proud parents of five children and four grandchildren.

Established in 2011, BSEE fosters secure and reliable energy production through a program of efficient permitting, appropriate regulations, compliance monitoring and enforcement, inspections, technical assessments, and incident investigations. The position of BSEE Director is not Senate-confirmed.

GoM Lease Sale Yields $275 Million in High Bids

 1Central Gulf of Mexico Program AreaU.S. Secretary of the Interior Ryan Zinke has announced that Lease Sale 247 for oil and gas parcels in the Gulf of Mexico garnered $274,797,434 in high bids for 163 tracts covering 913,542 acres in the Central Planning Area of the Outer Continental Shelf offshore Louisiana, Mississippi, and Alabama. A total of 28 offshore energy companies submitted 189 bids. The sum of all bids received totaled $315,303,884.

“Today’s strong sale reflects continued industry optimism and interest in the Gulf’s Outer Continental Shelf, a keystone of the Nation’s offshore oil and gas resources and a vital part of President Trump’s plan to make the United States energy independent,” Secretary Zinke said. “In cooperation with the Gulf offshore industry, we are committed to responsible energy development that spurs economic opportunities, generates jobs for American workers, and produces revenues for local, state, and federal partners. Expanded Gulf production is critical to America’s economic and energy security, and will play a greater role as we move to break our dependence on foreign oil and strengthen the Nation’s energy independence.”

Today’s lease sale, which included all unleased and non-protected areas in the Central Gulf of Mexico Planning Area, is the final to be held in the Gulf of Mexico under the current Outer Continental Shelf Oil and Gas Leasing Program for 2012-2017 (Five Year Program). The Five Year Program makes available all offshore areas with the highest resource potential. The first eleven sales in the Five Year Program offered nearly 73 million acres for development and garnered more than $3 billion in bid revenues.

The Department’s Bureau of Ocean Energy Management (BOEM) offered 9,118 unleased blocks, covering 48 million acres, located from three to 230 nautical miles offshore Louisiana, Mississippi, and Alabama, in water depths ranging from nine to more than 11,115 feet (three to 3,400 meters).

“The Gulf of Mexico is one of the most productive oil and gas basins in the world, and its mature offshore and onshore infrastructure supports safe and responsible development of our domestic energy resources,” Secretary Zinke said.

BOEM estimates the lease sale could result in the production of 460 to 890 million barrels of oil, and 1.9 trillion cubic feet to 3.9 trillion cubic feet of natural gas. The sale terms include stipulations to protect biologically sensitive resources, mitigate potential adverse effects on protected species, and avoid potential conflicts associated with oil and gas development in the region. BOEM’s economic terms include a range of incentives to encourage diligent development and ensure a fair return to taxpayers.

The broadcast of the bid reading via the internet livestreaming allowed bid information to reach a much broader audience and eliminated the need for the public to physically attend the bid reading.

Following today’s sales, each bid will go through a 90-day evaluation process to ensure the public receives fair market value before a lease is awarded. Lease awards will be posted to BOEM’s website as they are completed. A Note to Stakeholders will announce final sales statistics and bids rejected upon completion of evaluations. All materials and statistics for Lease Sale 247 are available.

As of March 1, 2017, about 16.9 million acres on the U.S. OCS are under lease for oil and gas development (3,194 active leases) and 4.6 million of those acres (929 leases) are producing oil and natural gas. More than 97 percent of the leases are in the Gulf of Mexico; about 3 percent are on the OCS off California and Alaska.

Secretary Zinke Announces Proposed 73-Million Acre Oil and Natural Gas Lease Sale for Gulf of Mexico

1OilrigsKevinAll available areas in federal waters will be offered in first region-wide sale under new Five Year

U.S. Secretary of the Interior Ryan Zinke has announced that the Department will offer 73 million acres offshore Texas, Louisiana, Mississippi, Alabama, and Florida for oil and gas exploration and development. The proposed region-wide lease sale scheduled for August 16, 2017 would include all available unleased areas in federal waters of the Gulf of Mexico.

“Opening more federal lands and waters to oil and gas drilling is a pillar of President Trump’s plan to make the United States energy independent,” Secretary Zinke said. “The Gulf is a vital part of that strategy to spur economic opportunities for industry, states, and local communities, to create jobs and home-grown energy and to reduce our dependence on foreign oil.”

Proposed Lease Sale 249, scheduled to be livestreamed from New Orleans, will be the first offshore sale under the new Outer Continental Shelf Oil and Gas Leasing Program for 2017-2022 (Five Year Program). Under this new program, ten region-wide lease sales are scheduled for the Gulf, where the resource potential and industry interest are high, and oil and gas infrastructure is well established. Two Gulf lease sales will be held each year and include all available blocks in the combined Western, Central, and Eastern Gulf of Mexico Planning Areas.

The estimated amount of resources projected to be developed as a result of the proposed region-wide lease sale ranges from 0.211 to 1.118 billion barrels of oil and from 0.547 to 4.424 trillion cubic feet of gas. The sale could potentially result in 1.2 to 4.2 percent of the forecasted cumulative OCS oil and gas activity in the Gulf of Mexico. Most of the activity (up to 83% of future production) of the proposed lease sale is expected to occur in the Central Planning Area.

Lease Sale 249 will include about 13,725 unleased blocks, located from three to 230 miles offshore, in the Gulf’s Western, Central, and Eastern planning areas in water depths ranging from nine to more than 11,115 feet (three to 3,400 meters). Excluded from the lease sale are blocks subject to the Congressional moratorium established by the Gulf of Mexico Energy Security Act of 2006; blocks that are adjacent to or beyond the U.S. Exclusive Economic Zone in the area known as the northern portion of the Eastern Gap; and whole blocks and partial blocks within the current boundary of the Flower Garden Banks National Marine Sanctuary.

“To promote responsible domestic energy production, the proposed terms of this sale have been carefully developed through extensive environmental analysis, public comment, and consideration of the best scientific information available,” said Walter Cruickshank, the acting director of Interior’s Bureau of Ocean Energy Management (BOEM). “This will ensure both orderly resource development and protection of the environment.”

The lease sale terms include stipulations to protect biologically sensitive resources, mitigate potential adverse effects on protected species, and avoid potential conflicts associated with oil and gas development in the region. BOEM’s proposed economic terms include a range of incentives to encourage diligent development and ensure a fair return to taxpayers. The terms and conditions for Sale 249 in the Proposed Notice of Sale are not final. Different terms and conditions may be employed in the Final Notice of Sale, which will be published at least 30 days before the sale.

BOEM estimates that the U.S. Outer Continental Shelf (OCS) contains about 90 billion barrels of undiscovered technically recoverable oil and 327 trillion cubic feet of undiscovered technically recoverable gas. The Gulf of Mexico OCS, covering about 160 million acres, has technically recoverable resources of 48.46 billion barrels of oil and 141.76 trillion cubic feet of gas.

Production from all OCS leases provided 550 million barrels of oil and 1.25 trillion cubic feet of natural gas in FY2016, accounting for 72 percent of the oil and 27 percent of the natural gas produced on federal lands. Energy production and development of new projects on the U.S. OCS supported an estimated 492,000 direct, indirect, and induced jobs in FY2015 and generated $5.1 billion in total revenue that was distributed to the Federal Treasury, state governments, Land and Water Conservation Fund, and Historic Preservation Fund.

As of March 1, 2017, about 16.9 million acres on the U.S. OCS are under lease for oil and gas development (3,194 active leases) and 4.6 million of those acres (929 leases) are producing oil and natural gas. More than 97 percent of these leases are in the Gulf of Mexico; about 3 percent are on the OCS off California and Alaska.

The current Five Year Program [2012-2017] has one final Gulf lease sale scheduled on March 22, 2017 for Central Planning Area Sale 247. The 2012-2017 Five Year Program has offered about 73 million acres, netted more than $3 billion in high bids for American taxpayers and awarded more than 2,000 leases.

All terms and conditions for Gulf of Mexico Region-wide Sale 249 are detailed in the Proposed Notice of Sale (PNOS) information package, which is available here. Copies of the PNOS maps can be requested from the Gulf of Mexico Region’s Public Information Unit at 1201 Elmwood Park Boulevard, New Orleans, LA 70123, or at 800-200-GULF (4853).

The Notice of Availability of the PNOS will be available today for inspection in the Federal Register here and will be published in the March 7, 2017 Federal Register.

BOEM Plans to Offer 1.09 Million Acres in Cook Inlet Lease Sale

2BOEM Alaska Program AreasThe Bureau of Ocean Energy Management (BOEM) has announced it plans to offer approximately 1.09 million acres in Cook Inlet off Alaska’s southcentral coast in a proposed lease sale this year.

Cook Inlet Oil & Gas Lease Sale 244, scheduled to take place in June 2017, would offer 224 blocks toward the northern part of the Cook Inlet Planning Area for leasing. The blocks stretch roughly from Kalgin Island in the north to Augustine Island in the south.

“Following a robust environmental analysis, we are moving forward with the Lease Sale 244 process,” said Walter Cruickshank, BOEM’s acting director. “We look forward to hearing Governor Walker’s comments and recommendations as we continue to balance environmental considerations with careful development.”

The Proposed Notice of Sale is available now. A Notice of Availability will be published Monday, Feb. 27 in the Federal Register Reading Room, and on Tuesday, Feb. 28 in the Federal Register itself. BOEM has notified Alaska Governor Bill Walker of this announcement, and as required by law will mail him a copy of the Proposed Notice of Sale to arrive coincident with the Feb. 28 Federal Register Notice of Availability. This will initiate a governor’s 60-day review and comment period.

This sale would be the final one in the Department of the Interior’s 2012-2017 OCS Oil & Gas Leasing Program, which proposes one lease sale (OCS Oil & Gas Lease Sale 244) in Cook Inlet in June 2017. Publication of this notice does not mean the final decision has been made to hold the lease sale.

The next step in the leasing process is the publication of the Final Notice of Sale. Per BOEM’s regulations, this must be done at least 30 days prior to the date of the sale.

The Proposed Notice of Sale follows the Dec. 22, 2016, publication of an Environmental Impact Statement relating to the proposed sale. The EIS analyzed the important environmental resources and uses (e.g., sea otter and beluga whale populations; subsistence activities; commercial fishing of pacific salmon and halibut; and more) that currently exist within the Cook Inlet Planning Area and identified robust mitigation measures to be considered in leasing the area. Mitigation measures identified in the proposed notice would protect sea otter, beluga whale and commercial fisheries.

For more information, including a map of the proposed lease sale area and a timeline of the leasing process, click here.

BOEM Extends the Implementation Timeline for NTL 2016-01 by Six Months

After months of careful consideration and industry engagement, in July 2016, the Bureau of Ocean Energy Management (BOEM) issued Notice to Lessees (NTL) 2016-N01, with a 60-day grace period before implementation on September 12th, 2016. In this guidance document the agency detailed improved procedures to determine a lessee’s ability to carry out its lease obligations - primarily the decommissioning of Outer Continental Shelf (OCS) facilities – and to make informed decisions about whether lessees should furnish additional security.

7BOEM Platform Houchin at sunsetPlatform Houchin at sunset. Photo courtesy: BOEM

BOEM has continued to engage with industry since the issuance and subsequent implementation of the NTL. BOEM conducted presentations on the NTL at two industry trade group forums in August 2016. In October 2016, BOEM sent out proposal letters covering all decommissioning liability and allowing offshore companies to analyze and respond to their proposed assessments. During the fall, BOEM determined the amount of self-insurance for those companies that requested the ability to use self-insurance. BOEM has also been working with companies on an individual basis.

Most recently in December 2016, BOEM issued Orders to Provide Additional Security for sole liability properties. Sole liability properties are leases, rights-of-way, or rights of use and easements for which the holder is the only liable party, i.e., there are no co-lessees, operating rights owners and/or other grant holders, and no prior interest holders liable to meet the lease and/or grant obligations. This most recent action reflects BOEM’s continued assessment that sole liability properties represent the greatest programmatic risk to the American taxpayer.

Additionally, through BOEM’s continued engagement with industry, it has become apparent that navigating the multi-party business relationships that exist between co-lessees and predecessors-in-interest can prove challenging and time-consuming. Further, because the non-sole liability properties may include several co-lessees and prior interest owners, their existing financial arrangement may require assessing the extent to which these existing financial arrangements can be considered in determining whether BOEM needs additional security.

Therefore, in order to provide BOEM and industry the opportunity to focus on providing additional security for sole liability properties, and to allow an opportunity for additional time and conversation, including with interested stakeholders, regarding issues that arise in the context of non-sole liability properties, BOEM will extend the implementation timeline for NTL 2016-01 by an additional six months as to leases, rights-of-way and rights of use and easement for which there are co-lessees and/or predecessors in interest, except in circumstances in which BOEM determines there is a substantial risk of nonperformance of the interest holder’s decommissioning liabilities. Interest holders of non-sole liability properties are encouraged, however, to propose and negotiate tailored plans during this period.

BOEM will continue its interactive process to gather additional input from all interested parties. The goal is to ensure industry’s continued engagement in developing and implementing a risk management program that enables industry to meet its legal obligations and protects the American taxpayers from shouldering any liability for decommissioning the existing or future facilities on the OCS, while recognizing the industry’s current economic realities and concerns.

More information about the NTL can be found here.

Withdrawal of Atlantic and Arctic Ocean Areas from Future Oil and Gas Leasing

U.S. Secretary of the Interior Sally Jewell applauded President Obama’s announcement that he is withdrawing offshore areas in the Atlantic and Arctic Oceans from future mineral extraction to protect these ecologically sensitive marine environments from the impacts of any future oil and gas exploration and development.

2arctic ocean clouds patrick kelley uscgPhoto credit: Patrick Kelley, USCG

The withdrawal does not restrict other uses of these federal waters on the Outer Continental Shelf, and will help to sustain commercial and recreational fisheries in the Atlantic to support fishing-dependent communities, as well as the harvest of marine resources on which many Alaska Native communities rely for subsistence use and cultural traditions.

“The President’s bold action recognizes the vulnerable marine environments in the Arctic and Atlantic oceans, their critical and irreplaceable ecological value, as well as the unique role that commercial fishing and subsistence use plays in the regions’ economies and cultures,” Secretary Jewell said. “The withdrawal will help build the resilience of these vital ecosystems, provide refuges for at-risk species, sustain commercial fisheries and subsistence traditions, and create natural laboratories for scientists to monitor and explore the impacts of climate change.”

The withdrawal areas announced encompass 3.8 million acres in the north and mid-Atlantic Ocean off the East Coast and 115 million acres in the U.S. Arctic Ocean. Including previous presidential withdrawals, today’s action protects nearly 125 million acres in the offshore Arctic from future oil and gas activity.

In the Atlantic, the withdrawal decision protects 31 canyons, extending from Heezen Canyon offshore New England to Norfolk Canyon offshore of the Chesapeake Bay. The largest, Hudson Canyon, reaches depths greater than 10,000 feet, comparable in scale to the Grand Canyon, which is 6,093 feet at its deepest. The canyons are regions of enhanced biodiversity, home to numerous species including deep-water corals, deep-diving beaked whales, commercially valuable fish, and significant numbers of habitat-forming soft and hard corals, sponges and crabs.

The canyon region is home to several fish stocks managed as Highly Migratory Species, including commercially valuable marlin, sailfish, swordfish, tuna and sharks. These geologic features also provide important habitat for a number of protected species including beaked, sperm and sei whales, many of which show an affinity to canyon ecosystems as compared to other Atlantic waters.

The President’s action will preserve critical ecological hot spots, helping to protect habitats important to Atlantic fisheries. The designation also affords long-term opportunity for research and exploration, and helps ensure that species dependent on the canyon habitats are protected. It also builds on protections established by the recent creation of the Frank R. Lautenberg Deep Sea Coral Protection Area. This protected region, created by the Mid-Atlantic Regional Fishery Management Council and approved by NOAA, prohibits bottom trawling in all the canyons in the region.

In addition to numerous requests from local and regional officials to protect these offshore resources, 145 prominent marine scientists issued a public letter in September 2015, voicing their conclusion that the threats to the unique marine environment in this region warranted permanent protection to preserve intact ecosystems. These concerns are informed by a number of research findings, including a National Oceanic and Atmospheric Administration study that found ocean temperatures in the Northeast U.S. Shelf are projected to warm three times faster than the global average and a climate vulnerability assessment on fish and invertebrate species in the region that concluded warming oceans due to climate change threaten the majority of fish species in the area, including salmon, lobster, and scallops. The President’s action builds on his establishment of the Northeast Canyons and Seamounts Marine National Monument, which protects 4,913 square miles of marine ecosystems located 130 miles southeast of Cape Cod. The withdrawal protects major Atlantic canyons that are not in the National Monument.

The President’s Arctic withdrawal, which encompasses the entire U.S. Chukchi Sea and significant portions of the U.S. Beaufort Sea, will provide critical protection for these vibrant and fragile offshore ecosystems, which are home to marine mammals and other important ecological resources and marine species on which many Alaska Native communities rely for subsistence and cultural traditions. These include several species of seals; Pacific walrus; polar bears; more than 98 fish species; a number of whale species, such as the bowhead, gray and beluga; many bird species, including waterfowl such as eiders, long-tailed duck and geese; and shorebirds such as the red-necked phalarope.

“Risks associated with oil and gas activity in the remote, harsh and undeveloped Arctic are not worth taking when the nation has ample energy sources near existing infrastructure,” said Abigail Ross Hopper, the Director of Interior’s Bureau of Ocean Energy Management. “Oil spill response and clean-up raises unique challenges in the Arctic and a spill could have substantial impacts on the region, particularly given the ecosystem fragility and limited available resources to respond to a spill.”

The withdrawal does not affect existing leases in these federal offshore waters and would not affect a nearshore area of the Beaufort Sea, totaling about 2.8 million acres, that has high oil and gas potential and is adjacent to existing state oil and gas activity and infrastructure. While there are significant concerns about oil and gas activity occurring in this area, it will be subject to additional evaluation and study to determine if new leasing could be appropriate at some point in the future. Interior’s five year offshore leasing program for 2017-2022 does not include lease sales in this area or in the withdrawn areas.

The U.S. Arctic Ocean is characterized by harsh environmental conditions, geographic remoteness, and a relative lack of fixed infrastructure and existing oil and gas operations. Despite the substantial steps this Administration has taken to improve the safety of potential Arctic exploration, there would still be significant risks associated with offshore drilling operations and the consequences of an oil spill in this region could be substantially detrimental to the ecosystem.

Climate change-induced temperature increases are occurring fastest in Polar Regions, including the U. S. Arctic, resulting in a disproportionate amount of changes to the Arctic environments, including reduction in seasonal ice cover. Loss of sea ice coverage reduces the available habitat for ice-dependent species such as seals, polar bears, and Pacific walrus. Such conditions and stressors may increase the vulnerability of these species and habitat and reduce their resilience to impacts of oil and gas activities. The Arctic withdrawals build on past actions the President has taken to protect fragile ecosystems and build resilience in the face of climate change, including the Northern Bering Sea Climate Resilience Area; Chukchi and Beaufort Seas areas placed off limits to oil and gas leasing earlier this year; and the Bristol Bay withdrawal in 2014.

Further scientific analysis related to the President’s withdrawal proclamation is available here for the Arctic and here for the Atlantic.

Maps of the areas related to President’s withdrawal proclamation are available here for the Arctic and here for the Atlantic.

BOEM Completes Tract Evaluation and Awards All Leases

11Boem rigThe Bureau of Ocean Energy Management (BOEM) completed its required evaluation to ensure the public receives fair market value for tracts leased in Western Gulf of Mexico Oil and Gas Lease Sale 248, held on August 24, 2016.

After extensive geological, geophysical, engineering, and economic analysis, BOEM has awarded all 24 leases on tracts covering 138,240 acres to high bidders who participated in the sale. The accepted high bids are valued at $18,067,020. BOEM accepted the 24 bids after determining that the value of each bid was sufficient to provide the public with fair market value for each tract. The highest bid accepted was $1,124,000, submitted by Exxon Mobil Corporation for East Breaks, Block 590. BHP Billiton Petroleum (Deepwater) submitted 12 of the 24 bids.

During the sale, three companies submitted 24 single bids totaling $18,067,020. No bids were received in water depths less than 800 meters or greater than 1,600 meters. By comparison, during last year’s Western Sale 246, 33 tracts received single bids totaling $22,675,212. Five of the bids were in water depths less than 800 meters and 21 were in water depths greater than 1,600 meters. For more information on Sale 248 click here.

Brunei Oil Industry Secures World First with Safety Standard

7OpitoBRUNEI has become the first country in the world to commission International Minimum Industry Standard Training (IMIST), reaffirming its strong commitment towards ensuring the safety of its 20,000-strong oil and gas industry workforce.

Following the Bruneian government’s undertaking to put around 3,000 front line worksite supervisors through the OPITO global standard for health and safety training earlier this year, the country has now set a deadline of November 2017 to roll IMIST out to people in this role.

IMIST was launched by not-for-profit industry safety organis\zation OPITO in 2011 to enhance workforce safety and competence by providing a comprehensive and consistent level of training across the world. The standard ensures that workers – no matter where they are based or who they are employed by - have the necessary safety awareness and training to reduce risk and minimize the potential for incidents.

Used by oil and gas companies in almost 50 countries around the world, Brunei is the first in the region to introduce its use for workers engaged in exploration and production activities.

Steve England Head of HSSE at the Energy and Industry Department Prime Minister’s Office said: “The energy sector is a core driver of Brunei’s economy. It accounts for more than 60 percent of Brunei’s GDP. In line with our National Vision 2035 to have sustainable energy for Brunei Darussalam’s prosperity, we aim to boost the skills of Bruneians to achieve the vision’s goals. The introduction of this first phase of minimum HSE standards is the beginning of our (HSSE’s) commitment towards that vision.

“The Bruneian government has undertaken to put approximately 3,000 front line worksite supervisors through the OPITO global standard for health and safety training. We have set a deadline of November 2017 to roll IMIST out to its entire oil and gas front line worksite supervisor workforce.”

Delivered in classroom and digital learning format, three already approved invigilation centers will now provide the training to industry: Mahkota Maju Sdn Bhd, Brunei LNG and Megamas Training Company Sdn Bhd with more to follow.

David Doig, chief executive officer of OPITO Group said: “Every worker has the right to go to work and return safely at the end of the day. Our mission is to support the global oil and gas industry to build a sustainable, competent and safe workforce and to ensure that quality, innovation and partnership underpin everything that we do.

“IMIST provides uniformity in training and ensures that everyone, regardless of their employer, role or discipline, has the same basic safety understanding and can perform their role to the same standard. We have worked closely with the Brunei Government on the implementation of IMIST and firmly believe their commitment will set a precedent in terms of how energy-producing nations train their workforce.”

A unique, not-for-profit organization, OPITO is wholly owned by the oil and gas industry and is responsible for ensuring it has a safe, skilled and competent workforce. With operation centers in Aberdeen, Dubai, Cyprus, Kuala Lumpur and Houston, OPITO standards, qualifications and workforce development frameworks are currently used by employers in over 45 countries worldwide.

Modifications or Operational Limitations for a Limited Number of Rigs

Following the accident involving COSLInnovator on 30 December 2015, some 100 semi-submersible rigs approved by DNV GL will be reviewed. Preliminary assessments indicate that a limited number of rigs will be subjected to modifications or operational limitations.

The semi-submersible rig COSLInnovator was drilling for Statoil in the Troll field when it was hit by a large, steep wave. Several windows on the rig's two lower decks were shattered. One person was killed. “Since the incident, we have made great efforts to identify what happened, understand how this could happen and, most importantly, implement actions to prevent similar incidents from occurring again,” says Ernst Meyer, DNV GL Director for Offshore Classification. “We have been working with rig owners, designers, operators and authorities towards a common goal; to ensure the safety of all those working on board the rigs.

7COSL Innovator04COSLInnovator

The incident investigation report presented by the Norwegian Petroleum Safety Authority in April 2016 concluded that the incident involving COSLInnovator has provided new knowledge that must be utilized in order to prevent similar incidents in the future. DNV GL therefore published a new technical guideline (OTG-13 – Prediction of air gap for column-stabilized units) as early as in June 2016. This gives a consistent and updated approach for calculating the air gap - the clearance between the highest wave crest and the bottom of the deck box in all relevant sea conditions.

Most rigs can operate as before

Last week, DNV GL asked all owners of DNV GL-classed semi-submersible rigs to provide updated documentation of each rig's air gap.

Rigs that, based on the new technical guideline (OTG-13), can confirm a positive air gap, will be able to operate as before without reinforcement or operational limitations. This is expected to apply to most of the semi-submersible rigs operating on the Norwegian shelf.

“I can't indicate how many rigs have negative or positive air gaps before each rig's calculations have been performed,” says Ernst Meyer.

“A limited number of rigs may not have a positive air gap, but most of these will be able to avoid changes. The prerequisite is that they are able to document a positive air gap for a specific location, or that they simply do not have windows that may be exposed to waves.”

Some rigs will need to remove windows

He elaborates on the consequences for the other rigs – those that are unable to prove a positive air gap in all sea conditions – including the hundred-year wave:

“Initially (for the next winter), these rigs will be required to remove windows in exposed zones. If the strength calculations show that further structural modifications are necessary, such modifications will be required as part of the permanent solution.

“The most important thing is that the windows are removed before the coming winter. This action eliminates the largest risk elements if a similar incident occurs,” Meyer explains. He emphasizes once again that operational limitations and limitations with regard to areas of operation may solve the air gap issue in the short term.

Rigs that are certified for worldwide operation must be documented according to North Atlantic wave data. Most rigs operate in milder areas, such as the North Sea, and can postpone modifications that may be necessary in the Norwegian Sea or Barents Sea.

DNV GL is the classification body that certifies the largest number of semi-submersible rigs, and these rigs operate under the most extreme weather conditions globally. The company works continuously to improve the class regulations used in certification work through future-oriented research and the thorough examination of and learning from incidents and accidents.

“The work behind the new guideline includes the use of updated statistical weather data and knowledge acquired from several independent model tests conducted in light of the COSLInnovator incident. We have also learned from previously conducted model tests and from operational experience after 40 years classing hundreds of similar rig types,” Ernst Meyer concludes.