The U.S. Minerals Management Service soon will publish a final rule doubling the time to 180 days that offshore operators can take between operations on a lease continued beyond its primary term.
MMS also is publishing a rule continuing a requirement that operators begin exploratory drilling within 5 years on 8-year term leases but pledged to study related data from 8-year leases issued for several years subsequent to 1990.
Cynthia Quarterman, MMS director, said the rule change doubling the time between operations recognizes a need of industry.
"Since most of the easily found offshore resources have been produced, industry is focusing its efforts in deeper waters, on subsalt projects, and other areas of complex geology.
"The additional time provided in this rule allows for better analysis of 3D seismic, geological, geophysical, and engineering data. By striking a balance between encouraging diligent operations and allowing proper time for lessees to evaluate their exploratory and development options, MMS believes that more efficient and expedient production, drilling, and well-reworking operations will result."
Quarterman said the rule will require any drilling or workover program be part of a plan that has as its objective continuous production on the lease. "We intend to closely monitor the actions of lessees to ensure that this objective is met," she declared.
Meeting industry need
She said MMS had proposed in June that it drop the requirement that operators begin exploratory drilling within 5 years on leases with an 8-year term.
"Independent oil companies and drilling contractors opposed that proposal maintaining that the drilling requirement is necessary to ensure diligence. Therefore, we believe it's prudent to analyze data from 8-year leases issued for several years subsequent to 1990, a period of both declining and increasing exploratory drilling."
The rule will also change the 400-900 m water depth margin for 8-year leases to 400-800 m.
"The Deep Water Royalty Relief Act delineated deepwater relief categories of 200, 400, and 800 m. Now the lease terms and royalty relief water depths are consistent with each other," she said.
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