BOEM proposes reduction of assurance costs

ALAN BAILEY

for Petroleum News

The Bureau of Ocean Energy Management is proposing regulation updates that will reduce the cost of financial assurance for companies involved in offshore oil and gas production on the federal outer continental shelf. Companies are required to hold assurance that will cover the cost of remediating offshore sites when offshore facilities including platforms and pipelines are decommissioned.

The Department of the Interior says that the proposed changes will roll back requirements from a 2024 rule that in total required companies to set aside about $6.9 billion in additional supplemental financial assurance. About $6 billion of that total cost would have fallen on small businesses, Interior said.

- For too long, Washington red tape has strangled American energy producers and held back small businesses,- said Interior Secretary Doug Burgum. - President Trump is delivering on his promise to put American workers first, cut burdensome regulations and unleash our vast energy potential.-

The cost reductions would be achieved through a series of changes to the regulations under which the financial assurance is determined. The proposed changes would maintain strong accountability for offshore lease holders under the terms of the Outer Continental Shelf Land Act while reducing financial barriers that have reduced growth, Interior said.

The proposed regulatory changes have been published in the Federal Register with a 60-day public comment period.-ALAN BAILEY