BSEE Guidance on Suspensions of Production Requests
The Bureau of Safety and Environmental Enforcement (BSEE) today issued a Notice to Lessees (NTL) highlighting a recent decision by the Director of the Office of Hearings and Appeals (OHA) of the Department of the Interior concerning the rules governing the grant or denial of requests for Suspensions of Production.
The OHA decision upheld the bureau’s requirement that lessees must demonstrate a commitment to produce in order to be eligible for a suspension. Suspensions can be granted to leaseholders to extend a lease past the primary term for oil and gas leases on the Outer Continental Shelf. Typically, a lease will have a primary term of five, eight or 10 years, depending upon water depth. NTLs are tools used by BSEE to provide guidance and clarification concerning regulations that apply to offshore activities.
“BSEE takes its responsibilities as trustee of offshore public lands extremely seriously,” said BSEE Director Michael R. Bromwich. “The energy resources that are located on the Outer Continental Shelf belong to all American taxpayers, and BSEE’s responsibilities include ensuring that public resources are developed in an expeditious and orderly way. The OHA decision highlighted in this NTL underscores the need for lessees to take concrete steps to develop their holdings in a manner that is consistent with the terms of their lease agreements.”
The NTL directs lessees to the decision on the OHA web site: http://www.oha.doi.gov:8080/isysquery/72006544-c92f-4821-8816-282ed28ffa9c/1/doc/42OHA261%20STATOIL%20GULF%20OF%20MEXICO%20LLC%205-31-11.pdf#xml=http://www.oha.doi.gov:8080/isysquery/72006544-c92f-4821-8816-282ed28ffa9c/1/hilite/.
The NTL can be found at: http://www.bsee.gov/Regulations-and-Guidance/Notices-to-Lessees-and-Operators.aspx.