The Nickel Report

On August 22, 2023, the Department of the Interior (“DOI”) announced that the Bureau of Safety and Environmental Enforcement (“BSEE”) has issued the final Well Control Rule for drilling, workover, completion and decommissioning operations.  This final rule clarifies blowout preventer (“BOP”) system requirements, modifies certain specific BOP equipment capability requirements, and builds upon the regulatory reforms that were originally implemented by the DOI after 2010.  The BSEE is setting an effective date of 60 days following publication of the final rule, by which time oil and gas operators in the federally regulated outer Continental Shelf will be required to comply with most of the final rule’s provisions. Operators have a one-year deferred compliance date following publication of the final rule to equip subsea BOP stacks with the remotely operated vehicle intervention capability to both open and close each shear ram, ram locks, and one pipe ram as required by 30 CFR § 250.734(a)(4).  The final rule:

“Decommissioning” is the process of terminating oil and gas operations at offshore platforms. It includes dismantling and removal of platforms and related infrastructure to restore the ocean and seafloor to pre-lease conditions. As elaborated in a prior post, decommissioning may involve partial structure removal or toppling in place, including the creation of artificial reefs. The U.S. Department of Interior’s Bureau of Safety and Environmental Enforcement (BSEE) estimates that about 3,700 active oil and gas platforms are under its jurisdiction, 40 percent of which are over 25 years old and likely to require decommissioning soon.

Since the first Gulf of Mexico rig was installed in 1947, over 12,000 offshore oil and gas platforms have been installed globally. A 2016 study forecasts 600 will require decommissioning by 2021 and 2,000 more by 2040 at a cost of US$210 billion. Many newer platforms are sited in deeper waters, facing higher decommissioning costs and complexity.

The 1958 UN Convention on the Continental Shelf and 1972 London Convention broadly prohibited ocean “dumping.” Subsequent frameworks recognize exceptions permitting in situ offshore structure decommissioning consistent with internationally recognized standards. The 1982 UN Convention on the Law of the Sea (UNCLOS), for example, requires member states adopt rules no less stringent than the London Protocol, amending the original Convention to allow deliberate placement of subsea structures in defined circumstances. Thus, in situ offshore platform decommissioning has been recognized as conforming with governing treaties and legal frameworks.