Posted in decommissioning, energy policy, Gulf of Mexico, Offshore Energy - General, rigs-to-reefs, tagged Minerals Management Service, new film, rigs to reefs, Steel to Sanctuary, Villere Reggio on July 25, 2025| Leave a Comment »
Linked below is a new Rigs to Reefs film (“Steel to Sanctuary”). Note the commentary on permitting complexity and regulatory fragmentation.
Not mentioned in the film are the extraordinary efforts of the Mineral Management Service’s Villere Reggio in establishing the Rigs to Reefs program. Villere (pictured below), has a most interesting family history as summarized in the caption. See p. 3 of this issue of MMS Today for the complete article.
Posted in California, Offshore Energy - General, Regulation, tagged litigation, permitting, Sable Offshore, Santa Barbara County, Santa Ynez Unit on July 24, 2025| Leave a Comment »
In the Independent, Nick Welsh aptly described the latest court decision in the long and winding road that Sable Offshore hopes will lead to Santa Ynez Unit production:
“When Judge Donna Geck got through ruling on the latest showdown between Sable Offshore Oil and Santa Barbara’s environmental establishment last Friday morning, it wasn’t clear if the no-nonsense judge cut the proverbial baby in half or kicked the can down the proverbial road.”
Bottom line: The judge will “continue to bar the Fire Marshal from taking any steps to process Sable’s restart application until 10 days after Sable had received all the necessary permits and approvals from the myriad of state, federal, and local agencies that enjoy some degree of regulatory oversight over the proposed project.” Does that mean any agency, even one with a minor or questionable role, can block the project?
As the author notes:
“As of this writing, it’s not entirely clear which of those agencies have yet to issue Sable the permits it needs to start the restart process and when they’re likely to do so, if at all. Even less clear is whether there’s any agreement among the dueling parties as to which agencies have standing to even weigh in.”
Posted in Offshore Energy - General, tagged 1981, exploratory drilling, first wells, Georges Bank, North Atlantic drilling on July 22, 2025| Leave a Comment »
44 years ago today, drilling began on the first two exploratory wells on Georges Bank, the large seafloor feature that separates the Gulf of Maine from the Atlantic Ocean. The above Cape Cod Times headline attests to the drama that was unfolding 155 miles southeast of Nantucket.
After years of debate, oil embargoes, gas lines, and the threat of future supply disruptions tipped the political balance in favor of offshore leasing, and OCS Sale No. 42 (North Atlantic) was held one week before Christmas in 1979. Remarkably, only 19 months elapsed between the lease sale and the initiation of drilling.
Posted in Canada, Offshore Energy - General, tagged Canada, new petroleum licenses, Nova Scotia, request for bids, Scotian Shelf, Trevor Boudreau on July 21, 2025| Leave a Comment »
Scotian Shelf gas production ended in 2018, but Nova Scotia Energy Minister Trevor Boudreau (Acadian with many relatives in Louisiana?😉) says he is encouraged by preliminary expressions of industry interest in new licenses. The Provincial/Federal authority has issued a call for bids:
“The Canada-Nova Scotia Offshore Energy Regulator (CNSOER) has issued a petroleum-related Call for Bids NS25-1P, which includes 13 nominated parcels. Bids must be received by April 28, 2026, before 4:00 p.m. Atlantic Time. Successful bidder(s) may be awarded Exploration Licences (ELs), subject to the federal and provincial Ministerial review and approval process set out in legislation.”
“The petroleum-related Call for Bids NS25-1P nominated parcels are located on the central Scotian Shelf and Slope. Parcels 1 to 8 are located in deepwater on the Scotian Slope, in water depths from 200 to 4,300 metres. Parcels 9 to 13 are located on the Scotian Shelf, in water depths less than 200 metres, in the region where all historic gas, and to a lesser extent, oil production, has taken place. The shelf parcels are located near the Sable Island National Park Reserve and west of the Gully Marine Protected Area. No petroleum-related activity can take place within one nautical mile (or 1.85 kilometres) of the Sable Island National Park Reserve.“
Posted in Guyana, Offshore Energy - General, tagged arbitration, Chevron, CNOOC, Exxon, Guyana, Hess, Stabroek on July 19, 2025| Leave a Comment »
As posted in January, most analysts predicted that Chevron and Hess would prevail. Now that the arbitration panel has ruled, Chevron’s acquisition of Hess can be completed.
The position of Exxon and its partner, Chinese govt owned CNOOC, never made much sense given that Chevron was not buying the Stabroek share, they were buying the company that holds that share.
The CNOOC position was rather hypocritical given that they acquired their share of Stabroek by buying Nexen, the company that owned it.
Not much attention has been paid to the importance of Chevron’s acquisition of Hess’s Gulf of America assets. The combined company will be the 3rd largest GoM oil producer (behind Shell and bp) and the second largest gas producer (behind only Shell). Hess acquired 20 GoA leases in Sale 261, ranking first in total high bids ($88 million) among all participants.
Posted in energy policy, Offshore Energy - General, Regulation, tagged drilling Safety leaders, encouraging innovation, regulatory reform, rescinding regulations, US Dept. of the Interior on July 18, 2025| Leave a Comment »
Comments on the Dept. of the Interior’s regulatory reform initiative are due by July 21.
DOI’s “Deregulation Suggestions” form implies that their review may be limited in scope. The form focuses solely on rescinding regulations. True regulatory reform requires a broader assessment of regulatory methods and strategies.
Offshore safety regulations address known or perceived operational risks. Deleting individual provisions without considering the effect on the regulatory objective could introduce new risks without reducing the burden on operators and regulators.
More meaningful regulatory reform, and the associated improvements in operator and regulator efficiency, can be achieved by addressing regulatory fragmentation and providing regulatory incentives for companies with outstanding safety and environmental performance records.
My comments to DOI will address fragmentation and the challenges associated with updating regulations and standards. A Drilling Safety Leaders Pilot Program will be proposed. This pilot program would offer a more flexible regulatory regime for operators with outstanding safety records.
The regulatory system can constrain leading operators and delay innovation. The top performers should be encouraged to stay ahead of the technology and management curves. Most of the requirements that were added after Macondo had been adopted by leading operators well before the blowout.
Posted in California, energy policy, Offshore Energy - General, tagged Sable Offshore, Santa Barbara, Santa Ynez Unit, Supervisor Joan Hartmann on July 17, 2025| Leave a Comment »
Per the Independent, the alleged conflict of interest that prevented County Supervisor Joan Hartmann from voting on Sable oil matters has been reevaluated. She is now legally permitted full voting rights.
With Hartmann recusing herself, the supervisors had been deadlocked in a perpetual 2-2 tie when voting on issues concerning Sable. Supervisor Hartmann’s participation is not good for Sable given her public comments in opposition to the Santa Ynez Unit restart.
Posted in Gulf of Mexico, Offshore Energy - General, tagged Anchor, Chevron, DOE, Exxon, Mars Pipeline System, Shell, Strategic Petroleum Reserve, zinc contamination on July 16, 2025| Leave a Comment »
Reuters and others report that zinc from a new Chevron well has contaminated oil production destined for an Exxon refinery via Shell’s Mars Pipeline System. Because contaminated crude may cause maintenance issues and reduces the quality of refined products, Exxon will not accept crude from the Mars system until the zinc issue has been resolved.
The Mars system delivers about 575,000 bopd raising concerns about supplies to Gulf Coast refineries. But fear not, DOE authorized the delivery of up to 1 million barrels of oil from the Strategic Petroleum Reserve to the Exxon’s Baton Rouge refinery.
(Ironically, yesterday’s post pointed to the importance of the SPR and questioned the decision to drastically reduce crude oil purchases. This zinc incident is likely to be minor, and Exxon will repay the SPR in kind. However, more serious regional, domestic, and international events could call for much greater SPR withdrawals.)
The above map shows Chevron platforms that connect with the Mars system at Port Fourchon.
Speculation/commentary:
Posted in drilling, energy policy, Offshore Energy - General, tagged drill baby drill, oil and gas drilling, Rystad, tariffs on July 10, 2025| Leave a Comment »
Tariffs and their uncertainty “will certainly decrease expected investment activity in the energy sector,” says the new report. More than $50 billion of offshore investment this year has been deferred “with operators looking to wait out current market uncertainty before making significant final investment decisions,” Rystad notes.
Rystad estimates that tariffs will increase costs for offshore oil and gas projects by 8% year-over-year and 12% for onshore. “Most steel and raw material exposed cost categories are feeling the majority of the impact from tariffs and thus will take the biggest hit.”
The Tax Foundation and Wood Mackenzie have offered similar opinions.
Comment: At a glance, the number of 2025 well starts in the GOA appears to be down (more on this at a later date). While there are many factors affecting drilling decisions, lower oil prices and higher costs associated with tariffs are not compatible with a “drill baby drill” philosophy.
Bud's Offshore Energy (BOE) 
Regulatory reform comments
Posted in energy policy, Offshore Energy - General, Regulation, tagged comments, Department of the Interior, drilling Safety leaders, pilot program, regulatory burden, regulatory fragmentation, regulatory reform on July 23, 2025| Leave a Comment »
My comments in response to the Dept. of the Interior’s regulatory reform notice are attached. First and foremost, I believe these recommendations would reduce safety and environmental risks. Second, I am confident that they would also reduce governmental costs and the regulatory burden on industry.
The first attachment discusses regulatory fragmentation and recommends actions to reduce the complexity and redundancy of the offshore regulatory regime. The second attachment proposes a Drilling Safety Leaders Pilot Program as a means of evaluating a more adaptable framework regulatory framework for operators with outstanding performance records.
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