The U.S. Minerals Management Service, the agency that overseas offshore oil and gas activities in federal waters of the United States, has cut industry some regulatory slack in the Gulf of Mexico due to major disruptions caused by the one-two punch of hurricanes Rita and Katrina.
Meanwhile, over half of daily oil production remained shut-in as of Nov. 3, more than two months after offshore operators began evacuating production platforms and drilling rigs ahead of the first storm, MMS said.
The cumulative shut-in oil production from Aug. 26 through Nov. 3 totaled 77.4 million barrels, or a little more than 14 percent of 547.5 million barrels in annual production. During the same period, the cumulative shut-in natural gas production totaled 396.2 billion cubic feet, or 10.85 percent of 3.65 trillion cubic feet in yearly production.
On a daily basis, 52.71 percent or 790,610 barrels of oil production remained shut-in, while 47.27 percent or 4.727 billion cubic feet of natural gas remained shut-in, MMS said.
New Orleans office reopened
On a positive note, MMS has reopened its New Orleans office at 1201 Elmwood Park Blvd., evacuated just prior to the arrival of Katrina, the most destructive hurricane to hit southern Louisiana in recorded history. Most of New Orleans was flooded when several levees that protected the city failed.
“After two months of operating with a reduced staff … we are happy to have all our employees back at work and the majority back in the Elmwood space,” MMS Director Johnnie Burton said Nov. 1.
The MMS Gulf region, with a skeleton staff of around 150 out of 500-plus regular employees, had been working out of Houston, Texas. Because of the extensive damage sustained by the regional office in New Orleans, most MMS employees were prevented from returning to work.
“MMS is committed to stay in the New Orleans area and contribute to the economic revival of the area,” Burton said, adding that MMS is working to secure a new 10-year lease for the Elmwood building and is “working with the property owner to update the building as part of the repairs.”
MMS said all of its regional employees reported for duty as of Oct. 28, with about 350 occupying the first five floors of the Elmwood Towers and a small contingent in a neighboring building. The 150 employees in Houston will remain there until the remaining five, more heavily damaged floors in the Elmwood building are repaired, MMS said.
Gulf director and staff remain in Houston
Gulf Regional Director Chris Oynes and his staff plan to remain in Houston until all repairs to the New Orleans facilities are completed. Day-to-day operations will be handled out of Houston — management oversight of field operations and structural engineering support and oversight for production, including suspensions and field unitization.
The Elmwood Towers in New Orleans is open to the public for the adjudication of oil and gas leases, review of plans, issuance of permits, evaluation of resources, and environmental research studies.
The MMS Gulf regional office has been located in the New Orleans metropolitan area since the agency was created in 1982, and has been housed at the Elmwood Towers building since 1986.
“The return of the Gulf regional office to New Orleans is a clear indication of the federal government’s commitment to the rebuilding of the metropolitan area,” Burton said.
However, general disruption caused by Katrina and Rita has forced MMS to postpone some industry deadlines required by federal regulations.
For one, MMS waived until Jan. 3 industry payment fees for a number of services the agency provides. They include: pipeline right-of-way grant application ($2,350); conversion of lease term pipeline to right-of-way pipeline ($200); pipeline right-of-way assignment ($170); record title/operating rights transfer ($170); and non-required document filing ($25).
“MMS may consider further extending the waiver of the cost recovery fees if its offices in the New Orleans area are not fully operational by Jan. 3,” the agency said in a notice to offshore leaseholders and operators. Additionally, MMS has issued a 60-day extension for the comment period on a proposed rule regarding protection of marine mammals and threatened and endangered species on the U.S. Outer Continental Shelf. Comments were originally due Nov. 7.
“The extension will provide the oil and gas industry with additional time to review and prepare comments as it recovers from damage caused by hurricanes Katrina and Rita,” MMS said.
