Secretary’s mandated review of NTL No. 2016-N01 will get more time 

In an announcement on June 22, 2017, BOEM reiterated that Secretary’s Order 3350, issued on May 1, 2017, directed BOEM to “promptly complete a review of Notice to Lessees (NTL) No. 2016-N01 and provide our recommendation on whether to implement this NTL to the Assistant Secretary – Land and Minerals Management (ASLM), Deputy Secretary, and the Counselor to the Secretary for Energy Policy,” Haynes and Boone’s energy attorneys Robert Thibault and Christopher Reagen pointed out in a note to clients today.

In its statement on the prompt NTL review requested by the Secretary of the Interior, BOEM said it is “in the final stages of our review, and has obtained significant industry feedback. We have determined that more time is necessary to work with industry and other interested parties and the NTL implementation timeline will be extended beyond June 30, except in circumstances where there is a substantial risk of nonperformance of the interest holder’s decommissioning liabilities.”

BOEM said it will continue to gather input from all interested parties.

The agency said its goal is “to ensure industry’s continued engagement in developing and implementing a risk management program that enables industry to meet its legal obligations and protects the American taxpayers from shouldering any liability for decommissioning existing or future facilities on the OCS, while recognizing the industry’s current economic realities and concerns.”

“While a significant signal of its continued interest in working with industry participants, BOEM’s announcement also indicates continued slippage in issuing its program for financial assurance with certainty for the industry,” the Haynes and Boone attorneys concluded.

The NTL was issued to operators of offshore oil and gas operations in the U.S. in 2016 under the prior administration. The new administration and Secretary of the Interior took action requiring a formal and prompt review of the new financial assurance requirements. Many industry experts believed the changes to the financial requirements for decommissioning had the potential to cause significant negative impacts the U.S. OCS oil and gas industry.


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