July 12, 2010
Shallow water industry also hit by drilling moratorium
Members of the Shallow Water Energy Security Coalition issued the following comments regarding the Department of Interior's new moratorium blocking deepwater drilling in the Gulf of Mexico (GOM) through November 30, 2010.
Randy Stilley, President and Chief Executive Officer of Seahawk Drilling, Inc., noted: "Today, the Department of the Interior announced new deepwater driller suspensions. In the course of the announcement, Interior said shallow water drilling activities can 'continue to move forward' if operations are in compliance with safety and environmental regulations. However, the reality is that permits for shallow water drilling are not proceeding despite the widespread efforts being made by the industry to honor the letter and spirit of new Interior regulatory standards as reflected in Notices to Leasees, or NTLs.
"Part of reason for a lack of permits may be that Interior's BOEM has been vague regarding its compliance expectations under its environmental NTL, resulting in no new permits being granted since that NTL was issued. This is true even for low risk reservoirs with known characteristics. BOEM must be clear in the guidance it offers and stick to it."
Jim Noe, Senior Vice President and General Counsel of Hercules Offshore, also stated: "To date, and despite assurances from the White House and the Interior Department, about one-third of the shallow water fleet has been idled by the application of what can only be called a de facto moratorium. Unless Interior changes course, and matches their action with their rhetoric, another third of the fleet will be idled and thousands more workers will be furloughed within the next few weeks."