Trump administration looks at allowing longer extensions to remote offshore wells

The U.S. government is considering changes to policies for oil companies operating in the offshore Gulf of Mexico that might allow existing platforms to lengthen extensions to remote wells, a U.S. official said on Monday.

Oil companies operate 68 offshore deepwater platforms in the Gulf of Mexico. To keep costs in check, companies often drill new wells within about 25 to 30 miles of these existing platforms, and connect those new wells with what are known as tiebacks.

The U.S. Bureau of Safety and Environmental Enforcement is reviewing policies that limit the length of those tiebacks, director Scott Angelle told Reuters on Monday. More details will be available later this year, he said.

The bureau is considering whether there is “a policy change that can make subsea tiebacks and investment into the Gulf of Mexico bigger, broader and bolder for the next decade,” Angelle said.

Oil production from the U.S. Gulf of Mexico hit an all-time high of more than 2 million barrels per day last year. Production has retreated to about 1.6 million bpd after oil prices crashed earlier this year as demand contracted due to the coronavirus pandemic.

The BSEE is examining utilization of the Gulf’s oil-producing platforms, and whether they are being used as fully as possible, he said.

“The last thing we want to do is have an asset of the American people that is stranded and left behind,” he said.