MMS extends deadlines for Gulf of Mexico ultradeep gas leases

Aug. 25, 2004
The US Minerals Management Service Aug. 19 said it will extend the terms of some leases held in the shelf area of the Gulf of Mexico because the agency wants to further encourage deep gas exploration.

Maureen Lorenzetti
Washington Editor

WASHINGTON, DC, Aug. 25 -- The US Minerals Management Service Aug. 19 said it will extend the terms of some leases held in the shelf area of the Gulf of Mexico because the agency wants to further encourage deep gas exploration.

"MMS learned from some companies that the period MMS was using to grant suspensions of operations for exploration beneath salt sheets at ultradeep depths (greater than 25,000 ft) was very likely to be inadequate," said MMS Gulf of Mexico Regional Director Chris Oynes.

"The suspension, which extends the term of the lease, is necessary to allow adequate time to conduct geophysical evaluations to find a drillable target," Oynes said.

MMS officials will determine how long the lease deadline can be extended on a case-by-case basis.

To be eligible for a suspension, MMS said the lease must have been in its primary term on or before Aug. 1, 2002; the potential target must involve drilling below 25,000 ft TVD subsea; the operator of the lease must also have acquired and interpreted full 3D depth migrated geophysical data beneath the salt sheet and over the entire lease area before the end of the fifth year of the primary term; and the operator must submit a reasonable schedule of work leading to the commencement of drilling.

"MMS believes the ultradeep frontier offers the potential for significant resources, but with accompanied high economic and technological risks," said Oynes. "MMS recognizes the importance of expediting domestic exploration to address the critical national need."

Contact Maureen Lorenzetti at [email protected].