News Post
Industry and BSEE work together to further U.S. offshore development
Recently, at World Oil’s HPHT Drilling, Completion and Production Conference, National Ocean Industries Association (NOIA) President Randall Luthi said in a keynote address that his Washington, D.C.-based lobbying group is committed to providing the oil and gas industry with reliable access to the nation’s government officials. He stressed that NOIA strives to ensure fair regulatory and economic environments for offshore operators.
“A noticeable attitude change occurred immediately after Donald Trump took office,” Luthi continued. “The Trump administration repealed old legislation and re-instated permit requests for new seismic work along the Atlantic Coast. Additionally, White House officials have been in contact with the organization continually since the new administration took office, something that seldom happened during the Obama era.”
Since the vast majority of the world’s HPHT work takes place in the Gulf of Mexico (GOM), Luthi said “to increase offshore activity, operators need to focus on reducing costs, embracing competition and have the confidence that deep water will be able to compete with U.S. onshore shale fields within the next five years.” Deepwater break-even costs have declined steadily since 2014, and the major GOM players have said that the offshore can thrive again, if crude prices remain above $65/bbl. EIA estimates that new offshore acreage, made available by Interior Secretary Ryan Zinke, contains recoverable reserves of up to 45 Bbbl of oil and 185 Tcf of natural gas.
NOIA is working with the Trump administration on dialing back regulations without reducing safety or environmental benefits. Also, officials are considering reducing the federal royalty rate. The rationale is that promoting an increase in drilling activity will boost revenue more than raising the fee that operators pay on each barrel of crude that they produce. There also is relief being considered for end-of-well-life and the well-control rule.
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