Sables’ share price sank on Tuesday following reports from Bloomberg and others that Governor Newsom is proposing new restrictions on California’s offshore oil industry. With Sable Offshore as a primary target, stricter requirements for restarting inactive intrastate oil pipelines would be imposed. •
This could trigger yet another legal battle or increase the complexity of those that are ongoing. The onshore pipeline, now owned by Sable Offshore, was originally classified as an interstate pipeline under Federal jurisdiction. However, following the 2015 Refugio oil spill, it was reclassified as an intrastate pipeline via a 2016 letter of understanding signed by representatives of the Federal Office of Pipeline Safety (DOT-PHMSA) and the Office of the State Fire Marshal (pertinent text pasted below).
Given that the Sable pipeline will carry OCS production, it would seem to fundamentally be an interstate line (Federal jurisdiction), as it was when owned by Plains. Could DOT reverse the 2016 letter agreement? That is conjecture for the attorneys and courts to consider.
Meanwhile, below is an upbeat Sable video on the pipeline!
The attached comments were submitted to Regulations.gov on 9/8/2025.
Legislatively dictating downhole commingling approvals, as per Section 50102 of the One Big Beautiful Bill, is a reckless precedent from both technical and regulatory policy standpoints.
This type of legislative maneuver compromises the integrity of the OCS oil and gas program and the companies that participate in it. Shaving the maximum royalty rate was one thing; mandating well completion approvals is quite something else. Disappointing. ☹
John Borne was an exceptional engineer and offshore safety leader in our OCS oil and gas program during the US Geological Survey (Conservation Div.) and Minerals Management Service (MMS) eras.
Some thoughts on John’s leadership followed by tributes from distinguished colleagues:
John’s Houma District office was a model for the rest of the OCS program. Houma was the program’s busiest district in terms of operational activity, and the most effective in meeting permitting, inspection, and investigation targets.
The few serious accidents that occurred in the District were carefully investigated and the findings were shared in a timely manner with the goal of preventing their recurrence. If John signed a report, you knew it was complete and accurate.
John was knowledgeable about the complex offshore oil and gas operations he regulated, and was an outstanding teacher and mentor.
John treated all companies the same from the super-majors to the small independents – no biases, no favors, and no ethics issues.
John expected companies to fully comply with the regulations. Any departures had to be clearly in the best interest of safety and the environment.
From Ken Arnold (ex-Shell engr, Paragon Engineering President, NAE): As part of the Shell Training program in 1964 I was assigned to trail John in East Bay for a week. One night I was talking to another trainee on a logging barge tied up to a posted barge rig in SP Blk 24. John was also on the barge. Without warning the barge started pulling away from the rig. The three of us jumped from the barge to the rig but I slipped and fell in the canal. I don’t think I was in the water long enough to get wet, when John and a rig hand fished me out. Unfortunately my glasses fell off and were in the mud. John got a scissors device and retrieved my glasses in a matter of minutes.
I greatly appreciated my week with John. What he took the time to teach me about field work was critical to my subsequent successful career in Shell and in Paragon. He was a gentleman and a first class teacher. I was lucky to have known him.
Jodie Connor (founder and retired President of J. Connor Consulting): John was an excellent representative of the MMS, always fair in his decision-making and approvals. I endearingly called him “By the Book Borne”. He enforced the regulations as they were written, which was fair to all operators. Always kind and willing to explain MMS policies.
Lars Herbst (retired MMS/BSEE Regional Director, Gulf of Mexico): What a legend at MMS! A testament to his leadership are the number of Regional leaders that came out of Houma District. Just to name a few: Mike Saucier, Bryan Domangue, Troy Trosclair, and even Jack Leezy! That work ethic that John instilled has continued even to the next generation of leadership! I was fortunate that John let me act as Drilling Engineer when Saucier went hunting each December. My career at MMS was never the same after that opportunity!
Jack Leezy: (President, Avenger Consulting, retired MMS): John served in the Marine Corp during the Korean war. Upon discharge from the Marine Corp John attend the University of Lafayette and earned a BS degree in Petroleum Engineering. John started his oilfield career when he went to work for Shell Oil in 1960 until 1970 as a Petroleum Engineer.
John joined U.S.G.S. In 1970 as a Petroleum Engineer in the Lafayette District. John accepted a promotion in 1972 in the Regional office and was selected as the first District Supervisor in the newly formed Houma District office in October1974. John remained as the District Supervisor until his retirement in 1995. John was instrumental in developing Bureau policies of which some are still in place as of today. John served on countless MMS and industry committees alike during his career. John was looked upon as professional and highly respected by MMS and industry alike. He performed is duties in such a way that even if you may not have liked his decision, you respected it. John’s demeanor never changed as he never lost his composure and worked evenly though all the trials and tribulations during his career at MMS. John even won MMS’s Engineer of the Year award. I owe a lot to John in helping me form my career at MMS as I tried to handle my supervisory duties in the same manner in which John did.
RIP John. You were a superstar! As an engineer, regulator, leader, teacher, and colleague, no one did it better!
In 1991 Wood Group Production Technology (WGPT) received the Queen’s award for engineering innovation.
JL Daeschler, a pioneering subsea engineer who lives in Scotland, is saddened by the sale of the famous Wood Group engineering firm. After difficult financial losses, the Wood Group, headquartered in Aberdeen, has been sold at a cut-price to a Dubai based group.
Per JL: I knew Ian in the early North Sea development stage. He became Sir Ian Wood. We used to chat at various conferences in Houston, Stavanger, and Aberdeen. Ian was an energetic man, who had a friendly approach to our North Sea challenges. He was a true Aberdonian entrepreneur who employed 1000’s in offshore related disciplines worldwide. The crystal glass above was a gift by a University student I sponsored who later worked for the Wood group. In 1991 Wood Group Production Technology (WGPT) received the Queen’s award for engineering innovation. We worked closely on the development of down hole pressure censors and temperature gauges in the 1980’s.
JL reports that oil & gas is a hot subject in Scotland, but political commentary dwarfs technical discussion. To fix the economy, the govt should look at where people are struggling, and energy costs are their no. 1 concern.
While some politicians are belatedly vowing to maximize North Sea production, that will be difficult given the loss of operators, rigs, ships, installation and pipeline vessels, shipyards, and experienced workers. The infrastructure in Aberdeen is back to 1970 levels, and it’s difficult to build back what has been destroyed.
See below. BOEM is reconsidering its approval of the Construction and Operations Plan (COP) for New England Wind 1 and 2. The operator, Avangrid (Spain), is also a partner in the troubled Vineyard Wind project.
If you are keeping score, the approval of these COPs is being reconsidered:
Other projects: Work has been stopped on the Revolution Wind project. Work was previously halted on the Vineyard Wind and Empire Wind projects, but has been allowed to resume. BSEE has still not published its report on the Vineyard Wind turbine blade failure that occurred on 7/13/2024. Other projects have been suspended by the owners at their own initiative (e.g. Atlantic Shores South, Gulf of Maine, Starboard Wind, Vineyard Wind 2, Beacon Wind). Meanwhile, litigation abounds!
The latest Baker Hughes Rig Count Report shows only 10 rigs actively drilling in the Gulf. All are at deepwater locations – 7 in the Mississippi Canyon area, 2 in Green Canyon, and 1 in Alaminos Canyon. Per the BSEE borehole file, Shell accounts for most of the current MS Canyon wells and the Alaminous Canyon well. Beacon is also drilling in the MS Canyon, and the Green Canyon well appears to be a Chevron operation.
Only Anadarko/Oxy, Beacon/BOE, BP, Chevron/Hess, Shell, and Talos have spudded deepwater exploratory wells in 2025 YTD. Arena and Cantium are the only shelf drillers – all development wells.
Technological advances and extensions of past discoveries have sustained Gulf production, but declines are certain over the longer term if drilling activity doesn’t increase. Oil price uncertainty is an issue, but that’s always the case. Semiannual lease sales are now legislatively required and the terms will be attractive, so those issues are off the table. Let’s see what the bidding looks like at the upcoming sale.
The decline in deepwater discoveries (BOEM data below) is particularly discouraging. Per BOEM, the last deepwater field discovery was in March 2023.
The Construction and Operations Plan (COP) for the SouthCoast Wind project was approved during the last week of the Biden Administration. That approval has been challenged by the Town and County of Nantucket. Ocean Wind, a joint venture of EDP Renewables (Portugal) and ENGIE (France), is the leaseholder.
As is the case for Maryland Wind, a court filing (attached) indicates that DOI is reconsidering the approval of the SouthCoast Wind COP. Construction has not begun on this project.
A further deferral of Federal Defendants’ responsive pleading deadline in this case is needed because Interior intends to reconsider its COP approval and will therefore be moving for a voluntary remand of that agency action by September 18, 2025.
The average oil production rate for the Gulf OCS was 1.915 million bopd in June, the highest rate since Oct. 2023 and thus the highest in the history of the Gulf of America 😉.
Natural gas production, which is now primarily from oil wells (i.e. associated gas) and is thus more closely linked to oil production rates, increased by >10% in June to over 60 bcf. As was the case for oil, gas production was the highest since Oct. 2023.
It is now peak hurricane season, so the eyes of production forecasters are focused on the tropics. Few need to be reminded about what happened 20 years ago when Hurricanes Katrina and Rita roared through the Gulf, preceded by Hurricane Ivan “The Terrible” one year earlier. Those 3 hurricanes triggered major improvements in hurricane preparedness, particularly with regard to stationkeeping capabilities.
Equinor (2/3 Norwegian govt owned) is increasing its position in Ørsted (50.1% Danish govt owned). Given the ownership structure, public money is at risk for both countries.
The comments below are from a DN Norway article. They were made by CEO Torgrim Reitan after Equinor announced that the company will contribute NOK 10 billion (USD 1 billion) in Ørsted’s special share offering.
“We want a closer partnership with Ørsted. We are two leading companies in offshore wind, and we believe a closer collaboration could create significant value for both Ørsted’s and our own shareholders.”
“This industry is now going through its first real crisis. That makes it quite clear what’s needed. We know a lot about this from oil and gas. What often happens in such times is consolidation.”
“We want a closer partnership with Ørsted. We are two leading companies in offshore wind, and we believe a closer collaboration could create significant value for both Ørsted’s and our own shareholders.”
“In recent weeks, we’ve had conversations with Ørsted management, and we’ve also had conversations with the Danish state. But the discussions have primarily been with Ørsted.”
“Ørsted is in a difficult situation right now. For us, as an industrial and long-term owner, it’s important to be supportive and helpful in such a situation. That’s why we’re putting in nearly a billion dollars.”
“This is a difficult decision, because clearly a lot of equity capital needs to be raised, but we have a fundamental belief in the industry, and also in the company. Ørsted’s underlying portfolio is a strong one.”
“Going forward, this will increase our debt ratio somewhat—maybe by about two percentage points. But we’re starting from a very low debt ratio. So we can manage this within our financial framework. As for capital distribution in 2026 and beyond, we will remain competitive.”
Meanwhile, Equinor is the only major oil company that remains invested in US offshore wind energy. Equinor’s Empire Wind project continues to be highly divisive.
Bud's Offshore Energy (BOE) 