Gulf of America lease map: 199 oil and gas leases were wrongfully acquired for carbon disposal purposes. At Sale 261, Repsol acquired 36 nearshore Texas tracts in the Mustang Island and Matagorda Island areas (red blocks at the western end of the map above). Exxon had acquired 163 nearshore Texas tracts (blue in map above) at Sales 257 (94) and 259 (69).
As expected, the carbon disposal era in Federal offshore waters is ending before it began, and rightfully so.
Energy Intelligence is reporting that Exxon is relinquishing “more than 160 leases” in nearshore Federal waters off Texas. The actual number of oil and gas leases that the company improperly acquired for carbon disposal purposes is 163 (map above).
The reason being cited for the lease relinquishments is that the Dept. of the Interior has shelved regulations for carbon disposal on the OCS. Kudos to the DOI officials responsible for that decision. Carbon disposal has the support of no one except the companies that hope to profit from it. Further, there is no scenario under which Interior could have allowed these wrongfully acquired oil and gas leases to be converted to carbon disposal leases.
Now that these carbon disposal leases are being relinquished, it would be nice to see Exxon start acquiring OCS oil and gas leases for their intended purposes. Exxon and Mobil are historic Gulf operators who were once important contributors to the success of the OCS program.
Sable Offshore began ramping up production at Platform Harmony last May delivering oil and gas to their Los Flores Canyon Processing Facility. In March, they resumed transportation to the Pentland pipeline segments and achieved first sales.
Below are BOEM production data for Harmony through March 2026. Harmony production was expected to increase to 22,000 bopd in May. Similarly, Sable forecasted Heritage production of 30,000 bopd for that month. The actual production numbers should be available in a month or two.
Nothing in the March production data for Harmony is particularly surprising. The gas-oil ratio (GOR) of ~1000 cu ft/bbl is rather typical for oil production in the region, as is the water cut, although less water production would be preferred. Produced water is not discharged from the platform, but is injected subsurface through disposal wells.
Bryan Domangue presents the coveted Order of the Alligator citation to Mike SaucierLars Herbst welcomes Mike Saucier to our prestigious retirement organization (fMMS).
After 41 years of offshore safety leadership, Mike Saucier, an outstanding engineer and manager, is retiring from the Bureau of Safety and Environmental Enforcement (BSEE).
Like many of the offshore program’s stalwarts, Mike earned a petroleum engineering degree from the Louisiana State University (LSU). In 1984, he began his Federal career in the Houma District Office of BSEE’s predecessor, the Minerals Management Service (MMS), where he was mentored by the great John Borne.
Mike has held many important engineering and supervisory positions including Drilling Engineer and District Manager in the highly regarded Houma District Office, Regional Supervisor for Field Operations, Regional Supervisor for District Field Operations, Acting Deputy Regional Director for District Operations, and Senior Technical Advisor for the Office of the Director. When the New Orleans District Manager retired during a hiring moratorium, Mike stepped up and assumed those duties as well.
Mike impressed his colleagues with his commitment to safety achievement, the essential core element of the offshore program. His diligence, and his firm, fair, and consistent enforcement of the safety and pollution prevention regulations, earned him respect throughout the offshore industry.
Mike is an avid outdoorsman who enjoys hunting and fishing, and has 4 grandsons to mentor in those skills. Note the impressive achievements cited in the Order of the Alligator certificate (below) 😉. The Order of the Alligator recognition is most fitting given Mike’s alligator hunting expertise, which greatly impressed those of us who were unfamiliar with such exploits!
In recognition of Mike’s outstanding career, the Board of Directors of the former Minerals Management Service (fMMS) has unanimously voted to induct Mike into the fMMS Hall of Fame! Mike receives (is sentenced to? 😉) lifetime membership in the fMMS and a registered copy of the offshore world’s prized masterpiece, the painting Rig at Sunset 😉. (image and short explanation below).
Congratulations to Mike! You made a difference!
“Rig at Sunset” was painted 50 years ago by a US Geological Survey (USGS) employee who chose to remain anonymous. Initially, the masterpiece was presented to USGS (later MMS) engineers and scientists who had made important contributions to the offshore oil and gas program. Understandably, the intended recipients were so humbled by the magnificence of the painting that they could not accept it. As the painting grew in value and international prominence, framed copies were presented to outstanding retirees and the original painting was kept at a secure, undisclosed location.
In the ongoing Santa Ynez Unit production restart saga, John Smith informs that a California Appellate Court ruled against Sable Offshore by a vote of 2-1, with a strong dissent from one of the three judges.
The decision (attached) affirms the California Coastal Commission’s regulatory authority over Sable’s Los Flores Canyon pipeline repairs, meaning that Sable could be ordered to cease operating the pipeline. However, this is just one element of a complex legal maze. An important case regarding PHMSA’s emergency special permit for the pipeline will be heard by the Federal 9th Circuit Court of Appeals in July.
The dissenting judge’s opinion beginning on p.15 of the attachment sets the stage for the upcoming arguments in the 9th Circuit. Excerpt:
“But first, a dose of reality. The repair work has been done. It is a “fait accompli.” And, pursuant to federal intervention, oil is now flowing in the pipeline without incident. The supremacy clause of the United States Constitution takes precedence. The federal Government trumped the state’s Commission “cease and desist” order and it trumps the preliminary injunction order. Based upon these events, the trial court should vacate the preliminary injunction, dismiss the matter as moot, and nullify the civil penalties.”
Meanwhile, the California Coastal Commission notified Sable Offshore that it intends to issue a cease and desist order aimed at shutting down crude oil extraction in the Santa Barbara Channel.
Sable responds:“Sable Offshore Corp. (“Sable”) through its subsidiary, Pacific Pipeline Company (“PPC”), continues to lawfully operate through its existing coastal development permits which were issued in 1986.”
DOT and others shouldn’t make statements they can’t back up (see the X post below).
As a supporter of responsible offshore oil and gas operations, I find statements like this to be irresponsible and embarrassing. Sable Offshore is not using newer or safer drilling technology than is used in many other areas.
The Sable Offshore Project is using new technology to drill oil that is more safe and environmentally friendly than anywhere in the WORLD@PHMSA_DOT is proud to be a part of this and making America ENERGY DOMINANT 💪 https://t.co/q3ztD1G0R4
— U.S. Department of Transportation (@USDOT) June 10, 2026
Pointing to the potential financial implications for GE Vernova, Recharge News cites this serious fraud accusationby Vineyard Wind (VW):
“This exceptional misconduct includes [GE Vernova’s] intentional scheme to falsify critical quality assurance data… and to intentionally misrepresent the quality of those blades to [Vineyard Wind] in a brazen fraudulent, and willful breach of the TSA, ultimately resulting in the catastrophic blade failure…”
Recharge also discusses the findings of the Project Engineer appointed by VW to resolve claims between parties. Under the terms of the contract, the engineer’s determinations are binding unless overturned in arbitration.
The engineer determined that GE Vernova was liable for project delays, blade defects, vessel costs, and a $185m rescission of previously certified payments.
The damage claims issued by the project engineer total $853m.
On the basis of those determinations, VW withheld 100% of the outstanding invoices issued by GE Vernova. Even netted against sums allegedly owed to GE Vernova, VW says the turbine maker owes around $545m.
Per the contract, there are no limitations on liability in cases of “fraud, gross negligence, deliberate default or willful misconduct.”
My take: VW’s charges against GE Vernova will be resolved in the courts. However, VW is the lessee and operator, and is thus the party responsible to the Federal govt for project safety and environmental protection.
Operator responsibility is a fundamental tenet of the OCS regulatory program. As lessee/operator, VW bears ultimate responsibility for project safety and environmental protection.
VW is responsible for contractor selection, management, and oversight.
If a contractor violates a regulation, the violation notice is given to the operator. If a contractor causes pollution, the operator is responsible for the cleanup.
DNV, the Certified Verification Agent (CVA) hired by VW, was required to verify the design, fabrication, and installation procedures. Did they raise any issues to VW and the regulators?
Did the division of responsibilities between BOEM and BSEE weaken regulatory oversight? BOEM, ostensibly just the leasing bureau, should not have been authorized to grant departures that could affect structural integrity and operational safety.
It’s surprising that VW has not been cited for civil penalties resulting from the blade failure and the resulting environmental damage.
How can a judge prevent a contractor from stopping work for an operator that has filed serious fraud allegations against the contractor, has stopped making payments, and has, along with the Governor, declared the project to be complete?
Those who have been following the Santa Ynez Unit saga should take a look at Sable’s informative PowerPoint update (attached). The presentation includes reserve data, well operation plans, production forecasts, financial and legal updates, and regional energy supply information.
Also, Sable CEO Jim Flores has announced that Energy Secretary Wright and Interior Secretary Burgum will be visiting the project this week. Transportation Secretary Duffy was also expected, but he will not be attending.
The report is intended to update the Coast Guard’s methodology for estimating the cost savings resulting from spill prevention regulations. The paragraph pasted below is a good summary of the objective.
The offshore industry could benefit from this report, because the estimated cost of spills >100 gallons is reduced, dramatically so when the DWH/Macondo blowout is excluded (see the second table below). That reduction would support regulatory reform initiatives,and could thus generate some controversy.
My main concern is that there is only a single distance-from-shore category for offshore spills (see text below). The natural resources damage from a spill 3 miles from shore will almost always be much greater than from an equivalent volume spill 100 miles from shore.
The single-offshore-category issue is illustrated in the 2 tables pasted below. The first table presents a summary of expert opinions on the smallest spill size that is likely to result in measurable natural resource damages. The mean response to Question 3 (offshore) is 7782 gallons. A spill of that size occurring 3 miles from shore is much more likely to result in resource damage than a spill originating 50 or 100 miles from shore.
In the second table, note the new methodology results in the same cost estimates for large nearshore/coastal spills as for offshore spills. Again, this is presumably because there is only a single offshore category.
The public comments on this report should be interesting.
Santa Barbara Channel, Dos Cuadras Field platforms (L to R): Hillhouse, A, B, and C; Antandrus Wiki photo
As part of the recent focus on decommissioning and financial assurance requirements, I looked at borehole data for platforms A, B, and C on Lease OCS-P 0241 in the Santa Barbara Channel. Platform “A” is where a well blew out in 1969, permanently scarring the US offshore program. Observations:
There are 140 completed and unplugged wells on the 3 platforms. None of the wells on these platforms have been permanently plugged and only one is temporarily abandoned.
The latest available production information (2024 data) indicates ave. daily oil production of 3791 bopd for the lease, including 1901 bopd from Platform A, the highest production for any platform in the region in 2024.
41 of the lease’s completed (unplugged) wells are on Platform A.
The number of these wells that are currently producing is not publicly available.
30 of the completed Platform A wells were drilled prior to 1985.
The blowout well was the 5th well drilled from platform A. All 4 of the wells drilled prior to the 1/28/1969 blowout are still unplugged:
well A-20: spudded on 11/19/1968, reached total depth on 12/2/1968
well A-41: spudded on 11/27/1968, TD on 12/19/1968
well A-25: spudded on 12/18/1968, TD on 12/28/1969
well A-38: spudded on 1/12/1969, TD on 1/24/1969
Note how quickly the wells were drilled. The wells were shallow (2299-4051′ true vertical depth), and the operator (Union Oil) saved time by omitting a casing string. (This decision was a root cause of the blowout and thus changed history 😡)
Lease documents and regulations at 30 CFR § 250.1710require that all wells be permanently plugged within one year of lease termination. For leases like 0241 that are still active, 30 CFR § 250.1711 stipulates that BSEE will order a well to be permanently plugged if the well poses a hazard to safety or the environment, or is not useful for lease operations and is not capable of oil, gas, or sulphur production in paying quantities. In the Gulf of America Region, the policy is to require wells that have not been used in the past 5 years to be permanently plugged. Allowing old wells to remain unplugged is neither prudent nor consistent with the regulations.
Bud's Offshore Energy (BOE) 