Confusion over new GOM drilling permits

The Obama Administration’s six-month moratorium on deepwater outer continental shelf drilling, announced May 27, allowed drilling to continue in water less than 500 feet and the U.S. Minerals Management Service duly issued two shallow-water drilling permits for the Gulf of Mexico on June 2. But, following an outcry by environmental groups against new offshore drilling, the agency rescinded the permits within 24 hours, according to a June 4 story in the Wall Street Journal.

Oil price futures on the New York Mercantile Exchange rose on June 3 amid concerns about tightening oil supplies, the Wall Street Journal said.

And the MMS action prompted the National Ocean Industries Association to send a letter to acting MMS Director Robert Abbey, expressing concern about the apparent shallow-water drilling restrictions and requesting guidance on new offshore drilling safety measures — Bandon Oil and Gas, one of the companies to have a new permit issued and then withdrawn, is a NOIA member, Nicolette Nye, NOIA spokeswoman, told Petroleum News June 14.

But MMS has now re-instated Bandon’s drilling permit, Nye said. And Tim Duncan, senior vice president for business developments for Phoenix Exploration Co., the other company to have a new drilling permit rescinded, told Petroleum News that his company’s permit had also been restored.

Phoenix is now ensuring that it meets new offshore drilling safety stipulations specified by MMS in a notice to lessees that the agency issued on June 8, Duncan said.

—Alan Bailey