NOIA files FOIA request on gulf decommissioning costs

The National Ocean Industries Association has sent a Freedom of Information Act (FOIA) request to the US Bureau of Safety and Environmental Enforcement seeking information related to the agency’s recently revised estimates for future well plugging and abandonment and platform decommissioning costs in the Gulf of Mexico.

“The FOIA request reinforces industry efforts to obtain vital information being used by BSEE to determine estimates of decommissioning costs,” the trade association said in an Oct. 4 statement. “To date, that information has not been released to the public or to companies attempting to meet new financial assurance/bonding requirements being issued by the Bureau of Ocean Energy Management.”

It said the request seeks to assure transparency regarding the methods used to calculate BSEE’s revised estimates, the accuracy of which industry cannot verify without the supporting documentation.

“BSEE estimates, particularly for facilities in the shallow-water gulf, appear to vary wildly from current decommissioning costs,” the statement continued. “[It] released the revised estimates with little explanation regarding the assumptions and data it relied upon, despite the fact the agency’s own projections for decommissioning liability in the shallow water Gulf are [more than] 100% higher than previous estimates from as recently as 4 months ago.

“In stark contrast, actual costs to perform decommissioning projects have decreased dramatically due to depressed commodity prices, better equipment and execution by operators, and a reduction of overall service costs in the gulf,” it said.

NOIA said several of its members have made exhaustive inquiries to BSEE regarding the assumptions and methodologies supporting the revised estimates, but have not received any meaningful responses. The companies remain willing to work in a collaborative manner with the US Department of the Interior agency to develop an accurate and reliable method for determining decommissioning liability for offshore operators, it indicated.

Contact Nick Snow at

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