DOI Orders Gulf Operators to Plug 3,500 Unused Wells

The Department of the Interior on Wednesday announced they will require oil and gas companies operating in the Gulf
of Mexico to set permanent plugs in nearly 3,500 nonproducing wells and
dismantle about 650 oil and gas production platforms.

The announcement addresses
what is known in the oil and gas community as “idle iron”–wells,
platforms and pipelines that are no longer producing or serving
exploration or support functions related to the company’s lease.

Federal
regulations require such facilities to be decommissioned, a process
that involves plugging wells and dismantling and removing platform
structures and pipelines in a timely manner and no later than one year
following the expiration of the lease.

Historically, oil and gas producers have asserted that
platforms, wells and pipelines that have not been plugged might one day be used in
support of other active wells within the same
lease area. They were reluctant to plug the wells and remove
the infrastructure until they met the final decommissioning regulatory
requirement which is within one year after the lease expires or
terminates–sometimes years after the infrastructure has been out of
use.

Wednesday’s Notice to Lessees clarifies the regulation and mandates that any
well that has not been used during the past five years for exploration
or production must be plugged, and associated production platforms and
pipelines must be decommissioned if no longer involved with exploration
or production activities. Companies will have 120 days to submit a
company-wide plan for decommissioning these facilities and wells.

The plans must contain details for each individual well and facility,
including specific dates for the submission of related permits and for
commencing and completing decommissioning work. After the Bureau of
Ocean Energy Management, Regulation and Enforcement has approved a
company’s decommissioning plan, bureau officials say they will track the progress
of each company and of the industry as a whole

“As infrastructure continues to age, the risk of damage increases. That
risk increases substantially during storm season. This initiative is the
product of careful thought and analysis and requires that these wells,
platforms and pipelines are plugged and dismantled correctly and in a
timely manner to substantially reduce such hazards,” said Michael R. Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement.

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