John Smith shared the attached letter from Senators Adam Schiff and Alex Padilla, and members of the California congressional delegation. The letter questions BSEE’s inexplicable announcement about the resumption of Santa Ynez Unit (SYU) production. That announcement boasted:
“This is a significant achievement for the Interior Department and aligns with the Administration’s Energy Dominance initiative, as it successfully resumed production in just five months.“
BSEE’s announcement, which has not been explained and is still featured on their homepage, served only to further complicate the resumption of production from the SYU, which has reserves in excess of 500 million barrels.
ANP (Agência Nacional do Petróleo, Gás Natural e Biocombustíveis) nicely organizes and presents Brazil’s production data. Their 30-page monthly bulletin includes field specific information. The US does not have an equivalent publication.
Brazil produced 5.16 million boe/day in July, 97.7% of which was from offshore fields. Oil production was 3.959 million bopd, making Brazil the no. 1 offshore producer. Brazil’s offshore oil production is approximately the equivalent of the combined offshore production of the US and Norway.
How important is Brazil’s offshore sector? Their offshore production is from 568 wells. Assuming all 568 wells were actively producing oil wells (no gas or service wells), the average production rate was ~7000 bopd plus associated gas. More than 10 times as many wells (6033) produced Brazil’s limited onshore production. So <10% of Brazil’s wells (all offshore) account for nearly 98% of their production.
How important is pre-salt exploration and production technology? Pre-salt production (only 169 wells) accounted for 79.1% of the national total of 5.16 million boe/d.This means that pre-salt wells averaged 24,000 boe/d.
Room for improvement? 2.9% of the produced gas was flared (queima) in July (first chart). Over the past year, Brazil’s flaring volumes ranged from 2.2 to 3.9% of gas production. The fact that nearly all of their gas production is from oil wells, the growth in production (2nd chart), and the higher upset potential (perhaps) for FPSOs, may help explain the relatively high flaring numbers. 1.3% of Gulf of America gas production was flared or vented in 2024 (still too high). <1% flaring rates should be the target for all offshore producers.
…and should be an integral part of Job Safety Analyses!
According to BSEE, there is a recurring trend of equipment misuse contributing to fire and explosion hazards during offshore oil and gas operations in the Gulf of America.
Workers have used tools not rated for electrical work on live circuits (Figure 1) and mismatched hydraulic or pneumatic tools for high-pressure systems (Figure 2). In several cases, non-intrinsically safe hand tools were used in explosive atmospheres, including mudrooms and drilling floors.
California Senate Bill 237, the compromise oil legislation supported by Gov. Newsom, Assembly Speaker Rivas, and Senate President McGuire, opens up Kern Co. drilling in exchange for pipeline safety measures that will doom the Santa Ynez Unit (SYU) if Sable fails to restart production by Jan. 1.
Particularly intriguing is the the list (below) of SB 237 supporters and opponents. The Western States Petroleum Assoc. (WSPA), is aligned with the unions for onshore drilling and against the SYU. Note that Exxon is a prominent WSPA members! Exxon assigned the SYU to Sable and is on the hook for massive decommissioning costs if production is not resumed. Perhaps Exxon has a backup plan for the SYU?
Also note that all of the environmental groups are aligned against SB 237. Compromise is not in their playbook.
John Smith’s highlighted summary of SB 237 is attached. Here is the provision that would seem to doom Sable:
Clarifies in the Coastal Act that development associated with the repair, reactivation, or maintenance of an oil pipeline that has been idled, inactive, or out of service for five years or more requires a new CDP, as provided.
REGISTERED SUPPORT / OPPOSITION: Support Associated Builders and Contractors of California Berry Petroleum Company, LLC California Conference of Carpenters California Independent Petroleum Association California Resources Corporation and Subsidiaries California state Pipe Trades Council California State Association of Electrical Workers City of Bakersfield Consumer Watchdog County of Kern State Building & Construction Trades Council of California Western States Petroleum Association
Opposition Asian Pacific Environmental Network Action California Environmental Justice Alliance Action California Environmental Voters Campaign for a Safe and Healthy California
Center for Biological Diversity Center on Race, Poverty & the Environment Central California Environmental Justice Network Clean Water Action Climate First: Replacing Oil & Gas Communities for a Better Environment Earthjustice Leadership Council for Justice and Accountability Physicians for Social Responsibility Los Angeles
John Smith has highlighted the attached bill that could, if passed, further derail Sable’s plans to restart Santa Ynez Unit (SYU) production.
This provision appears to target Sable:
Section 3(b)(2): Repair, reactivation, and maintenance of an oil and gas facility facility, including an oil pipeline, that has been idled, inactive, or out of service for five years or more shall be considered a new or expanded development requiring a new coastal development permit consistent with this section.
The legislation would be effective on 1/1/2026 so perhaps Sable will already be producing. Sable may also explore the jurisdictional and interstate commerce issues touched on in this post.
This LA Times update adds to the confusion as to the implications for Sable.
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.
Bud's Offshore Energy (BOE) 