Posted in Uncategorized | 5 Comments »
In light of the decommissioning fire at Platform Habitat, I checked on the status of well plugging operations at Platforms Hogan and Houchin.
BSEE (2020) estimates the cost of decommissioning these facilities to be $85 million (too low), and there is no collateral or third party guarantee.
The responsibility for decommissioning these platforms has yet to be settled. ConocoPhillips, Oxy, and Devon have appealed decommissioning orders from BSEE. The Interior Board of Land Appeals (IBLA) has yet to rule on those appeals. The appellants are funding some plugging operations and facility upgrades pending the IBLA decision.
Per BSEE’s borehole file, this is the current status of the Hogan and Houchin wells:
- 33 completed and not yet plugged; these wells were drilled between 1968 and 2010
- 43 temporarily abandoned (TA) wells plugged in accordance with 30 CFR § 250.1721
- 10 wells have been updated to TA status in the past 6 months (latest 3/22/2026), so some progress is being made
- 0 permanently abandoned wells (30 CFR § 250.1715)
Therefore, by my count, 33 wells have yet to be TA’d, and all 76 wells remain to be PA’d. Note that the lease was relinquished nearly 6 years ago (10/14/2020).
If you are interested in the Hogan/Houchin mess or decommissioning liability in general, I highly recommend that you look at Devon’s informative and rather compelling appeal to IBLA. Similar appeals were submitted by Oxy and ConocoPhillips.
Lease history (excerpted from the Devon appeal):
- Lease OCS-P 0166 was issued effective January 1, 1967.
- Phillips Petroleum Company (“Phillips”) (predecessor to ConocoPhillips), Cities Service Oil Company (predecessor to Oxy), and Continental Oil Company (predecessor to ConocoPhillips) were the initial lessees
- Phillips was designated operator on January 25, 1967
- February 28, 1983: Petro-Lewis Funds, Inc., obtained the 37.5% interest of the Continental Oil Company (which in 1979 had changed its name to Conoco Inc., now Conoco Phillips Company (“ConocoPhilips”)).
- November 1983: Cities Service Oil Company assigned its 37.5% interest to Cities Service Oil and Gas Corporation (now OXY U.S.A. Inc).
- July 2, 1987: the Minerals Management Service (“MMS”) approved two more assignments of the Lease. One, from PetroLewis Funds, Inc. to American Royalty Producing Company (“American Royalty”), was approved retroactively to December 31, 1984. The other, from American Royalty to Santa Fe Energy Company(“Santa Fe”), was approved retroactively to April 30, 1987.
- April 1, 1988: Santa Fe transferred a 3.75% interest to Maersk Energy Incorporated, reducing Santa Fe’s share to 33.75%.
1991 Assignment to Signal Hill: MMS approved assignment of the lease to Signal Hill effective February 5, 1991. The assignment was approved without any provision under which the assignors agreed to be liable for decommissioning operations on the lease. MMS’s approval actually had the opposite effect, leaving such obligations to the assignee. The assignment was approved despite concerns within the MMS about the financial strength of Signal Hill and the technical competence of Pacific Operators Offshore Inc (POOI), the affiliate that would operate the facilities.
Comments:
- The assignment to Signal Hill should have never been approved. The outcome was predictable.
- The Devon, Oxy, and ConocoPhillips appeals are very strong and would seem to have a good chance of success. Perhaps that is why the IBLA decision is taking so long (nearly 5 years to date).
- Given the uncertainty regarding this appeal, the absence of transparency about other potential decommissioning liabilities, and the uncertainties regarding the administration of predecessor liability, this is not the time to be relaxing financial assurance requirements and further exposing taxpayers to decommissioning risks.
This is the final day to comment on BOEM’s proposal:
Posted in California, decommissioning, Offshore Energy - General, Regulation | Tagged BOEM, ConocoPhillips, decommissioning, Devon, financial assurance, Hogan and Houchin, IBLA, Oxy, permanent abandonment, Signal Hill, temporary abandonment | Leave a Comment »
At a minimum, the fire will further delay and increase the cost of well plugging operations on Platform Habitat. Per BSEE’s borehole file, 17 wells remain to be permanently abandoned, 3 of which have yet to be temporarily abandoned. These wells are 23-44 years old, and have been inactive for 11 years.
If there is significant platform damage, the remediation delays and costs would be substantial, comparable to those associated with major Gulf platforms damaged by hurricanes. Structural damage could increase the urgency of removing the platform. Given California’s decommissioning quagmire, this would be a major challenge.
Who pays, and what does the financial assurance picture look like? Per the attached BOEM spreadsheet (excerpt pasted below):
- The 2020 cost estimate for decommissioning Habitat was $44.3 million. That number is optimistic even if platform damage is minimal.
- $13.6 million in supplemental assurance has been provided.
- A third party guarantee has been secured.
- The guarantee was provided by Freeport-McMoRan Oil & Gas (FMOG)
- Per BOEM, FMOG is the guarantor for all DCOR leases. Unless BOEM has allowed otherwise, the guarantor pays all costs not covered by the lessees. Given the number of old platforms and California decommissioning challenges, the risks for FMOG are indeed large.
Although DCOR LLC is the current Habitat operator, the company owns only a 4.18% share of the project. CHANNEL ISLANDS CAPITAL, L.L.C., a private company about which little is known, holds a 95.82% share.
Should the 2 owners default, BOEM/MMA will look to the guarantor and predecessor lessees (see the chart below). Unfortunately for FMOG, they are both the guarantor and the predecessor lessee. FMOG acquired Plains Exploration & Production (PXP), the operator prior to DCOR. Nuevo Energy was acquired by PXP and thus also tracks back to FMOC. (This may explain FMOC’s decision to be a guarantor!).
Should FMOC fail to fulfill their obligation. Chevron would likely be the next target. The original Harvest partners were Texaco (operator) and Union Oil, both of which were acquired by Chevron.
Posted in accidents, California, decommissioning, Regulation | Tagged BOEM, California, DCOR, decommissioning, financial assurance, fire, FMOG, Habitat, predecessor liability, well plugging and abandonment | 2 Comments »
All 26 workers were safely evacuated from DCOR’s Platform Habitat. The big question now is the fitness of the structure for continuing well plugging/abandonment and platform decommissioning.
As indicated in the attached letter, BSEE had informed DCOR that their Pitas Point Unit leases (where Platform Habitat is located) expired on 3/15/2016 owing to the cessation of well operations 6 months prior. Following the Interior Board of Land Appeals (IBLA) May 7, 2021 affirmation of BSEE’s directive, DCOR was notified that they must permanently plug all wells within one year of the lease termination (i.e. one year after the 2021 IBLA decision). I’ll include the informative IBLA decision in a future post.
Although details have not been shared, it appears that well plugging operations were still ongoing on 5/11/2026 when the fire occurred. According to BSEE’s borehole file, most of the Habitat wells have been temporarily abandoned, but few have been permanently abandoned, and several are still completed (i.e. neither temporarily nor permanently abandoned).
The risks and costs associated with delaying well plugging and abandonment have once again been demonstrated at Habitat. Fortunately, there were no casualties or pollution.
With regard to overall safety compliance, DCOR is the violations leader in the Pacific Region. In 2025 and 2026 (YTD) they were cited for 70 violations, 66 of which required component or facility shut-ins. The age of the 9 DCOR platforms (installed by others between 1968 and 1984) has likely contributed to the compliance challenges.
BSEE spreadsheets for 2020-2024 show 6 incidents at Platform Habitat. BSEE’s incident summaries are pasted in the second attachment.
Neither DCOR nor BSEE has issued a statement on the Habitat fire.
This serious incident further demonstrates the concerns expressed by John Smith and me about the relaxed decommissioning financial assurance regulations proposed by BOEM.
Posted in accidents, California, natural gas, Offshore Energy - General, Regulation, well control incidents | Tagged DCOR, decommissioning, expired lease, fire, incidents, platform condition, platform habitat, violations, well plugging | 1 Comment »
In announcing its annual licensing round, Norway expresses strong support for offshore exploration and production:
The oil and gas industry is crucial for Norway and for Europe. The government is today announcing new exploration areas in the APA (Allocations in Predefined Areas) to further develop the petroleum sector, so that it can continue to create great value for the community, lay the foundation for good jobs throughout the country, ensure our common welfare and contribute to Europe’s energy security and safety, says Prime Minister Jonas Gahr Støre.
Kudos to Norway for the strong, unequivocal announcement. Consistent acreage offerings are important in sustaining offshore production:
Allocations in Predefined Areas (APA) are an annual licensing round that covers the best-known exploration areas on the continental shelf. Through the APA scheme, oil companies gain predictability regarding access to exploration acreage, which is important for a long-term industry such as the petroleum industry. After more than 50 years of exploration activity, the APA scheme today covers the majority of the area that is opened and available on the Norwegian continental shelf.
This is what it takes to sustain oil production at about 2 million barrels/day and gas production at over 10 billion cu ft/day.
Norway also has an exemplary risk and performance-based regulatory regime administered by Havtil.
Perhaps less pragmatic, in the opinion of this observer, are these policies:
- Electrification of distant offshore platforms: Given the reliability, cost, and cable vulnerability concerns, Equinor has wisely scratched some of their electrification plans.
- Carbon sequestration (disposal) projects: high cost, added risk, questionable benefits (hopeful that the Gulf of America carbon disposal era will end before it begins)
Posted in energy policy, Norway, Offshore Energy - General, Regulation | Tagged carbon disposal, electrification policy, Jonas Gahr Støre, licensing round, Norway, support for offshore production | Leave a Comment »
- Crew safely evacuated
- Prompt response by the USCG and local fire agencies
- Gas leak during decommissioning operations
- Fire began at 0700 PT; controlled by 1100 PT
- 45 year old platform; no longer producing
- Operated by DCOR LLC
- No environmental threat
- Habitat was the only California OCS platform that produced dry natural gas (minimal oil or condensate)
Posted in accidents, California, well control incidents | Tagged California, Coast Guard, DCOR, decommissioning, fire, gas leak, no injuries, platform habitat, Santa Barbara | Leave a Comment »
Scientific discovery, technological innovation, and human ingenuity are not finite!
The U.S. Geological Survey released its assessment of undiscovered gas and oil in the Bossier Formation along the Gulf Coast. USGS assesses that there are technically recoverable resources of 343.5 trillion cubic feet of gas – enough to supply the United States for more than 10 years at the current rate of consumption.
The USGS quantitatively assessed three continuous and one conventional AUs (assessment units) for undiscovered oil, gas, and natural gas liquid resources in the Bossier Formation. The estimated mean total resources in the four AUs are 3 million barrels of oil (MMBO), with an F95–F5 range from 1 to 8 MMBO; 343,499 billion cubic feet of gas (BCFG), or 343.5 trillion cubic feet of gas, with an F95–F5 range from 103,943 to 611,703 BCFG; and 374 million barrels of natural gas liquids (MMBNGL), with an F95–F5 range from 109 to 721 MMBNGL (table 2).
So much for the depletion of our natural gas resources! Long-time gas advocates knew that geologic studies, technology, and ingenuity would provide the resource, and that has been demonstrated in spades!
Kudos to USGS, headed by my former colleague Ned Mamula, for their important resource assessment studies!
Posted in energy, natural gas | Tagged 343.5 tcf, Bossier Formation, natural gas abundance, Ned Mamula, resource assessment, technology, USGS | Leave a Comment »
New York City Comptroller Mark Levine has urged ExxonMobil shareholders to reject the proposal to move their corporate headquarters to Texas, which he claims has “less robust” shareholder rights. Apparently, he would rather that XOM remain in a State where they can more easily be targeted for frivolous law suits.
James Copland, Senior Fellow and Director of Legal Policy at the Manhattan Institute : “rather than focus on improving New York City’s business climate, the comptroller is more interested in opposing ExxonMobil’s proposed redomiciling from New Jersey to Texas, solidifying its operations in a less hostile business environment.”
Mr. Levine’s chutzpah is indeed impressive, even by NYC standards, but shareholders will not vote against their own financial interest.
ExxonMobil’s move means that the three feature pieces of John D. Rockefeller’s Standard Oil legacy will now be domiciled in Texas – Standard Oil of New Jersey (Exxon), Standard Oil of New York (Mobil), and Standard Oil of California (Chevron).
Posted in energy policy, Regulation, Uncategorized | Tagged chutzpah, Comptroller, ExxonMobil, John Rockefeller, New York City, relocation, Standard Oil, Texas, XOM | Leave a Comment »
California Attorney General Bonta asks the Court to stay Energy Secretary Wright’s Order directing Sable, under the Defense Production Act to restart production and preliminarily enjoin Defendants, and all those acting in concert with Defendants (i.e. Sable), from enforcing or relying on it. See the attached Federal Court filing.
The AG’s irreparable harm and public interest arguments seem particularly weak, and this may not be the best time to attempt to halt a 20+% increase in California oil production.
Posted in California, energy policy, Offshore Energy - General, pipelines, Regulation | Tagged AG Rob Bonta, Chris Wright, irreparable harm, litigation, production restart, Sable Offshore | 1 Comment »
API’s letter is attached. Key points:
- Requesting a 60 day extension (double the comment period specified by BOEM)
- Need more time to:
- review the detailed proposed changes
- conduct studies to inform agency
- analyze the studies and data
- consider alternatives
- organize, complete, and review the findings of subject matter workgroups
In API’s favor:
- Agencies have discretion on extending comment periods.
- 60 days is typically considered the minimum comment period; 90 days would have been more appropriate for this proposal.
- API members are clearly affected parties.
- The BOEM proposal relaxes financial assurance requirements for smaller companies while increasing predecessor lessee risk exposure. Those predecessors would typically be API members.
- There are divisions within the industry which complicate trade association commenting.
On the other hand:
- API’s letter is dated May 1, just one week prior to the end of the comment period.
- The letter was not posted at Regulations.gov until May 6, 2 days before the end of the comment period. Only those tracking the comment letters would have been aware of the request even at this late date.
- As of early this morning (May 7th), the docket still specifies a May 8 due date for comments.
- An extension could be viewed as inequitable to other concerned parties who made special efforts to honor the deadline.
Comments:
- This is why it’s best to specify a reasonable comment period at the time the regulation is proposed, and make it clear that there will be no extension. That way, everyone is treated the same.
- For this proposal, 90 days would have been reasonable.
- Given the number of significant issues that need to be addressed, the best outcome for this rule would be a re-proposal. See the comments submitted by John Smith and me.
Posted in decommissioning, energy policy, Regulation | Tagged API, decommissioning, extension of comment period, financial assurance, request to BOEM | 1 Comment »
Bud's Offshore Energy (BOE) 
BOEM extends comment period on the financial assurance proposal, but only by one week!
May 7, 2026 by offshoreenergy
BOEM has extended the public comment period and will accept comments on the proposed rule through 11:59 p.m. Eastern Time on May 15, 2026.
Interesting decision, and not the one many of us expected.
Posted in decommissioning, energy policy, Regulation | Tagged BOEM, decommissioning, extension of comment period, financial assurance, proposed regulation | Leave a Comment »