BOEMRE Issues Permit No. 4, This One To ExxonMobil

Yesterday the Bureau of Ocean Energy, Management, Regulation and Enforcement issued its fourth deepwater drilling permit in the Gulf of Mexico, an indication that the agency is finally beginning to grind its wheels in resurrecting the domestic offshore oil exploration business.

“Today’s permit approval is the fourth to be approved in the month since the industry confirmed its capability to contain a deepwater loss of well control and blowout. We will continue to review and approve applications that demonstrate the ability to operate safely in deep water,” said BOEMRE Director Michael R. Bromwich. “As we have seen, the rate of deepwater permit applications is increasing, which reflects growing confidence in the industry that it understands and can comply with the applicable requirements, including the containment requirement. We expect additional permit approvals in the near future.”

But despite BOEMRE’s boasting of a milestone in issuing ExxonMobil a permit, there isn’t a substantive difference  between it and previous permits given to Noble Energy, BHP Billiton and ATP Oil & Gas.

The approved permit isn’t new. It’s a revised permit to drill a new well for ExxonMobil’s Well #3 in Keathley Canyon Block 919 in 6,941 ft. water depth, approximately 240 miles off the Louisiana coastline, south of Lafayette. But while the well is new, in the sense that it wasn’t actually drilled, the operator did have a rig on-location and an approved Permit to Drill a New Well when activities were suspended due to the temporary drilling suspensions imposed following the Deepwater Horizon oil spill. That was 11 months ago.

One aspect of the new permit that is new is the fact that it’s the first one including the use of the Marine Well Containment Company (MWCC) containment system as its containment solution. MWCC is the industry consortium headed up by ExxonMobil last year to satisfy BOEMRE’s requirement that, before it would allow any new deepwater drilling, a system to handle a deep-sea well blowout. The previous three permits had been accompanied by a deal to use Helix Offshore’s competing containment system.

Bromwich, at a conference in New Orleans on Tuesday – to our knowledge his boss Ken Salazar hasn’t made it to the Crescent City since federal judge Martin Feldman found him in contempt of court in a case involving the Interior Department’s moratorium on drilling – told the Times-Picayune BOEMRE is working on what sounds like an ad hoc schedule of permit approvals.

During a break at a conference in New Orleans on Tuesday, Bromwich acknowledged that while there is “a low probability” of another incident occurring to the scale of the blowout of BP’s Macondo well last year, “I think we can only draw a limited comfort from that, because low probability events happen occasionally.”

Maintaining that the agency has “tried very hard to do this strictly on the merits,” Bromwich said the rate at which permits are issued will depend on “the individual analysis that’s being done with respect to each (application) that’s under consideration.”

“I don’t know what the pace will be going forward,” Bromwich said in a meeting with reporters, noting that he expected additional permits would be approved in the next week or so. “We will turn them out and approve them as they’re ready.”

Industry representatives claim over 100 deepwater permits await approval, though BOEMRE has publicly stated the number is far less.



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