For the first time in the history of the US offshore oil and gas program, taxpayers will be funding the plugging of OCS wells. This should be viewed as a collective failure by government and industry. Nearly 34 years have passed since the Alliance bankruptcy, the first of many wake-up calls, and we still haven’t figured this out.
Per BSEE’s recent announcement, Federal funds will be used to plug wells in the Matagorda Island (MI) area of the Gulf of Mexico (see map below). Based on a BSEE presentation and BSEE borehole data, these wells were drilled by Matagorda Island Gas Operations LLC, a company that filed for bankruptcy in 2014.
Prior to the bankruptcy filing, Matagorda Island Gas was cited for 112 violations on 108 inspections. This INC/inspection rate is approximately double the Gulf of Mexico (all operators) rate in a typical year (0.52 in 2022), and is 4 to 25 times higher than the rate for the 2022 Honor Roll companies.
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