May 28 (Reuters) - The Obama administration is tightening
the reins on offshore drilling companies in the wake of the oil
spill ravaging the Gulf of Mexico.
New deepwater exploratory drilling will be on hold for six months pending the findings and recommendations of a presidential commission investigating the causes of the explosion that sank Transocean's Deepwater Horizon rig leased by BP Plc.
Such a lengthy moratorium could affect future U.S. oil and natural gas output. U.S. Gulf offshore oil operations produced 1.6 million barrels of oil per day in 2009, accounting for 8 percent of U.S. liquid fuel consumption, according to the Energy Information Administration.
In addition to the deepwater drilling moratorium, the Interior Department has also outlined a series of potentially costly new safety rules and standards that oil companies will have to contend with.
DEEPWATER DRILLING MORATORIUM
* The six-month moratorium will apply to all new exploratory drilling at depths more than 500 feet (150 meters).
* 33 exploratory rigs in the Gulf of Mexico will have to stop drilling operations as soon as safely possible and remain out of action for six months.
* Shallow water drilling and wells already in production will be able to go forward under the moratorium.
* As part of the ban, Royal Dutch Shell's proposal to drill exploration wells in the Arctic this summer has been postponed until 2011.
* Upcoming lease sales in the Gulf of Mexico and off Virginia have been canceled.
SAFETY STANDARDS
* Blow-out preventers, BOPs, on floating drilling operations need to certified by an independent third party. The department will also develop formal equipment certification standards for BOPs.
* Within a year BOPs on all operations will be required to have two sets of blind shear rams spaced at least 4 feet apart.
* Subsea BOPs will require remote operated vehicles that are able to close all shear and pipe rams, close choke and kill valves and unlatch the lower marine riser package.
* Interior will develop surface and subsea methods to test capabilities of remotely operated vehicles and BOPs.
* Interior will conduct more in-depth safety inspections that will include witnessing actual tests of BOP equipment.
* Rig operators will be required to undergo a series of procedures and checks before displacing kill-weight drilling fluid from the wellbore.
* All well casing and cement designs for new floating drilling operations will have to be certified by a professional engineer.
* Interior will develop specific cementing requirements.
* Interior will expand safety and training programs for rig workers.
(Reporting by Ayesha Rascoe; Editing by Sofina Mirza-Reid)
((ayesha.rascoe@thomsonreuters.com; +1 202 310 5683; Reuters Messaging: ayesha.rascoe.reuters.com@reuters.net)) Keywords: OIL RIG/MORATORIUM (For help: Click 'Contact Us' in your desk top, click here or call 1-800-738-8377 for Reuters Products and 1-888-463-3383 for Thomson products; For client training: training.americas@thomsonreuters.com ; +1 646-223-5546) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
New deepwater exploratory drilling will be on hold for six months pending the findings and recommendations of a presidential commission investigating the causes of the explosion that sank Transocean's Deepwater Horizon rig leased by BP Plc.
Such a lengthy moratorium could affect future U.S. oil and natural gas output. U.S. Gulf offshore oil operations produced 1.6 million barrels of oil per day in 2009, accounting for 8 percent of U.S. liquid fuel consumption, according to the Energy Information Administration.
In addition to the deepwater drilling moratorium, the Interior Department has also outlined a series of potentially costly new safety rules and standards that oil companies will have to contend with.
DEEPWATER DRILLING MORATORIUM
* The six-month moratorium will apply to all new exploratory drilling at depths more than 500 feet (150 meters).
* 33 exploratory rigs in the Gulf of Mexico will have to stop drilling operations as soon as safely possible and remain out of action for six months.
* Shallow water drilling and wells already in production will be able to go forward under the moratorium.
* As part of the ban, Royal Dutch Shell's proposal to drill exploration wells in the Arctic this summer has been postponed until 2011.
* Upcoming lease sales in the Gulf of Mexico and off Virginia have been canceled.
SAFETY STANDARDS
* Blow-out preventers, BOPs, on floating drilling operations need to certified by an independent third party. The department will also develop formal equipment certification standards for BOPs.
* Within a year BOPs on all operations will be required to have two sets of blind shear rams spaced at least 4 feet apart.
* Subsea BOPs will require remote operated vehicles that are able to close all shear and pipe rams, close choke and kill valves and unlatch the lower marine riser package.
* Interior will develop surface and subsea methods to test capabilities of remotely operated vehicles and BOPs.
* Interior will conduct more in-depth safety inspections that will include witnessing actual tests of BOP equipment.
* Rig operators will be required to undergo a series of procedures and checks before displacing kill-weight drilling fluid from the wellbore.
* All well casing and cement designs for new floating drilling operations will have to be certified by a professional engineer.
* Interior will develop specific cementing requirements.
* Interior will expand safety and training programs for rig workers.
(Reporting by Ayesha Rascoe; Editing by Sofina Mirza-Reid)
((ayesha.rascoe@thomsonreuters.com; +1 202 310 5683; Reuters Messaging: ayesha.rascoe.reuters.com@reuters.net)) Keywords: OIL RIG/MORATORIUM (For help: Click 'Contact Us' in your desk top, click here or call 1-800-738-8377 for Reuters Products and 1-888-463-3383 for Thomson products; For client training: training.americas@thomsonreuters.com ; +1 646-223-5546) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.