[Title 30 CFR ]
[Code of Federal Regulations (annual edition) - July 1, 2018 Edition]
[From the U.S. Government Publishing Office]
[[Page i]]
Title 30
Mineral Resources
________________________
Parts 200 to 699
Revised as of July 1, 2018
Containing a codification of documents of general
applicability and future effect
As of July 1, 2018
Published by the Office of the Federal Register
National Archives and Records Administration as a
Special Edition of the Federal Register
[[Page ii]]
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[[Page iii]]
Table of contents
Page
Explanation................................................. v
Title 30:
Chapter II--Bureau of Safety and Environmental
Enforcement, Department of the Interior 3
Chapter IV--Geological Survey, Department of the
Interior 335
Chapter V--Bureau of Ocean Energy Management,
Department of the Interior 347
Finding Aids:
Table of CFR Titles and Chapters........................ 635
Alphabetical List of Agencies Appearing in the CFR...... 655
List of CFR Sections Affected........................... 665
[[Page iv]]
----------------------------
Cite this Code: CFR
To cite the regulations in
this volume use title,
part and section number.
Thus, 30 CFR 203.0 refers
to title 30, part 203,
section 0.
----------------------------
[[Page v]]
EXPLANATION
The Code of Federal Regulations is a codification of the general and
permanent rules published in the Federal Register by the Executive
departments and agencies of the Federal Government. The Code is divided
into 50 titles which represent broad areas subject to Federal
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parts covering specific regulatory areas.
Each volume of the Code is revised at least once each calendar year
and issued on a quarterly basis approximately as follows:
Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1
The appropriate revision date is printed on the cover of each
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LEGAL STATUS
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collection request.
[[Page vi]]
Many agencies have begun publishing numerous OMB control numbers as
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[[Page vii]]
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Oliver A. Potts,
Director,
Office of the Federal Register
July 1, 2018
[[Page ix]]
THIS TITLE
Title 30--Mineral Resources is composed of three volumes. The parts
in these volumes are arranged in the following order: parts 1--199,
parts 200--699, and part 700 to end. The contents of these volumes
represent all current regulations codified under this title of the CFR
as of July 1, 2018.
For this volume, Cheryl E. Sirofchuck was Chief Editor. The Code of
Federal Regulations publication program is under the direction of John
Hyrum Martinez, assisted by Stephen J. Frattini.
[[Page 1]]
TITLE 30--MINERAL RESOURCES
(This book contains parts 200 to 699)
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Part
chapter ii--Bureau of Safety and Environmental Enforcement,
Department of the Interior................................ 203
chapter iv--Geological Survey, Department of the Interior... 401
chapter v--Bureau of Ocean Energy Management, Department of
the Interior.............................................. 519
[[Page 3]]
CHAPTER II--BUREAU OF SAFETY AND ENVIRONMENTAL ENFORCEMENT, DEPARTMENT
OF THE INTERIOR
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SUBCHAPTER A--MINERALS REVENUE MANAGEMENT
Part Page
200-202
[Reserved]
203 Relief or reduction in royalty rates........ 5
219
[Reserved]
SUBCHAPTER B--OFFSHORE
250 Oil and gas and sulphur operations in the
Outer Continental Shelf................. 44
251 Geological and geophysical (G&G)
explorations of the Outer Continental
Shelf................................... 286
252 Outer Continental Shelf (OCS) Oil and Gas
Information Program..................... 291
253
[Reserved]
254 Oil-spill response requirements for
facilities located seaward of the coast
line.................................... 296
256 Leasing of sulphur or oil and gas in the
Outer Continental Shelf................. 311
259-260
[Reserved]
270 Nondiscrimination in the Outer Continental
Shelf................................... 313
280 Prospecting for minerals other than oil,
gas, and sulphur on the Outer
Continental Shelf....................... 315
281
[Reserved]
282 Operations in the Outer Continental Shelf
for minerals other than oil, gas, and
sulphur................................. 316
285
[Reserved]
SUBCHAPTER C--APPEALS
290 Appeal procedures........................... 327
291 Open and nondiscriminatory access to oil and
gas pipelines under the Outer
Continental Shelf Lands Act............. 328
292-299
[Reserved]
[[Page 5]]
SUBCHAPTER A_MINERALS REVENUE MANAGEMENT
PARTS 200 202 [RESERVED]
PART 203_RELIEF OR REDUCTION IN ROYALTY RATES--Table of Contents
Subpart A_General Provisions
Sec.
203.0 What definitions apply to this part?
203.1 What is BSEE's authority to grant royalty relief?
203.2 How can I obtain royalty relief?
203.3 Do I have to pay a fee to request royalty relief?
203.4 How do the provisions in this part apply to different types of
leases and projects?
203.5 What is BSEE's authority to collect information?
Subpart B_OCS Oil, Gas, and Sulfur General
Royalty Relief for Drilling Ultra-Deep Wells on Leases Not Subject to
Deep Water Royalty Relief
203.30 Which leases are eligible for royalty relief as a result of
drilling a phase 2 or phase 3 ultra-deep well?
203.31 If I have a qualified phase 2 or qualified phase 3 ultra-deep
well, what royalty relief would that well earn for my lease?
203.32 What other requirements or restrictions apply to royalty relief
for a qualified phase 2 or phase 3 ultra-deep well?
203.33 To which production do I apply the RSV earned by qualified phase
2 and phase 3 ultra-deep wells on my lease or in my unit?
203.34 To which production may an RSV earned by qualified phase 2 and
phase 3 ultra-deep wells on my lease not be applied?
203.35 What administrative steps must I take to use the RSV earned by a
qualified phase 2 or phase 3 ultra-deep well?
203.36 Do I keep royalty relief if prices rise significantly?
Royalty Relief for Drilling Deep Gas Wells on Leases Not Subject to Deep
Water Royalty Relief
203.40 Which leases are eligible for royalty relief as a result of
drilling a deep well or a phase 1 ultra-deep well?
203.41 If I have a qualified deep well or a qualified phase 1 ultra-deep
well, what royalty relief would my lease earn?
203.42 What conditions and limitations apply to royalty relief for deep
wells and phase 1 ultra-deep wells?
203.43 To which production do I apply the RSV earned from qualified deep
wells or qualified phase 1 ultra-deep wells on my lease?
203.44 What administrative steps must I take to use the royalty
suspension volume?
203.45 If I drill a certified unsuccessful well, what royalty relief
will my lease earn?
203.46 To which production do I apply the royalty suspension supplements
from drilling one or two certified unsuccessful wells on my
lease?
203.47 What administrative steps do I take to obtain and use the royalty
suspension supplement?
203.48 Do I keep royalty relief if prices rise significantly?
203.49 May I substitute the deep gas drilling provisions in this part
for the deep gas royalty relief provided in my lease terms?
Royalty Relief for End-of-Life Leases
203.50 Who may apply for end-of-life royalty relief?
203.51 How do I apply for end-of-life royalty relief?
203.52 What criteria must I meet to get relief?
203.53 What relief will BSEE grant?
203.54 How does my relief arrangement for an oil and gas lease operate
if prices rise sharply?
203.55 Under what conditions can my end-of-life royalty relief
arrangement for an oil and gas lease be ended?
203.56 Does relief transfer when a lease is assigned?
Royalty Relief for Pre-Act Deep Water Leases and for Development and
Expansion Projects
203.60 Who may apply for royalty relief on a case-by-case basis in deep
water in the Gulf of Mexico or offshore of Alaska?
203.61 How do I assess my chances for getting relief?
203.62 How do I apply for relief?
203.63 Does my application have to include all leases in the field?
203.64 How many applications may I file on a field or a development
project?
203.65 How long will BSEE take to evaluate my application?
203.66 What happens if BSEE does not act in the time allowed?
203.67 What economic criteria must I meet to get royalty relief on an
authorized field or project?
203.68 What pre-application costs will BSEE consider in determining
economic viability?
[[Page 6]]
203.69 If my application is approved, what royalty relief will I
receive?
203.70 What information must I provide after BSEE approves relief?
203.71 How does BSEE allocate a field's suspension volume between my
lease and other leases on my field?
203.72 Can my lease receive more than one suspension volume?
203.73 How do suspension volumes apply to natural gas?
203.74 When will BSEE reconsider its determination?
203.75 What risk do I run if I request a redetermination?
203.76 When might BSEE withdraw or reduce the approved size of my
relief?
203.77 May I voluntarily give up relief if conditions change?
203.78 Do I keep relief approved by BSEE under this part for my lease,
unit or project if prices rise significantly?
203.79 How do I appeal BSEE's decisions related to royalty relief for a
deepwater lease or a development or expansion project?
203.80 When can I get royalty relief if I am not eligible for royalty
relief under other sections in the subpart?
Required Reports
203.81 What supplemental reports do royalty-relief applications require?
203.82 What is BSEE's authority to collect this information?
203.83 What is in an administrative information report?
203.84 What is in a net revenue and relief justification report?
203.85 What is in an economic viability and relief justification report?
203.86 What is in a G&G report?
203.87 What is in an engineering report?
203.88 What is in a production report?
203.89 What is in a cost report?
203.90 What is in a fabricator's confirmation report?
203.91 What is in a post-production development report?
Subpart C--Federal and Indian Oil [Reserved]
Subpart D--Federal and Indian Gas [Reserved]
Subpart E--Solid Minerals, General [Reserved]
Subpart F [Reserved]
Subpart G--Other Solid Minerals [Reserved]
Subpart H--Geothermal Resources [Reserved]
Subpart I--OCS Sulfur [Reserved]
Authority: 25 U.S.C. 396 et seq.; 25 U.S.C. 396a et seq.; 25 U.S.C.
2101 et seq.; 30 U.S.C. 181 et seq.; 30 U.S.C. 351 et seq.; 30 U.S.C.
1001 et seq.; 30 U.S.C. 1701 et seq.; 31 U.S.C. 9701; 42 U.S.C. 15903-
15906; 43 U.S.C. 1301 et seq.; 43 U.S.C. 1331 et seq.; and 43 U.S.C.
1801 et seq.
Source: 76 FR 64462, Oct. 18, 2011, unless otherwise noted.
Subpart A_General Provisions
Sec. 203.0 What definitions apply to this part?
Authorized field means a field:
(1) Located in a water depth of at least 200 meters and in the Gulf
of Mexico (GOM) west of 87 degrees, 30 minutes West longitude;
(2) That includes one or more pre-Act leases; and
(3) From which no current pre-Act lease produced, other than test
production, before November 28, 1995.
Certified unsuccessful well means an original well or a sidetrack
with a sidetrack measured depth (i.e., length) of at least 10,000 feet,
on your lease that:
(1) You begin drilling on or after March 26, 2003, and before May 3,
2009, on a lease that is located in water partly or entirely less than
200 meters deep and that is not a non-converted lease, or on or after
May 18, 2007, and before May 3, 2013, on a lease that is located in
water entirely more than 200 meters and entirely less than 400 meters
deep;
(2) You begin drilling before your lease produces gas or oil from a
well with a perforated interval the top of which is at least 18,000 feet
true vertical depth subsea (TVD SS), (i.e., below the datum at mean sea
level);
(3) You drill to at least 18,000 feet TVD SS with a target reservoir
on your lease, identified from seismic and related data, deeper than
that depth;
(4) Fails to meet the producibility requirements of 30 CFR part 550,
subpart A, and does not produce gas or oil, or meets those producibility
requirements and Bureau of Ocean Energy Management (BOEM) agrees it is
not commercially producible; and
(5) For which you have provided the notices and information required
under Sec. 203.47.
[[Page 7]]
Complete application means an original and two copies of the six
reports consisting of the data specified in Sec. Sec. 203.81, 203.83,
and 203.85 through 203.89, along with one set of digital information,
which Bureau of Safety and Environmental Enforcement (BSEE) has reviewed
and found complete.
Deep well means either an original well or a sidetrack with a
perforated interval the top of which is at least 15,000 feet TVD SS and
less than 20,000 feet TVD SS. A deep well subsequently re-perforated at
less than 15,000 feet TVD SS in the same reservoir is still a deep well.
Determination means the binding decision by BSEE on whether your
field qualifies for relief or how large a royalty-suspension volume must
be to make the field economically viable.
Development project means a project to develop one or more oil or
gas reservoirs located on one or more contiguous leases that have had no
production (other than test production) before the current application
for royalty relief and are either:
(1) Located in a planning area offshore Alaska; or
(2) Located in the GOM in a water depth of at least 200 meters and
wholly west of 87 degrees, 30 minutes West longitude, and were issued in
a sale held after November 28, 2000.
Draft application means the preliminary set of information and
assumptions you submit to seek a nonbinding assessment on whether a
field could be expected to qualify for royalty relief.
Eligible lease means a lease that:
(1) Is issued as part of an OCS lease sale held after November 28,
1995, and before November 28, 2000;
(2) Is located in the Gulf of Mexico in water depths of 200 meters
or deeper;
(3) Lies wholly west of 87 degrees, 30 minutes West longitude; and
(4) Is offered subject to a royalty suspension volume.
Expansion project means a project that meets the following
requirements:
(1) You must propose the project in a (BOEM) Development and
Production Plan, a BOEM Development Operations Coordination Document
(DOCD), or a BOEM Supplement to a DOCD, approved by the Secretary of the
Interior after November 28, 1995.
(2) The project must be located on either:
(i) A pre-Act lease in the GOM, or a lease in the GOM issued in a
sale held after November 28, 2000, located wholly west of 87 degrees, 30
minutes West longitude; or
(ii) A lease in a planning area offshore Alaska.
(3) On a pre-Act lease in the GOM, the project:
(i) Must significantly increase the ultimate recovery of resources
from one or more reservoirs that have not previously produced (extending
recovery from reservoirs already in production does not constitute a
significant increase); and
(ii) Must involve a substantial capital investment (e.g., fixed-leg
platform, subsea template and manifold, tension-leg platform, multiple
well project, etc.).
(4) For a lease issued in a planning area offshore Alaska, or in the
GOM after November 28, 2000, the project must involve a new well drilled
into a reservoir that has not previously produced.
(5) On a lease in the GOM, the project must not include a reservoir
the production from which an RSV under Sec. Sec. 203.30 through 203.36
or Sec. Sec. 203.40 through 203.48 would be applied.
Fabrication (or start of construction) means evidence of an
irreversible commitment to a concept and scale of development. Evidence
includes copies of a binding contract between you (as applicant) and a
fabrication yard, a letter from a fabricator certifying that continuous
construction has begun, and a receipt for the customary down payment.
Field means an area consisting of a single reservoir or multiple
reservoirs all grouped on, or related to, the same general geological
structural feature or stratigraphic trapping condition. Two or more
reservoirs may be in a field, separated vertically by intervening
impervious strata or laterally by local geologic barriers, or both.
Lease means a lease or unit.
New production means any production from a current pre-Act lease
from which no royalties are due on production, other than test
production, before November 28, 1995. Also, it means any
[[Page 8]]
additional production resulting from new lease-development activities on
a lease issued in a sale after November 28, 2000, or a current pre-Act
lease under a BOEM DOCD or a BOEM Supplement approved by the Secretary
of the Interior after November 28, 1995.
Nonbinding assessment means an opinion by BSEE of whether your field
could qualify for royalty relief. It is based on your draft application
and does not entitle the field to relief.
Non-converted lease means a lease located partly or entirely in
water less than 200 meters deep issued in a lease sale held after
January 1, 2001, and before January 1, 2004, whose original lease terms
provided for an RSV for deep gas production and the lessee has not
exercised the option under Sec. 203.49 to replace the lease terms for
royalty relief with those in Sec. 203.0 and Sec. Sec. 203.40 through
203.48.
Original well means a well that is drilled without utilizing an
existing wellbore. An original well includes all sidetracks drilled from
the original wellbore either before the drilling rig moves off the well
location or after a temporary rig move that BSEE agrees was forced by a
weather or safety threat and drilling resumes within 1 year. A bypass
from an original well (e.g., drilling around material blocking the hole
or to straighten crooked holes) is part of the original well.
Participating area means that part of the unit area that BSEE
determines is reasonably proven by drilling and completion of producible
wells, geological and geophysical information, and engineering data to
be capable of producing hydrocarbons in paying quantities.
Performance conditions mean minimum conditions you must meet, after
we have granted relief and before production begins, to remain qualified
for that relief. If you do not meet each one of these performance
conditions, we consider it a change in material fact significant enough
to invalidate our original evaluation and approval.
Phase 1 ultra-deep well means an ultra-deep well on a lease that is
located in water partly or entirely less than 200 meters deep for which
drilling began before May 18, 2007, and that begins production before
May 3, 2009, or that meets the requirements to be a certified
unsuccessful well.
Phase 2 ultra-deep well means an ultra-deep well for which drilling
began on or after May 18, 2007; and that either meets the requirements
to be a certified unsuccessful well or that begins production:
(1) Before the date which is 5 years after the lease issuance date
on a non-converted lease; or
(2) Before May 3, 2009, on all other leases located in water partly
or entirely less than 200 meters deep; or
(3) Before May 3, 2013, on a lease that is located in water entirely
more than 200 meters and entirely less than 400 meters deep.
Phase 3 ultra-deep well means an ultra-deep well for which drilling
began on or after May 18, 2007, and that begins production:
(1) On or after the date which is 5 years after the lease issuance
date on a non-converted lease; or
(2) On or after May 3, 2009, on all other leases located in water
partly or entirely less than 200 meters deep; or
(3) On or after May 3, 2013, on a lease that is located in water
entirely more than 200 meters and entirely less than 400 meters deep.
Pre-Act lease means a lease that:
(1) Results from a sale held before November 28, 1995;
(2) Is located in the GOM in water depths of 200 meters or deeper;
and
(3) Lies wholly west of 87 degrees, 30 minutes West longitude.
Production means all oil, gas, and other relevant products you save,
remove, or sell from a tract or those quantities allocated to your tract
under a unitization formula, as measured for the purposes of determining
the amount of royalty payable to the United States.
Project means any activity that requires at least a permit to drill.
Qualified deep well means:
(1) On a lease that is located in water partly or entirely less than
200 meters deep that is not a non-converted lease, a deep well for which
drilling began on or after March 26, 2003, that produces natural gas
(other than test production), including gas associated with oil
production, before May 3, 2009, and for
[[Page 9]]
which you have met the requirements prescribed in Sec. 203.44;
(2) On a non-converted lease, a deep well that produces natural gas
(other than test production) before the date which is 5 years after the
lease issuance date from a reservoir that has not produced from a deep
well on any lease; or
(3) On a lease that is located in water entirely more than 200
meters but entirely less than 400 meters deep, a deep well for which
drilling began on or after May 18, 2007, that produces natural gas
(other than test production), including gas associated with oil
production before May 3, 2013, and for which you have met the
requirements prescribed in Sec. 203.44.
Qualified ultra-deep well means:
(1) On a lease that is located in water partly or entirely less than
200 meters deep that is not a non-converted lease, an ultra-deep well
for which drilling began on or after March 26, 2003, that produces
natural gas (other than test production), including gas associated with
oil production, and for which you have met the requirements prescribed
in Sec. 203.35 or Sec. 203.44, as applicable; or
(2) On a lease that is located in water entirely more than 200
meters and entirely less than 400 meters deep, or on a non-converted
lease, an ultra-deep well for which drilling began on or after May 18,
2007, that produces natural gas (other than test production), including
gas associated with oil production, and for which you have met the
requirements prescribed in Sec. 203.35.
Qualified well means either a qualified deep well or a qualified
ultra-deep well.
Redetermination means our reconsideration of our determination on
royalty relief because you request it after:
(1) We have rejected your application;
(2) We have granted relief but you want a larger suspension volume;
(3) We withdraw approval; or
(4) You renounce royalty relief.
Renounce means action you take to give up relief after we have
granted it and before you start production.
Reservoir means an underground accumulation of oil or natural gas,
or both, characterized by a single pressure system and segregated from
other such accumulations.
Royalty suspension (RS) lease means a lease that:
(1) Is issued as part of an OCS lease sale held after November 28,
2000;
(2) Is in locations or planning areas specified in a particular
Notice of OCS Lease Sale offering that lease; and
(3) Is offered subject to a royalty suspension specified in a Notice
of OCS Lease Sale published in the Federal Register.
Royalty suspension supplement (RSS) means a royalty suspension
volume resulting from drilling a certified unsuccessful well that is
applied to future natural gas and oil production generated at any
drilling depth on, or allocated under a BSEE-approved unit agreement to,
the same lease.
Royalty suspension volume (RSV) means a volume of production from a
lease that is not subject to royalty under the provisions of this part.
Sidetrack means, for the purpose of this subpart, a well resulting
from drilling an additional hole to a new objective bottom-hole location
by leaving a previously drilled hole. A sidetrack also includes drilling
a well from a platform slot reclaimed from a previously drilled well or
re-entering and deepening a previously drilled well. A bypass from a
sidetrack (e.g., drilling around material blocking the hole, or to
straighten crooked holes) is part of the sidetrack.
Sidetrack measured depth means the actual distance or length in feet
a sidetrack is drilled beginning where it exits a previously drilled
hole to the bottom hole of the sidetrack, that is, to its total depth.
Sunk costs for an authorized field means the after-tax eligible
costs that you (not third parties) incur for exploration, development,
and production from the spud date of the first discovery on the field to
the date we receive your complete application for royalty relief. The
discovery well must be qualified as producible under 30 CFR part 550,
subpart A. Sunk costs include the rig mobilization and material costs
for the discovery well that you incurred before its spud date.
[[Page 10]]
Sunk costs for an expansion or development project means the after-
tax eligible costs that you (not third parties) incur for only the first
well that encounters hydrocarbons in the reservoir(s) included in the
application and that meets the producibility requirements under 30 CFR
part 550, subpart A on each lease participating in the application. Sunk
costs include rig mobilization and material costs for the discovery
wells that you incurred before their spud dates.
Ultra-deep well means either an original well or a sidetrack
completed with a perforated interval the top of which is at least 20,000
feet TVD SS. An ultra-deep well subsequently re-perforated less than
20,000 feet TVD SS in the same reservoir is still an ultra-deep well.
Withdraw means action we take on a field that has qualified for
relief if you have not met one or more of the performance conditions.
Sec. 203.1 What is BSEE's authority to grant royalty relief?
The Outer Continental Shelf (OCS) Lands Act, 43 U.S.C. 1337, as
amended by the OCS Deep Water Royalty Relief Act (DWRRA), Public Law
104-58 and the Energy Policy Act of 2005, Public Law 109-058 authorizes
us to grant royalty relief in four situations.
(a) Under 43 U.S.C. 1337(a)(3)(A), we may reduce or eliminate any
royalty or a net profit share specified for an OCS lease to promote
increased production.
(b) Under 43 U.S.C. 1337(a)(3)(B), we may reduce, modify, or
eliminate any royalty or net profit share to promote development,
increase production, or encourage production of marginal resources on
certain leases or categories of leases. This authority is restricted to
leases in the GOM that are west of 87 degrees, 30 minutes West
longitude, and in the planning areas offshore Alaska.
(c) Under 43 U.S.C. 1337(a)(3)(C), we may suspend royalties for
designated volumes of new production from any lease if:
(1) Your lease is in deep water (water at least 200 meters deep);
(2) Your lease is in designated areas of the GOM (west of 87
degrees, 30 minutes West longitude);
(3) Your lease was acquired in a lease sale held before the DWRRA
(before November 28, 1995);
(4) We find that your new production would not be economic without
royalty relief; and
(5) Your lease is on a field that did not produce before enactment
of the DWRRA, or if you propose a project to significantly expand
production under a Development Operations Coordination Document (DOCD)
or a supplementary DOCD, that the Bureau of Ocean Energy Management
(BOEM) approved after November 28, 1995.
(d) Under 42 U.S.C. 15904-15905, we may suspend royalties for
designated volumes of gas production from deep and ultra-deep wells on a
lease if:
(1) Your lease is in shallow water (water less than 400 meters deep)
and you produce from an ultra-deep well (top of the perforated interval
is at least 20,000 feet TVD SS) or your lease is in waters entirely more
than 200 meters and entirely less than 400 meters deep and you produce
from a deep well (top of the perforated interval is at least 15,000 feet
TVD SS);
(2) Your lease is in the designated area of the GOM (wholly west of
87 degrees, 30 minutes west longitude); and
(3) Your lease is not eligible for deep water royalty relief.
Sec. 203.2 How can I obtain royalty relief?
We may reduce or suspend royalties for Outer Continental Shelf (OCS)
leases or projects that meet the criteria in the following table.
----------------------------------------------------------------------------------------------------------------
Then we may grant you . . .
If you have a lease . . . And if you . . .
----------------------------------------------------------------------------------------------------------------
(a) With earnings that cannot sustain Would abandon otherwise potentially A reduced royalty rate on
production (i.e., End-of-life lease), recoverable resources but seek to current monthly production
increase production by operating beyond and a higher royalty rate
the point at which the lease is on additional monthly
economic under the existing royalty production (see Sec. Sec.
rate, 203.50 through 203.56).
[[Page 11]]
(b) Located in a designated GOM deep Propose an expansion project and can A royalty suspension for a
water area (i.e., 200 meters or greater) demonstrate your project is uneconomic minimum production volume
and acquired in a lease sale held before without royalty relief, plus any additional
November 28, 1995, or after November 28, production large enough to
2000, make the project economic
(see Sec. Sec. 203.60
through 203.79).
(c) Located in a designated GOM deep Are on a field from which no current pre- A royalty suspension for a
water area and acquired in a lease sale Act lease produced (other than test minimum production volume
held before November 28, 1995 (Pre-Act production) before November 28, 1995, plus any additional volume
lease), (Authorized field,) needed to make the field
economic (see Sec. Sec.
203.60 through 203.79).
(d) Located in a designated GOM deep Propose a development project and can A royalty suspension for a
water area and acquired in a lease sale demonstrate that the suspension volume, minimum production volume
held after November 28, 2000, if any, for your lease is not enough to plus any additional volume
make development economic, needed to make your
project economic (see Sec.
Sec. 203.60 through
203.79).
(e) Where royalty relief would recover Are not eligible to apply for end-of- A royalty modification in
significant additional resources or, life or deep water royalty relief, but size, duration, or form
offshore Alaska or in certain areas of show us you meet certain eligibility that makes your lease or
the GOM, would enable development, conditions, project economic (see Sec.
203.80).
(f) Located in a designated GOM shallow Drill a deep well on a lease that is not A royalty suspension for a
water area and acquired in a lease sale eligible for deep water royalty relief volume of gas produced
held before January 1, 2001, or after and you have not previously produced from successful deep and
January 1, 2004, or have exercised an oil or gas from a deep well or an ultra- ultra-deep wells, or, for
option to substitute for royalty relief deep well, certain unsuccessful deep
in your lease terms, and ultra-deep wells, a
smaller royalty suspension
for a volume of gas or oil
produced by all wells on
your lease (see Sec. Sec.
203.40 through 203.49).
(g) Located in a designated GOM shallow Drill and produce gas from an ultra-deep A royalty suspension for a
water area, well on a lease that is not eligible volume of gas produced
for deep water royalty relief and you from successful ultra-deep
have not previously produced oil or gas and deep wells on your
from an ultra-deep well, lease (see Sec. Sec.
203.30 through 203.36).
(h) Located in planning areas offshore Propose an expansion project or propose A royalty suspension for a
Alaska, a development project and can minimum production volume
demonstrate that the project is plus any additional volume
uneconomic without relief or that the needed to make your
suspension volume, if any, for your project economic (see Sec.
lease is not enough to make development Sec. 203.60, 203.62,
economic, 203.67 through 203.70,
203.73, and 203.76 through
203.79).
----------------------------------------------------------------------------------------------------------------
Sec. 203.3 Do I have to pay a fee to request royalty relief?
When you submit an application or ask for a preview assessment, you
must include a fee to reimburse us for our costs of processing your
application or assessment. Federal policy and law require us to recover
the cost of services that confer special benefits to identifiable non-
Federal recipients. The Independent Offices Appropriation Act (31 U.S.C.
9701), Office of Management and Budget Circular A-25, and the Omnibus
Appropriations Bill (Pub. L. 104-134, 110 Stat. 1321, April 26, 1996)
authorize us to collect these fees.
(a) We will specify the necessary fees for each of the types of
royalty relief applications and possible BSEE audits in a Notice to
Lessees. We will periodically update the fees to reflect changes in
costs, as well as provide other information necessary to administer
royalty relief.
(b) You must file all payments electronically through the Fees for
Services page on the BSEE Web site at http://www.bsee.gov, and you must
include a copy of the Pay.gov confirmation receipt page with your
application or assessment.
[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 36148, June 6, 2016]
Sec. 203.4 How do the provisions in this part apply to different types
of leases and projects?
The tables in this section summarize the similar application and
approval provisions for the discretionary end-of-life and deep water
royalty relief programs in Sec. Sec. 203.50 to 203.91. Because royalty
relief for deep gas on leases not subject to deep water royalty relief,
as provided for under Sec. Sec. 203.40 to 203.48, does not involve an
application, its provisions do not parallel the other two royalty relief
programs and are not summarized in this section.
[[Page 12]]
(a) We require the information elements indicated by an X in the
following table and described in Sec. Sec. 203.51, 203.62, and 203.81
through 203.89 for applications for royalty relief.
----------------------------------------------------------------------------------------------------------------
Deep water
End-of-life -----------------------------------------
Information elements lease Expansion Pre-act Development
project lease project
----------------------------------------------------------------------------------------------------------------
(1) Administrative information report................. X X X X
(2) Net revenue and relief justification report X ........... ...........
(prescribed format)..................................
(3) Economic viability and relief justification report .............. X X X
(Royalty Suspension Viability Program (RSVP) model
inputs justified with Geological and Geophysical
(G&G), Engineering, Production, & Cost reports)......
(4) G&G report........................................ .............. X X X
(5) Engineering report................................ .............. X X X
(6) Production report................................. .............. X X X
(7) Deep water cost report............................ .............. X X X
----------------------------------------------------------------------------------------------------------------
(b) We require the confirmation elements indicated by an X in the
following table and described in Sec. Sec. 203.70, 203.81, 203.90 and
203.91 to retain royalty relief.
----------------------------------------------------------------------------------------------------------------
Deep water
End-of-life -----------------------------------------
Confirmation elements lease Expansion Pre-act Development
project lease project
----------------------------------------------------------------------------------------------------------------
(1) Fabricator's confirmation report.................. .............. X X X
(2) Post-production development report approved by an .............. X X X
independent certified public accountant (CPA) * * *..
----------------------------------------------------------------------------------------------------------------
(c) The following table indicates by an X, and Sec. Sec. 203.50,
203.52, 203.60 and 203.67 describe, the prerequisites for our approval
of your royalty relief application.
----------------------------------------------------------------------------------------------------------------
Deep water
End-of-life -----------------------------------------
Approval conditions lease Pre-act Development
Expansion lease project
----------------------------------------------------------------------------------------------------------------
(1) At least 12 of the last 15 months have the X
required level of production.........................
(2) Already producing................................. X ...........
(3) A producible well into a reservoir that has not .............. X X X
produced before......................................
(4) Royalties for qualifying months exceed 75 percent X ........... ...........
of net revenue (NR)..................................
(5) Substantial investment on a pre-Act lease (e.g., .............. ........... ...........
platform, subsea template)...........................
(6) Determined to be economic only with relief........ .............. X X X
----------------------------------------------------------------------------------------------------------------
(d) The following table indicates by an X, and Sec. Sec. 203.52,
203.74, and 203.75 describe, the prerequisites for a redetermination of
our royalty relief decision.
----------------------------------------------------------------------------------------------------------------
Deep water
End-of-life -----------------------------------------
Redetermination conditions lease Expansion Pre-act Development
project lease project
----------------------------------------------------------------------------------------------------------------
(1) After 12 months under current rate, criteria same X ........... ...........
as for approval......................................
(2) For material change in geologic data, prices, .............. X X X
costs, or available technology.......................
----------------------------------------------------------------------------------------------------------------
[[Page 13]]
(e) The following table indicates by an X, and Sec. Sec. 203.53 and
203.69 describe, the characteristics of approved royalty relief.
----------------------------------------------------------------------------------------------------------------
Deep water
End-of-life -----------------------------------------
Relief rate and volume, subject to certain conditions lease Expansion Pre-act Development
project lease project
----------------------------------------------------------------------------------------------------------------
(1) One-half pre-application effective lease rate on X ........... ...........
the qualifying amount, 1.5 times pre-application
effective lease rate on additional production up to
twice the qualifying amount, and the pre-application
effective lease rate for any larger volumes..........
(2) Qualifying amount is the average monthly X ........... ...........
production for 12 qualifying months..................
(3) Zero royalty rate on the suspension volume and the .............. X X X
original lease rate on additional production.........
(4) Suspension volume is at least 17.5, 52.5 or 87.5 .............. ........... X
million barrels of oil equivalent (MMBOE)............
(5) Suspension volume is at least the minimum set in .............. X ........... X
the Notice of Sale, the lease, or the regulations....
(6) Amount needed to become economic.................. .............. X X X
----------------------------------------------------------------------------------------------------------------
(f) The following table indicates by an X, and Sec. Sec. 203.54 and
203.78 describe, circumstances under which we discontinue your royalty
relief.
----------------------------------------------------------------------------------------------------------------
Deep water
End-of-life -----------------------------------------
Full royalty resumes when lease Expansion Pre-act Development
project lease project
----------------------------------------------------------------------------------------------------------------
(1) Average NYMEX price for last 12 months is at least X ........... ...........
25 percent above the average for the qualifying
months...............................................
(2) Average NYMEX price for last calendar year exceeds .............. X X
$28/bbl or $3.50/mcf, escalated by the gross domestic
product (GDP) deflator since 1994....................
(3) Average prices for designated periods exceed .............. X ........... X
levels we specify in the Notice of Sale or the lease.
----------------------------------------------------------------------------------------------------------------
(g) The following table indicates by an X, and Sec. Sec. 203.55,
203.76, and 203.77 describe, circumstances under which we end or reduce
royalty relief.
----------------------------------------------------------------------------------------------------------------
Deep water
End-of-life -----------------------------------------
Relief withdrawn or reduced lease Expansion Pre-act Development
project lease project
----------------------------------------------------------------------------------------------------------------
(1) If recipient requests............................. X X X X
(2) Lease royalty rate is at the effective rate for 12 X ........... ...........
consecutive months...................................
(3) Conditions occur that we specified in the approval X ........... ...........
letter in individual cases...........................
(4) Recipient does not submit post-production report .............. X X X
that compares expected to actual costs...............
(5) Recipient changes development system.............. .............. X X X
(6) Recipient excessively delays starting fabrication. .............. X X X
(7) Recipient spends less than 80 percent of proposed .............. X X X
pre-production costs prior to start of production....
(8) Amount of relief volume is produced............... .............. X X X
----------------------------------------------------------------------------------------------------------------
Sec. 203.5 What is BSEE's authority to collect information?
(a) The Office of Management and Budget (OMB) has approved the
information collection requirements in this part under 44 U.S.C. 3501 et
seq., and assigned OMB Control Number 1014-0005. The title of this
information collection is ``30 CFR part 203, Relief or Reduction in
Royalty Rates.''
(b) BSEE collects this information to make decisions on the economic
viability of leases requesting a suspension or elimination of royalty or
net profit share. Responses are required to obtain
[[Page 14]]
a benefit or are mandatory according to 43 U.S.C. 1331 et seq. BSEE will
protect information considered proprietary under applicable law and
under regulations at Sec. 203.61, ``How do I assess my chances for
getting relief?'' and 30 CFR 250.197, ``Data and information to be made
available to the public or for limited inspection.''
(c) An agency may not conduct or sponsor, and a person is not
required to respond to a collection of information unless it displays a
currently valid OMB control number.
(d) Send comments regarding any aspect of the collection of
information under this part, including suggestions for reducing the
burden, to the Information Collection Clearance Officer, Bureau of
Safety and Environmental Enforcement, 45600 Woodland Road, Sterling, VA
20166.
[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 36148, June 6, 2016]
Subpart B_OCS Oil, Gas, and Sulfur General
Royalty Relief for Drilling Ultra-Deep Wells on Leases Not Subject to
Deep Water Royalty Relief
Sec. 203.30 Which leases are eligible for royalty relief as a result
of drilling a phase 2 or phase 3 ultra-deep well?
Your lease may receive a royalty suspension volume (RSV) under
Sec. Sec. 203.31 through 203.36 if the lease meets all the requirements
of this section.
(a) The lease is located in the GOM wholly west of 87 degrees, 30
minutes West longitude in water depths entirely less than 400 meters
deep.
(b) The lease has not produced gas or oil from a deep well or an
ultra-deep well, except as provided in Sec. 203.31(b).
(c) If the lease is located entirely in more than 200 meters and
entirely less than 400 meters of water, it must either:
(1) Have been issued before November 28, 1995, and not been granted
deep water royalty relief under 43 U.S.C. 1337(a)(3)(C), added by
section 302 of the Deep Water Royalty Relief Act; or
(2) Have been issued after November 28, 2000, and not been granted
deep water royalty relief under Sec. Sec. 203.60 through 203.79.
Sec. 203.31 If I have a qualified phase 2 or qualified phase 3
ultra-deep well, what royalty relief would that well earn for my lease?
(a) Subject to the administrative requirements of Sec. 203.35 and
the price conditions in Sec. 203.36, your qualified well earns your
lease an RSV shown in the following table in billions of cubic feet
(BCF) or in thousands of cubic feet (MCF) as prescribed in Sec. 203.33:
------------------------------------------------------------------------
If you have a qualified phase 2 or Then your lease earns an RSV on
qualified phase 3 ultra-deep well that this volume of gas production:
is:
------------------------------------------------------------------------
(1) An original well, 35 BCF.
(2) A sidetrack with a sidetrack 35 BCF.
measured depth of at least 20,000
feet,
(3) An ultra-deep short sidetrack that 4 BCF plus 600 MCF times
is a phase 2 ultra-deep well, sidetrack measured depth
(rounded to the nearest 100
feet) but no more than 25 BCF.
(4) An ultra-deep short sidetrack that 0 BCF.
is a phase 3 ultra-deep well,
------------------------------------------------------------------------
(b)(1) This paragraph applies if your lease:
(i) Has produced gas or oil from a deep well with a perforated
interval the top of which is less than 18,000 feet TVD SS;
(ii) Was issued in a lease sale held between January 1, 2004, and
December 31, 2005; and
(iii) The terms of your lease expressly incorporate the provisions
of Sec. Sec. 203.41 through 203.47 as they existed at the time the
lease was issued.
(2) Subject to the administrative requirements of Sec. 203.35 and
the price conditions in Sec. 203.36, your qualified well earns your
lease an RSV shown in the
[[Page 15]]
following table in BCF or MCF as prescribed in Sec. 203.33:
------------------------------------------------------------------------
Then your lease earns an RSV on
If you have a qualified phase 2 ultra- this volume of gas production:
deep well that is . . .
------------------------------------------------------------------------
(i) An original well or a sidetrack 10 BCF.
with a sidetrack measured depth of at
least 20,000 feet TVD SS,
(ii) An ultra-deep short sidetrack, 4 BCF plus 600 MCF times
sidetrack measured depth
(rounded to the nearest 100
feet) but no more than 10 BCF.
------------------------------------------------------------------------
(c) Lessees may request a refund of or recoup royalties paid on
production from qualified phase 2 or phase 3 ultra-deep wells that:
(1) Occurs before December 18, 2008, and
(2) Is subject to application of an RSV under either Sec. 203.31 or
Sec. 203.41.
(d) The following examples illustrate how this section applies.
These examples assume that your lease is located in the GOM west of 87
degrees, 30 minutes West longitude and in water less than 400 meters
deep (see Sec. 203.30(a)), has no existing deep or ultra-deep wells and
that the price thresholds prescribed in Sec. 203.36 have not been
exceeded.
Example 1: In 2008, you drill and begin producing from an ultra-deep
well with a perforated interval the top of which is 25,000 feet TVD SS,
and your lease has had no prior production from a deep or ultra-deep
well. Assuming your lease has no deepwater royalty relief (see Sec.
203.30(c)), your lease is eligible (according to Sec. 203.30(b)) to
earn an RSV under Sec. 203.31 because it has not yet produced from a
deep well. Your lease earns an RSV of 35 BCF under this section when
this well begins producing. According to Sec. 203.31(a), your 25,000
foot well qualifies your lease for this RSV because the well was drilled
after the relief authorized here became effective (when the proposed
version of this rule was published on May 18, 2007) and produced from an
interval that meets the criteria for an ultra-deep well (i.e., is a
phase 2 ultra-deep well as defined in Sec. 203.0). Then in 2014, you
drill and produce from another ultra-deep well with a perforated
interval the top of which is 29,000 feet TVD SS. Your lease earns no
additional RSV under this section when this second ultra-deep well
produces, because your lease no longer meets the condition in (Sec.
203.30(b)) of no production from a deep well. However, any remaining RSV
earned by the first ultra-deep well on your lease would be applied to
production from both the first and the second ultra-deep wells as
prescribed in Sec. 203.33(a)(2), or Sec. 203.33(b)(2) if your lease is
part of a unit.
Example 2: In 2005, you spudded and began producing from an ultra-
deep well with a perforated interval the top of which is 23,000 feet TVD
SS. Your lease earns no RSV under this section from this phase 1 ultra-
deep well (as defined in Sec. 203.0) because you spudded the well
before the publication date (May 18, 2007) of the proposed rule when
royalty relief under Sec. 203.31(a) became effective. However, this
ultra-deep well may earn an RSV of 25 BCF for your lease under Sec.
203.41 (that became effective May 3, 2004), if the lease is located in
water depths partly or entirely less than 200 meters and has not
previously produced from a deep well (Sec. 203.30(b)).
Example 3: In 2000, you began producing from a deep well with a
perforated interval the top of which is 16,000 feet TVD SS and your
lease is located in water 100 meters deep. Then in 2008, you drill and
produce from a new ultra-deep well with a perforated interval the top of
which is 24,000 feet TVD SS. Your lease earns no RSV under either this
section or Sec. 203.41 because the 16,000-foot well was drilled before
we offered any way to earn an RSV for producing from a deep well (see
dates in the definition of qualified well in Sec. 203.0) and because
the existence of the 16,000-foot well means the lease is not eligible
(see Sec. 203.30(b)) to earn an RSV for the 24,000-foot well. Because
the lease existed in the year 2000, it cannot be eligible for the
exception to this eligibility condition provided in Sec. 203.31(b).
Example 4: In 2008, you spud and produce from an ultra-deep well
with a perforated interval the top of which is 22,000 feet TVD SS, your
lease is located in water 300 meters deep, and your lease has had no
previous production from a deep or ultra-deep well. Your lease earns an
RSV of 35 BCF under this section when this well begins producing because
your lease meets the conditions in Sec. 203.30 and the well fits the
definition of a phase 2 ultra-deep well (in Sec. 203.0). Then in 2010,
you spud and produce from a deep well with a perforated interval the top
of which is 16,000 feet TVD SS. Your 16,000-foot well earns no RSV
because it is on a lease that already has a producing well at least
18,000 feet subsea (see Sec. 203.42(a)), but any remaining RSV earned
by the ultra-deep well would also be applied to production from the deep
well as prescribed in Sec. 203.33(a)(2), or Sec. 203.33(b)(2) if your
lease is part of a unit and Sec. 203.43(a)(2),
[[Page 16]]
or Sec. 203.43(b)(2) if your lease is part of a unit. However, if the
16,000-foot deep well does not begin production until 2016 (or if your
lease were located in water less than 200 meters deep), then the 16,000-
foot well would not be a qualified deep well because this well does not
begin production within the interval specified in the definition of a
qualified well in Sec. 203.0, and the RSV earned by the ultra-deep well
would not be applied to production from this (unqualified) deep well.
Example 5: In 2008, you spud a deep well with a perforated interval
the top of which is 17,000 feet TVD SS that becomes a qualified well and
earns an RSV of 15 BCF under Sec. 203.41 when it begins producing. Then
in 2011, you spud an ultra-deep well with a perforated interval the top
of which is 26,000 feet TVD SS. Your 26,000-foot well becomes a
qualified ultra-deep well because it meets the date and depth conditions
in this definition under Sec. 203.0 when it begins producing, but your
lease earns no additional RSV under this section or Sec. 203.41 because
it is on a lease that already has production from a deep well (see Sec.
203.30(b)). Both the qualified deep well and the qualified ultra-deep
well would share your lease's total RSV of 15 BCF in the manner
prescribed in Sec. Sec. 203.33 and 203.43.
Example 6: In 2008, you spud a qualified ultra-deep well that is a
sidetrack with a sidetrack measured depth of 21,000 feet and a
perforated interval the top of which is 25,000 feet TVD SS. This well
meets the definition of an ultra-deep well but is too long to be
classified an ultra-deep short sidetrack in Sec. 203.0. If your lease
is located in 150 meters of water and has not previously produced from a
deep well, your lease earns an RSV of 35 BCF because it was drilled
after the effective date for earning this RSV. Further, this RSV applies
to gas production from this and any future qualified deep and qualified
ultra-deep wells on your lease, as prescribed in Sec. 203.33. The
absence of an expiration date for earning an RSV on an ultra-deep well
means this long sidetrack well becomes a qualified well whenever it
starts production. If your sidetrack has a sidetrack measured depth of
14,000 feet and begins production in March 2009, it earns an RSV of 12.4
BCF under this section because it meets the definitions of a phase 2
ultra-deep well (production begins before the expiration date for the
pre-existing relief in its water depth category) and an ultra-deep short
sidetrack in Sec. 203.0. However, if it does not begin production until
2010, it earns no RSV because it is too short as a phase 3 ultra-deep
well to be a qualified ultra-deep well.
Example 7: Your lease was issued in June 2004 and expressly
incorporates the provisions of Sec. Sec. 203.41 through 203.47 as they
existed at that time. In January 2005, you spud a deep well (well no. 1)
with a perforated interval the top of which is 16,800 feet TVD SS that
becomes a qualified well and earns an RSV of 15 BCF under Sec. 203.41
when it begins producing. Then in February 2008, you spud an ultra-deep
well (well no. 2) with a perforated interval the top of which is 22,300
feet that begins producing in November 2008, after well no. 1 has
started production. Well no. 2 earns your lease an additional RSV of 10
BCF under paragraph (b) of this section because it begins production in
time to be classified as a phase 2 ultra-deep well. If, on the other
hand, well no. 2 had begun producing in June 2009, it would earn no
additional RSV for the lease because it would be classified as a phase 3
ultra-deep well and thus is not entitled to the exception under
paragraph (b) of this section.
Sec. 203.32 What other requirements or restrictions apply to royalty relief
for a qualified phase 2 or phase 3 ultra-deep well?
(a) If a qualified ultra-deep well on your lease is within a
unitized portion of your lease, the RSV earned by that well under this
section applies only to your lease and not to other leases within the
unit or to the unit as a whole.
(b) If your qualified ultra-deep well is a directional well (either
an original well or a sidetrack) drilled across a lease line, then
either:
(1) The lease with the perforated interval that initially produces
earns the RSV or
(2) If the perforated interval crosses a lease line, the lease where
the surface of the well is located earns the RSV.
(c) Any RSV earned under Sec. 203.31 is in addition to any royalty
suspension supplement (RSS) for your lease under Sec. 203.45 that
results from a different wellbore.
(d) If your lease earns an RSV under Sec. 203.31 and later produces
from a deep well that is not a qualified well, the RSV is not forfeited
or terminated, but you may not apply the RSV earned under Sec. 203.31
to production from the non-qualified well.
(e) You owe minimum royalties or rentals in accordance with your
lease terms notwithstanding any RSVs allowed under paragraphs (a) and
(b) of Sec. 203.31.
(f) Unused RSVs transfer to a successor lessee and expire with the
lease.
[[Page 17]]
Sec. 203.33 To which production do I apply the RSV earned by qualified
phase 2 and phase 3 ultra-deep wells on my lease or in my unit?
(a) You must apply the RSV allowed in Sec. 203.31(a) and (b) to gas
volumes produced from qualified wells on or after May 18, 2007, reported
on the Oil and Gas Operations Report, Part A (OGOR-A) for your lease
under 30 CFR 1210.102. All gas production from qualified wells reported
on the OGOR-A, including production not subject to royalty, counts
toward the total lease RSV earned by both deep or ultra-deep wells on
the lease.
(b) This paragraph applies to any lease with a qualified phase 2 or
phase 3 ultra-deep well that is not within a BSEE-approved unit. Subject
to the price conditions of Sec. 203.36, you must apply the RSV
prescribed in Sec. 203.31 as required under the following paragraphs
(b)(1) and (b)(2) of this section.
(1) You must apply the RSV to the earliest gas production occurring
on and after the later of May 18, 2007, or the date the first qualified
phase 2 or phase 3 ultra-deep well that earns your lease the RSV begins
production (other than test production).
(2) You must apply the RSV to only gas production from qualified
wells on your lease, regardless of their depth, for which you have met
the requirements in Sec. 203.35 or Sec. 203.44.
(c) This paragraph applies to any lease with a qualified phase 2 or
phase 3 ultra-deep well where all or part of the lease is within a BSEE-
approved unit. Under the unit agreement, a share of the production from
all the qualified wells in the unit participating area would be
allocated to your lease each month according to the participating area
percentages. Subject to the price conditions of Sec. 203.36, you must
apply the RSV prescribed in Sec. 203.31 as follows:
(1) You must apply the RSV to the earliest gas production occurring
on and after the later of May 18, 2007, or the date that the first
qualified phase 2 or phase 3 ultra-deep well that earns your lease the
RSV begins production (other than test production).
(2) You must apply the RSV to only gas production:
(i) From qualified wells on the non-unitized area of your lease,
regardless of their depth, for which you have met the requirements in
Sec. 203.35 or Sec. 203.44; and
(ii) Allocated to your lease under a BSEE-approved unit agreement
from qualified wells on unitized areas of your lease and on other leases
in participating areas of the unit, regardless of their depth, for which
the requirements in Sec. 203.35 or Sec. 203.44 have been met. The
allocated share under paragraph (a)(2)(ii) of this section does not
increase the RSV for your lease.
Example: The east half of your lease A is unitized with all of lease
B. There is one qualified phase 2 ultra-deep well on the non-unitized
portion of lease A that earns lease A an RSV of 35 BCF under Sec.
203.31, one qualified deep well on the unitized portion of lease A
(drilled after the ultra-deep well on the non-unitized portion of that
lease) and a qualified phase 2 ultra-deep well on lease B that earns
lease B a 35 BCF RSV under Sec. 203.31. The participating area
percentages allocate 40 percent of production from both of the unit
qualified wells to lease A and 60 percent to lease B. If the non-
unitized qualified phase 2 ultra-deep well on lease A produces 12 BCF,
and the unitized qualified well on lease A produces 18 BCF, and the
qualified well on lease B produces 37 BCF, then the production volume
from and allocated to lease A to which the lease A RSV applies is 34 BCF
[12 + (18 + 37)(0.40)]. The production volume allocated to lease B to
which the lease B RSV applies is 33 BCF [(18 + 37)(0.60)]. None of the
volumes produced from a well that is not within a unit participating
area may be allocated to other leases in the unit.
(d) You must begin paying royalties when the cumulative production
of gas from all qualified wells on your lease, or allocated to your
lease under paragraph (b) of this section, reaches the applicable RSV
allowed under Sec. 203.31 or Sec. 203.41. For the month in which
cumulative production reaches this RSV, you owe royalties on the portion
of gas production from or allocated to your lease that exceeds the RSV
remaining at the beginning of that month.
Sec. 203.34 To which production may an RSV earned by qualified
phase 2 and phase 3 ultra-deep wells on my lease not be applied?
You may not apply an RSV earned under Sec. 203.31:
[[Page 18]]
(a) To production from completions less than 15,000 feet TVD SS,
except in cases where the qualified well is re-perforated in the same
reservoir previously perforated deeper than 15,000 feet TVD SS;
(b) To production from a deep well or ultra-deep well on any other
lease, except as provided in paragraph (c) of Sec. 203.33;
(c) To any liquid hydrocarbon (oil and condensate) volumes; or
(d) To production from a deep well or ultra-deep well that commenced
drilling before:
(1) March 26, 2003, on a lease that is located entirely or partly in
water less than 200 meters deep; or
(2) May 18, 2007, on a lease that is located entirely in water more
than 200 meters deep.
Sec. 203.35 What administrative steps must I take to use the RSV earned
by a qualified phase 2 or phase 3 ultra-deep well?
To use an RSV earned under Sec. 203.31:
(a) You must notify the BSEE Regional Supervisor for Production and
Development in writing of your intent to begin drilling operations on
all your ultra-deep wells.
(b) Before beginning production, you must meet any production
measurement requirements that the BSEE Regional Supervisor for
Production and Development has determined are necessary under 30 CFR
part 250, subpart L.
(c)(1) Within 30 days of the beginning of production from any wells
that would become qualified phase 2 or phase 3 ultra-deep wells by
satisfying the requirements of this section:
(i) Provide written notification to the BSEE Regional Supervisor for
Production and Development that production has begun; and
(ii) Request confirmation of the size of the RSV earned by your
lease.
(2) If you produced from a qualified phase 2 or phase 3 ultra-deep
well before December 18, 2008, you must provide the information in
paragraph (c)(1) of this section no later than January 20, 2009.
(d) If you cannot produce from a well that otherwise meets the
criteria for a qualified phase 2 ultra-deep well that is an ultra-deep
short sidetrack before May 3, 2009, on a lease that is located entirely
or partly in water less than 200 meters deep, or before May 3, 2013, on
a lease that is located entirely in water more than 200 meters but less
than 400 meters deep, the BSEE Regional Supervisor for Production and
Development may extend the deadline for beginning production for up to 1
year, based on the circumstances of the particular well involved, if it
meets all the following criteria.
(1) The delay occurred after drilling reached the total depth in
your well.
(2) Production (other than test production) was expected to begin
from the well before May 3, 2009, on a lease that is located entirely or
partly in water less than 200 meters deep or before May 3, 2013, on a
lease that is located entirely in water more than 200 meters but less
than 400 meters deep. You must provide a credible activity schedule with
supporting documentation.
(3) The delay in beginning production is for reasons beyond your
control, such as adverse weather and accidents which BSEE deems were
unavoidable.
Sec. 203.36 Do I keep royalty relief if prices rise significantly?
(a) You must pay the Office of Natural Resources Revenue royalties
on all gas production to which an RSV otherwise would be applied under
Sec. 203.33 for any calendar year in which the average daily closing
New York Mercantile Exchange (NYMEX) natural gas price exceeds the
applicable threshold price shown in the following table.
------------------------------------------------------------------------
A price threshold in year 2007 dollars
of . . . Applies to . . .
------------------------------------------------------------------------
(1) $10.15 per MMBtu, (i) The first 25 BCF of RSV
earned under Sec. 203.31(a)
by a phase 2 ultra-deep well
on a lease that is located in
water partly or entirely less
than 200 meters deep issued
before December 18, 2008; and
(ii) Any RSV earned under Sec.
203.31(b) by a phase 2 ultra-
deep well.
[[Page 19]]
(2) $4.55 per MMBtu, (i) Any RSV earned under Sec.
203.31(a) by a phase 3 ultra-
deep well unless the lease
terms prescribe a different
price threshold;
(ii) The last 10 BCF of the 35
BCF of RSV earned under Sec.
203.31(a) by a phase 2 ultra-
deep well on a lease that is
located in water partly or
entirely less than 200 meters
deep issued before December
18, 2008, and that is not a
non-converted lease;
(iii) The last 15 BCF of the 35
BCF of RSV earned under Sec.
203.31(a) by a phase 2 ultra-
deep well on a non-converted
lease;
(iv) Any RSV earned under Sec.
203.31(a) by a phase 2 ultra-
deep well on a lease in water
partly or entirely less than
200 meters deep issued on or
after December 18, 2008,
unless the lease terms
prescribe a different price
threshold; and
(v) Any RSV earned under Sec.
203.31(a) by a phase 2 ultra-
deep well on a lease in water
entirely more than 200 meters
deep and entirely less than
400 meters deep.
(3) $4.08 per MMBtu, (i) The first 20 BCF of RSV
earned by a well that is
located on a non-converted
lease issued in OCS Lease Sale
178.
(4) $5.83 per MMBtu, (i) The first 20 BCF of RSV
earned by a well that is
located on a non-converted
lease issued in OCS Lease
Sales 180, 182, 184, 185, or
187.
------------------------------------------------------------------------
(b) For purposes of paragraph (a) of this section, determine the
threshold price for any calendar year after 2007 by:
(1) Determining the percentage of change during the year in the
Department of Commerce's implicit price deflator for the gross domestic
product; and
(2) Adjusting the threshold price for the previous year by that
percentage.
(c) The following examples illustrate how this section applies.
Example 1: Assume that a lessee drills and begins producing from a
qualified phase 2 ultra-deep well in 2008 on a lease issued in 2004 in
less than 200 meters of water that earns the lease an RSV of 35 BCF.
Further, assume the well produces a total of 18 BCF by the end of 2009
and in both of those years, the average daily NYMEX closing natural gas
price is less than $10.15 (adjusted for inflation after 2007). The
lessee does not pay royalty on the 18 BCF because the gas price
threshold under paragraph (a)(1) of this section applies to the first 25
BCF of this RSV earned by this phase 2 ultra-deep well. In 2010, the
well produces another 13 BCF. In that year, the average daily closing
NYMEX natural gas price is greater than $4.55 per MMBtu (adjusted for
inflation after 2007), but less than $10.15 per MMBtu (adjusted for
inflation after 2007). The first 7 BCF produced in 2010 will exhaust the
first 25 BCF (that is subject to the $10.15 threshold) of the 35 BCF RSV
that the well earned. The lessee must pay royalty on the remaining 6 BCF
produced in 2010, because it is subject to the $4.55 per MMBtu threshold
under paragraph (a)(2)(ii) of this section which was exceeded.
Example 2: Assume that a lessee:
(1) Drills and produces from well no.1, a qualified deep well in
2008 to a depth of 15,500 feet TVD SS that earns a 15 BCF RSV for the
lease under Sec. 203.41, which would be subject to a price threshold of
$10.15 per MMBtu (adjusted for inflation after 2007), meaning the lease
is partly or entirely in less than 200 meters of water;
(2) Later in 2008, drills and produces from well no. 2, a second
qualified deep well to a depth of 17,000 feet TVD SS that earns no
additional RSV (see Sec. 203.41(c)(1)); and
(3) In 2015, drills and produces from well no. 3, a qualified phase
3 ultra-deep well that earns no additional RSV since the lease already
has an RSV established by prior deep well production. Further assume
that in 2015, the average daily closing NYMEX natural gas price exceeds
$4.55 per MMBtu (adjusted for inflation after 2007) but does not exceed
$10.15 per MMBtu (adjusted for inflation after 2007). In 2015, any
remaining RSV earned by well no. 1 (which would have been applied to
production from well nos. 1 and 2 in the intervening years), would be
applied to production from all three qualified wells. Because the price
threshold applicable to that RSV was not exceeded, the production from
all three qualified wells would be royalty-free until the 15 BCF RSV
earned by well no. 1 is exhausted.
Example 3: Assume the same initial facts regarding the three wells
as in Example 2. Further assume that well no. 1 stopped producing in
2011 after it had produced 8 BCF, and that well no. 2 stopped producing
in 2012 after it had produced 5 BCF. Two BCF of the RSV earned by well
no. 1 remain. That RSV would be applied to production from well no.
[[Page 20]]
3 until it is exhausted, and the lessee therefore would not pay royalty
on those 2 BCF produced in 2015, because the $10.15 per MMBtu (adjusted
for inflation after 2007) price threshold is not exceeded. The
determination of which price threshold applies to deep gas production
depends on when the first qualified well earned the RSV for the lease,
not on which wells use the RSV.
Example 4: Assume that in February 2010, a lessee completes and
begins producing from an ultra-deep well (at a depth of 21,500 feet TVD
SS) on a lease located in 325 meters of water with no prior production
from any deep well and no deep water royalty relief. The ultra-deep well
would be a phase 2 ultra-deep well (see definition in Sec. 203.0), and
would earn the lease an RSV of 35 BCF under Sec. Sec. 203.30 and
203.31. Further assume that the average daily closing NYMEX natural gas
price exceeds $4.55 per MMBtu (adjusted for inflation after 2007) but
does not exceed $10.15 per MMBtu (adjusted for inflation after 2007)
during 2010. Because the lease is located in more than 200 but less than
400 meters of water, the $4.55 per MMBtu price threshold applies to the
whole RSV (see paragraph (a)(2)(v) of this section), and the lessee will
owe royalty on all gas produced from the ultra-deep well in 2010.
(d) You must pay any royalty due under this section no later than
March 31 of the year following the calendar year for which you owe
royalty. If you do not pay by that date, you must pay late payment
interest under 30 CFR 1218.54 from April 1 until the date of payment.
(e) Production volumes on which you must pay royalty under this
section count as part of your RSV.
Royalty Relief for Drilling Deep Gas Wells on Leases Not Subject to Deep
Water Royalty Relief
Sec. 203.40 Which leases are eligible for royalty relief as a result
of drilling a deep well or a phase 1 ultra-deep well?
Your lease may receive an RSV under Sec. Sec. 203.41 through
203.44, and may receive an RSS under Sec. Sec. 203.45 through 203.47,
if it meets all the requirements of this section.
(a) The lease is located in the GOM wholly west of 87 degrees, 30
minutes West longitude in water depths entirely less than 400 meters
deep.
(b) The lease has not produced gas or oil from a well with a
perforated interval the top of which is 18,000 feet TVD SS or deeper
that commenced drilling either:
(1) Before March 26, 2003, on a lease that is located partly or
entirely in water less than 200 meters deep; or
(2) Before May 18, 2007, on a lease that is located in water
entirely more than 200 meters and entirely less than 400 meters deep.
(c) In the case of a lease located partly or entirely in water less
than 200 meters deep, the lease was issued in a lease sale held either:
(1) Before January 1, 2001;
(2) On or after January 1, 2001, and before January 1, 2004, and, in
cases where the original lease terms provided for an RSV for deep gas
production, the lessee has exercised the option provided for in Sec.
203.49; or
(3) On or after January 1, 2004, and the lease terms provide for
royalty relief under Sec. Sec. 203.41 through 203.47. (Note: Because
the original Sec. 203.41 has been divided into new Sec. Sec. 203.41
and 203.42 and subsequent sections have been redesignated as Sec. Sec.
203.43 through 203.48, royalty relief in lease terms for leases issued
on or after January 1, 2004, should be read as referring to Sec. Sec.
203.41 through 203.48.)
(d) If the lease is located entirely in more than 200 meters and
less than 400 meters of water, it must either:
(1) Have been issued before November 28, 1995, and not been granted
deep water royalty relief under 43 U.S.C. 1337(a)(3)(C), added by
section 302 of the Deep Water Royalty Relief Act; or
(2) Have been issued after November 28, 2000, and not been granted
deep water royalty relief under Sec. Sec. 203.60 through 203.79.
Sec. 203.41 If I have a qualified deep well or a qualified phase 1
ultra-deep well, what royalty relief would my lease earn?
(a) To qualify for a suspension volume under paragraphs (b) or (c)
of this section, your lease must meet the requirements in Sec. 203.40
and the requirements in the following table.
[[Page 21]]
------------------------------------------------------------------------
And if it later . . Then your lease . .
If your lease has not . . . . .
------------------------------------------------------------------------
(1) produced gas or oil from Has a qualified deep earns an RSV
any deep well or ultra-deep well or qualified specified in
well, phase 1 ultra-deep paragraph (b) of
well, this section.
(2) produced gas or oil from Has a qualified deep earns an RSV
a well with a perforated well with a specified in
interval whose top is perforated interval paragraph (c) of
18,000 feet TVD SS or whose top is 18,000 this section.
deeper, feet TVD SS or
deeper or a
qualified phase 1
ultra-deep well,
------------------------------------------------------------------------
(b) If your lease meets the requirements in paragraph (a)(1) of this
section, it earns the RSV prescribed in the following table:
------------------------------------------------------------------------
If you have a qualified deep well or a Then your lease earns an RSV on
qualified phase 1 ultra-deep well that this volume of gas production:
is:
------------------------------------------------------------------------
(1) An original well with a perforated 15 BCF.
interval the top of which is from
15,000 to less than 18,000 feet TVD
SS,
(2) A sidetrack with a perforated 4 BCF plus 600 MCF times
interval the top of which is from sidetrack measured depth
15,000 to less than 18,000 feet TVD (rounded to the nearest 100
SS, feet) but no more than 15 BCF.
(3) An original well with a perforated 25 BCF.
interval the top of which is at least
18,000 feet TVD SS,
(4) A sidetrack with a perforated 4 BCF plus 600 MCF times
interval the top of which is at least sidetrack measured depth
18,000 feet TVD SS, (rounded to the nearest 100
feet) but no more than 25 BCF.
------------------------------------------------------------------------
(c) If your lease meets the requirements in paragraph (a)(2) of this
section, it earns the RSV prescribed in the following table. The RSV
specified in this paragraph is in addition to any RSV your lease already
may have earned from a qualified deep well with a perforated interval
whose top is from 15,000 feet to less than 18,000 feet TVD SS.
------------------------------------------------------------------------
If you have a qualified deep well or a
qualified phase 1 ultra-deep well that Then you earn an RSV on this
is . . . amount of gas production:
------------------------------------------------------------------------
(1) An original well or a sidetrack 0 BCF.
with a perforated interval the top of
which is from 15,000 to less than
18,000 feet TVD SS,
(2) An original well with a perforated 10 BCF.
interval the top of which is 18,000
feet TVD SS or deeper,
(3) A sidetrack with a perforated 4 BCF plus 600 MCF times
interval the top of which is 18,000 sidetrack measured depth
feet TVD SS or deeper, (rounded to the nearest 100
feet) but no more than 10 BCF.
------------------------------------------------------------------------
(d) Lessees may request a refund of or recoup royalties paid on
production from qualified wells on a lease that is located in water
entirely deeper than 200 meters but entirely less than 400 meters deep
that:
(1) Occurs before December 18, 2008; and
(2) Is subject to application of an RSV under either Sec. 203.31 or
Sec. 203.41.
(e) The following examples illustrate how this section applies,
assuming your lease meets the location, prior production, and lease
issuance conditions in Sec. 203.40 and paragraph (a) of this section:
Example 1: If you have a qualified deep well that is an original
well with a perforated interval the top of which is 16,000 feet TVD SS,
your lease earns an RSV of 15 BCF under paragraph (b)(1) of this
section. This RSV must be applied to gas production from all qualified
wells on your lease, as prescribed in Sec. Sec. 203.43 and 203.48.
However, if the top of the perforated interval is 18,500 feet TVD SS,
the RSV is 25 BCF according to paragraph (b)(3) of this section.
Example 2: If you have a qualified deep well that is a sidetrack,
with a perforated interval the top of which is 16,000 feet TVD SS and a
sidetrack measured depth of 6,789 feet, we round the measured depth to
6,800 feet and your lease earns an RSV of 8.08 BCF under paragraph
(b)(2) of this section. This RSV would be applied to gas production from
all qualified wells on your lease, as prescribed in Sec. Sec. 203.43
and 203.48.
Example 3: If you have a qualified deep well that is a sidetrack,
with a perforated interval the top of which is 16,000 feet TVD SS and a
sidetrack measured depth of 19,500 feet, your lease earns an RSV of 15
BCF. This RSV would be applied to gas production from all qualified
wells on your lease, as prescribed in Sec. Sec. 203.43 and 203.48, even
though 4 BCF plus 600 MCF per foot of sidetrack measured
[[Page 22]]
depth equals 15.7 BCF because paragraph (b)(2) of this section limits
the RSV for a sidetrack at the amount an original well to the same depth
would earn.
Example 4: If you have drilled and produced a deep well with a
perforated interval the top of which is 16,000 feet TVD SS before March
26, 2003 (and the well therefore is not a qualified well and has earned
no RSV under this section), and later drill:
(i) A deep well with a perforated interval the top of which is
17,000 feet TVD SS, your lease earns no RSV (see paragraph (c)(1) of
this section);
(ii) A qualified deep well that is an original well with a
perforated interval the top of which is 19,000 feet TVD SS, your lease
earns an RSV of 10 BCF under paragraph (c)(2) of this section. This RSV
would be applied to gas production from qualified wells on your lease,
as prescribed in Sec. Sec. 203.43 and 203.48; or
(iii) A qualified deep well that is a sidetrack with a perforated
interval the top of which is 19,000 feet TVD SS, that has a sidetrack
measured depth of 7,000 feet, your lease earns an RSV of 8.2 BCF under
paragraph (c)(3) of this section. This RSV would be applied to gas
production from qualified wells on your lease, as prescribed in
Sec. Sec. 203.43 and 203.48.
Example 5: If you have a qualified deep well that is an original
well with a perforated interval the top of which is 16,000 feet TVD SS,
and later drill a second qualified well that is an original well with a
perforated interval the top of which is 19,000 feet TVD SS, we increase
the total RSV for your lease from 15 BCF to 25 BCF under paragraph
(c)(2) of this section. We will apply that RSV to gas production from
all qualified wells on your lease, as prescribed in Sec. Sec. 203.43
and 203.48. If the second well has a perforated interval the top of
which is 22,000 feet TVD SS (instead of 19,000 feet), the total RSV for
your lease would increase to 25 BCF only in 2 situations: (1) If the
second well was a phase 1 ultra-deep well, i.e., if drilling began
before May 18, 2007, or (2) the exception in Sec. 203.31(b) applies. In
both situations, your lease must be partly or entirely in less than 200
meters of water and production must begin on this well before May 3,
2009. If drilling of the second well began on or after May 18, 2007, the
second well would be qualified as a phase 2 or phase 3 ultra-deep well
and, unless the exception in Sec. 203.31(b) applies, would not earn any
additional RSV (as prescribed in Sec. 203.30), so the total RSV for
your lease would remain at 15 BCF.
Example 6: If you have a qualified deep well that is a sidetrack,
with a perforated interval the top of which is 16,000 feet TVD SS and a
sidetrack measured depth of 4,000 feet, and later drill a second
qualified well that is a sidetrack, with a perforated interval the top
of which is 19,000 feet TVD SS and a sidetrack measured depth of 8,000
feet, we increase the total RSV for your lease from 6.4 BCF [4 + (600 *
4,000)/1,000,000] to 15.2 BCF {6.4 + [4 + (600 * 8,000)/
1,000,000)]{time} under paragraphs (b)(2) and (c)(3) of this section.
We would apply that RSV to gas production from all qualified wells on
your lease, as prescribed in Sec. Sec. 203.43 and 203.48. The
difference of 8.8 BCF represents the RSV earned by the second sidetrack
that has a perforated interval the top of which is deeper than 18,000
feet TVD SS.
Sec. 203.42 What conditions and limitations apply to royalty relief
for deep wells and phase 1 ultra-deep wells?
The conditions and limitations in the following table apply to
royalty relief under Sec. 203.41.
------------------------------------------------------------------------
If . . . Then . . .
------------------------------------------------------------------------
(a) Your lease has produced gas or oil your lease cannot earn an
from a well with a perforated interval RSV under Sec. 203.41 as
the top of which is 18,000 feet TVD SS or a result of drilling any
deeper, subsequent deep wells or
phase 1 ultra-deep wells.
(b) You determine RSV under Sec. 203.41 that determination
for the first qualified deep well or establishes the total RSV
qualified phase 1 ultra-deep well on your available for that drilling
lease (whether an original well or a depth interval on your
sidetrack) because you drilled and lease (i.e., either 15,000-
produced it within the time intervals set 18,000 feet TVD SS, or
forth in the definitions for qualified 18,000 feet TVD SS and
wells, deeper), regardless of the
number of subsequent
qualified wells you drill
to that depth interval.
(c) A qualified deep well or qualified the RSV earned by that well
phase 1 ultra-deep well on your lease is under Sec. 203.41 applies
within a unitized portion of your lease, only to production from
qualified wells on or
allocated to your lease and
not to other leases within
the unit.
(d) Your qualified deep well or qualified the lease with the
phase 1 ultra-deep well is a directional perforated interval that
well (either an original well or a initially produces earns
sidetrack) drilled across a lease line, the RSV. However, if the
perforated interval crosses
a lease line, the lease
where the surface of the
well is located earns the
RSV.
(e) You earn an RSV under Sec. 203.41, that RSV is in addition to
any RSS for your lease
under Sec. 203.45 that
results from a different
wellbore.
(f) Your lease earns an RSV under Sec. the RSV is not forfeited or
203.41 and later produces from a well terminated, but you may not
that is not a qualified well, apply the RSV under Sec.
203.41 to production from
the non-qualified well.
(g) You qualify for an RSV under you still owe minimum
paragraphs (b) or (c) of Sec. 203.41, royalties or rentals in
accordance with your lease
terms.
[[Page 23]]
(h) You transfer your lease, unused RSVs transfer to a
successor lessee and expire
with the lease.
------------------------------------------------------------------------
Example to paragraph (b): If your first qualified deep well is a
sidetrack with a perforated interval whose top is 16,000 feet TVD SS and
earns an RSV of 12.5 BCF, and you later drill a qualified original deep
well to 17,000 feet TVD SS, the RSV for your lease remains at 12.5 BCF
and does not increase to 15 BCF. However, under paragraph (c) of Sec.
203.41, if you subsequently drill a qualified deep well to a depth of
18,000 feet or greater TVD SS, you may earn an additional RSV.
Sec. 203.43 To which production do I apply the RSV earned
from qualified deep wells or qualified phase 1 ultra-deep wells on my lease?
(a) You must apply the RSV prescribed in Sec. 203.41(b) and (c) to
gas volumes produced from qualified wells on or after May 3, 2004,
reported on the OGOR-A for your lease under 30 CFR 1210.102, as and to
the extent prescribed in Sec. Sec. 203.43 and 203.48.
(1) Except as provided in paragraph (a)(2) of this section, all gas
production from qualified wells reported on the OGOR-A, including
production that is not subject to royalty, counts toward the lease RSV.
(2) Production to which an RSS applies under Sec. Sec. 203.45 and
203.46 does not count toward the lease RSV.
(b) This paragraph applies to any lease with a qualified deep well
or qualified phase 1 ultra-deep well when no part of the lease is within
a BSEE-approved unit. Subject to the price conditions in Sec. 203.48,
you must apply the RSV prescribed in Sec. 203.41 as required under the
following paragraphs (b)(1) and (b)(2) of this section.
(1) You must apply the RSV to the earliest gas production occurring
on and after the later of:
(i) May 3, 2004, for an RSV earned by a qualified deep well or
qualified phase 1 ultra-deep well on a lease that is located entirely or
partly in water less than 200 meters deep;
(ii) May 18, 2007, for an RSV earned by a qualified deep well on a
lease that is located entirely in water more than 200 meters deep; or
(iii) The date that the first qualified well that earns your lease
the RSV begins production (other than test production).
(2) You must apply the RSV to only gas production from qualified
wells on your lease, regardless of their depth, for which you have met
the requirements in Sec. 203.35 or Sec. 203.44.
Example 1: On a lease in water less than 200 meters deep, you began
drilling an original deep well with a perforated interval the top of
which is 18,200 feet TVD SS in September 2003, that became a qualified
deep well in July 2004, when it began producing and using the RSV that
it earned. You subsequently drill another original deep well with a
perforated interval the top of which is 16,600 feet TVD SS, which
becomes a qualified deep well when production begins in August 2008. The
first well earned an RSV of 25 BCF (see Sec. 203.41(a)(1) and (b)(3)).
You must apply any remaining RSV each month beginning in August 2008 to
production from both wells until the 25 BCF RSV is fully utilized
according to paragraph (b)(2) of this section. If the second well had
begun production in August 2009, it would not be a qualified deep well
because it started production after expiration in May 2009 of the
ability to qualify for royalty relief in this water depth, and could not
share any of the remaining RSV (see definition of a qualified deep well
in Sec. 203.0).
Example 2: On a lease in water between 200 and 400 meters deep, you
begin drilling an original deep well with a perforated interval the top
of which is 17,100 feet TVD SS in November 2010 that becomes a qualified
deep well in June 2011 when it begins producing and using the RSV. You
subsequently drill another original deep well with a perforated interval
the top of which is 15,300 feet TVD SS which becomes a qualified deep
well by beginning production in October 2011 (see definition of a
qualified deep well in Sec. 203.0). Only the first well earns an RSV
equal to 15 BCF (see Sec. 203.41(a) and (b)). You must apply any
remaining RSV each month beginning in October 2011 to production from
both qualified deep wells until the 15 BCF RSV is fully utilized
according to paragraph (b)(2) of this section.
(c) This paragraph applies to any lease with a qualified deep well
or qualified phase 1 ultra-deep well when all or part of the lease is
within a BSEE-approved unit. Under the unit agreement, a share of the
production from all the qualified wells in the unit
[[Page 24]]
participating area would be allocated to your lease each month according
to the participating area percentages. Subject to the price conditions
in Sec. 203.48, you must apply the RSV prescribed under Sec. 203.41 as
required under the following paragraphs (c)(1) through (3) of this
section.
(1) You must apply the RSV to the earliest gas production occurring
on and after the later of:
(i) May 3, 2004, for an RSV earned by a qualified well or qualified
phase 1 ultra-deep well on a lease that is located entirely or partly in
water less than 200 meters deep;
(ii) May 18, 2007, for an RSV earned by a qualified deep well on a
lease that is located entirely in water more than 200 meters deep; or
(iii) The date that the first qualified well that earns your lease
the RSV begins production (other than test production).
(2) You must apply the RSV to only gas production:
(i) From all qualified wells on the non-unitized area of your lease,
regardless of their depth, for which you have met the requirements in
Sec. 203.35 or Sec. 203.44; and,
(ii) Allocated to your lease under a BSEE-approved unit agreement
from qualified wells on unitized areas of your lease and on unitized
areas of other leases in the unit, regardless of their depth, for which
the requirements in Sec. 203.35 or Sec. 203.44 have been met.
(3) The allocated share under paragraph (c)(2)(ii) of this section
does not increase the RSV for your lease. None of the volumes produced
from a well that is not within a unit participating area may be
allocated to other leases in the unit.
Example: The east half of your lease A is unitized with all of lease
B. There is one qualified 19,000-foot TVD SS deep well on the non-
unitized portion of lease A, one qualified 18,500-foot TVD SS deep well
on the unitized portion of lease A, and a qualified 19,400-foot TVD SS
deep well on lease B. The participating area percentages allocate 32
percent of production from both of the unit qualified deep wells to
lease A and 68 percent to lease B. If the non-unitized qualified deep
well on lease A produces 12 BCF and the unitized qualified deep well on
lease A produces 15 BCF, and the qualified deep well on lease B produces
10 BCF, then the production volume from and allocated to lease A to
which the lease an RSV applies is 20 BCF [12 + (15 + 10) * (0.32)]. The
production volume allocated to lease B to which the lease B RSV applies
is 17 BCF [(15 + 10) * (0.68)].
(d) You must begin paying royalties when the cumulative production
of gas from all qualified wells on your lease, or allocated to your
lease under paragraph (c) of this section, reaches the applicable RSV
allowed under Sec. 203.31 or Sec. 203.41. For the month in which
cumulative production reaches this RSV, you owe royalties on the portion
of gas production that exceeds the RSV remaining at the beginning of
that month.
(e) You may not apply the RSV allowed under Sec. 203.41 to:
(1) Production from completions less than 15,000 feet TVD SS, except
in cases where the qualified deep well is re-perforated in the same
reservoir previously perforated deeper than 15,000 feet TVD SS;
(2) Production from a deep well or phase 1 ultra-deep well on any
other lease, except as provided in paragraph (c) of this section;
(3) Any liquid hydrocarbon (oil and condensate) volumes; or
(4) Production from a deep well or phase 1 ultra-deep well that
commenced drilling before:
(i) March 26, 2003, on a lease that is located entirely or partly in
water less than 200 meters deep, or
(ii) May 18, 2007, on a lease that is located entirely in water more
than 200 meters deep.
Sec. 203.44 What administrative steps must I take to use
the royalty suspension volume?
(a) You must notify the BSEE Regional Supervisor for Production and
Development in writing of your intent to begin drilling operations on
all deep wells and phase 1 ultra-deep wells; and
(b) Within 30 days of the beginning of production from all wells
that would become qualified wells by satisfying the requirements of this
section, you must:
(1) Provide written notification to the BSEE Regional Supervisor for
Production and Development that production has begun; and
[[Page 25]]
(2) Request confirmation of the size of the royalty suspension
volume earned by your lease.
(c) Before beginning production, you must meet any production
measurement requirements that the BSEE Regional Supervisor for
Production and Development has determined are necessary under 30 CFR
part 250, subpart L.
(d) You must provide the information in paragraph (b) of this
section by January 20, 2009, if you produced before December 18, 2008,
from a qualified deep well or qualified phase 1 ultra-deep well on a
lease that is located entirely in water more than 200 meters and less
than 400 meters deep.
(e) The BSEE Regional Supervisor for Production and Development may
extend the deadline for beginning production for up to one year for a
well that cannot begin production before the applicable date prescribed
in the definition of ``qualified deep well'' in Sec. 203.0 if it meets
all of the following criteria.
(1) The well otherwise meets the criteria in the definition of a
qualified deep well in Sec. 203.0.
(2) The delay in production occurred after reaching total depth in
the well.
(3) Production (other than test production) was expected to begin
from the well before the applicable deadline in the definition of a
qualified deep well in Sec. 203.0. You must provide a credible activity
schedule with supporting documentation.
(4) The delay in beginning production is for reasons beyond your
control, such as adverse weather and accidents which BSEE deems were
unavoidable.
Sec. 203.45 If I drill a certified unsuccessful well, what royalty relief
will my lease earn?
Your lease may earn a royalty suspension supplement. Subject to
paragraph (d) of this section, the royalty suspension supplement is in
addition to any royalty suspension volume your lease may earn under
Sec. 203.41.
(a) If you drill a certified unsuccessful well and you satisfy the
administrative requirements of Sec. 203.47, subject to the price
conditions in Sec. 203.48, your lease earns an RSS shown in the
following table. The RSS is shown in billions of cubic feet of gas
equivalent (BCFE) or in thousands of cubic feet of gas equivalent (MCFE)
and is applicable to oil and gas production as prescribed in Sec.
203.46.
------------------------------------------------------------------------
Then your lease earns an RSS
on this volume of oil and
If you have a certified unsuccessful well gas production as prescribed
that is:-- in this section and Sec.
203.46:--
------------------------------------------------------------------------
(1) An original well and your lease has 5 BCFE.
not produced gas or oil from a deep well
or an ultra-deep well,
(2) A sidetrack (with a sidetrack measured 0.8 BCFE plus 120 MCFE times
depth of at least 10,000 feet) and your sidetrack measured depth
lease has not produced gas or oil from a (rounded to the nearest 100
deep well or an ultra-deep well, feet) but no more than 5
BCFE.
(3) An original well or a sidetrack (with 2 BCFE.
a sidetrack measured depth of at least
10,000 feet) and your lease has produced
gas or oil from a deep well with a
perforated interval the top of which is
from 15,000 to less than 18,000 feet TVD
SS,
------------------------------------------------------------------------
(b) This paragraph applies to oil and gas volumes you report on the
OGOR-A for your lease under 30 CFR 1210.102.
(1) You must apply the RSS prescribed in paragraph (a) of this
section, in accordance with the requirements in Sec. 203.46, to all oil
and gas produced from the lease:
(i) On or after December 18, 2008, if your lease is located in water
more than 200 meters but less than 400 meters deep; or
(ii) On or after May 3, 2004, if your lease is located in water
partly or entirely less than 200 meters deep.
(2) Production to which an RSV applies under Sec. Sec. 203.31
through 203.33 and Sec. Sec. 203.41 through 203.43 does not count
toward the lease RSS. All other production, including production that is
not subject to royalty, counts toward the lease RSS.
Example 1: If you drill a certified unsuccessful well that is an
original well to a target 19,000 feet TVD SS, your lease earns an RSS of
5 BCFE that would be applied to gas
[[Page 26]]
and oil production if your lease has not previously produced from a deep
well or an ultra-deep well, or you earn an RSS of 2 BCFE of gas and oil
production if your lease has previously produced from a deep well with a
perforated interval from 15,000 to less than 18,000 feet TVD SS, as
prescribed in Sec. 203.46.
Example 2: If you drill a certified unsuccessful well that is a
sidetrack that reaches a target 19,000 feet TVD SS, that has a sidetrack
measured depth of 12,545 feet, and your lease has not produced gas or
oil from any deep well or ultra-deep well, BSEE rounds the sidetrack
measured depth to 12,500 feet and your lease earns an RSS of 2.3 BCFE of
gas and oil production as prescribed in Sec. 203.45.
(c) The conversion from oil to gas for using the royalty suspension
supplement is specified in Sec. 203.73.
(d) Each lease is eligible for up to two royalty suspension
supplements. Therefore, the total royalty suspension supplement for a
lease cannot exceed 10 BCFE.
(1) You may not earn more than one royalty suspension supplement
from a single wellbore.
(2) If you begin drilling a certified unsuccessful well on one lease
but the completion target is on a second lease, the entire royalty
suspension supplement belongs to the second lease. However, if the
target straddles a lease line, the lease where the surface of the well
is located earns the royalty suspension supplement.
(e) If the same wellbore that earns an RSS as a certified
unsuccessful well later produces from a perforated interval the top of
which is 15,000 feet TVD or deeper and becomes a qualified well, it will
be subject to the following conditions:
(1) Beginning on the date production starts, you must stop applying
the royalty suspension supplement earned by that wellbore to your lease
production.
(2) If the completion of this qualified well is on your lease or, in
the case of a directional well, is on another lease, then you must
subtract from the royalty suspension volume earned by that qualified
well the royalty suspension supplement amounts earned by that wellbore
that have already been applied either on your lease or any other lease.
The difference represents the royalty suspension volume earned by the
qualified well.
(f) If the same wellbore that earned a royalty suspension supplement
later has a sidetrack drilled from that wellbore, you are not required
to subtract any royalty suspension supplement earned by that wellbore
from the royalty suspension volume that may be earned by the sidetrack.
(g) You owe minimum royalties or rentals in accordance with your
lease terms notwithstanding any royalty suspension supplements under
this section.
Sec. 203.46 To which production do I apply the royalty suspension
supplements from drilling one or two certified unsuccessful wells on my lease?
(a) Subject to the requirements of Sec. Sec. 203.40, 203.43,
203.45, 203.47, and 203.48 you must apply an RSS in Sec. 203.45 to the
earliest oil and gas production:
(1) Occurring on and after the day you file the information under
Sec. 203.47(b),
(2) From, or allocated under a BSEE-approved unit agreement to, the
lease on which the certified unsuccessful well was drilled, without
regard to the drilling depth of the well producing the gas or oil.
(b) If you have a royalty suspension volume for the lease under
Sec. 203.41, you must use the royalty suspension volumes for gas
produced from qualified wells on the lease before using royalty
suspension supplements for gas produced from qualified wells.
Example to paragraph (b): You have two shallow oil wells on your
lease. Then you drill a certified unsuccessful well and earn a royalty
suspension supplement of 5 BCFE. Thereafter, you begin production from
an original well that is a qualified well that earns a royalty
suspension volume of 15 BCF. You use only 2 BCFE of the royalty
suspension supplement before the oil wells deplete. You must use up the
15 BCF of royalty suspension volume before you use the remaining 3 BCFE
of the royalty suspension supplement for gas produced from the qualified
well.
(c) If you have no current production on which to apply the RSS
allowed under Sec. 203.45, your RSS applies to the earliest subsequent
production of gas and oil from, or allocated under a BSEE-approved unit
agreement to, your lease.
[[Page 27]]
(d) Unused royalty suspension supplements transfer to a successor
lessee and expire with the lease.
(e) You may not apply the RSS allowed under Sec. 203.45 to
production from any other lease, except for production allocated to your
lease from a BSEE-approved unit agreement. If your certified
unsuccessful well is on a lease subject to a BSEE-approved unit
agreement, the lessees of other leases in the unit may not apply any
portion of the RSS for your lease to production from the other leases in
the unit.
(f) You must begin or resume paying royalties when cumulative gas
and oil production from, or allocated under a BSEE-approved unit
agreement to, your lease (excluding any gas produced from qualified
wells subject to a royalty suspension volume allowed under Sec. 203.41)
reaches the applicable royalty suspension supplement. For the month in
which the cumulative production reaches this royalty suspension
supplement, you owe royalties on the portion of gas or oil production
that exceeds the amount of the royalty suspension supplement remaining
at the beginning of that month.
Sec. 203.47 What administrative steps do I take to obtain and use
the royalty suspension supplement?
(a) Before you start drilling a well on your lease targeted to a
reservoir at least 18,000 feet TVD SS, you must notify, in writing, the
BSEE Regional Supervisor for Production and Development of your intent
to begin drilling operations and the depth of the target.
(b) After drilling the well, you must provide the BSEE Regional
Supervisor for Production and Development within 60 days after reaching
the total depth in your well:
(1) Information that allows BSEE to confirm that you drilled a
certified unsuccessful well as defined under Sec. 203.0, including:
(i) Well log data, if your original well or sidetrack does not meet
the producibility requirements of 30 CFR part 550, subpart A; or
(ii) Well log, well test, seismic, and economic data, if your well
does meet the producibility requirements of 30 CFR part 550, subpart A;
and
(2) Information that allows BSEE to confirm the size of the royalty
suspension supplement for a sidetrack, including sidetrack measured
depth and supporting documentation.
(c) If you commenced drilling a well that otherwise meets the
criteria for a certified unsuccessful well on a lease located entirely
in more than 200 meters and entirely less than 400 meters of water on or
after May 18, 2007, and finished it before December 18, 2008, you must
provide the information in paragraph (b) of this section no later than
February 17, 2009.
Sec. 203.48 Do I keep royalty relief if prices rise significantly?
(a) You must pay royalties on all gas and oil production for which
an RSV or an RSS otherwise would be allowed under Sec. Sec. 203.40
through 203.47 for any calendar year when the average daily closing
NYMEX natural gas price exceeds the applicable threshold price shown in
the following table.
------------------------------------------------------------------------
For a lease located in The applicable threshold
water . . . And issued . . . price is . . .
------------------------------------------------------------------------
(1) Partly or entirely before December 18, $10.15 per MMBtu,
less than 200 meters 2008, adjusted annually after
deep, calendar year 2007 for
inflation.
(2) Partly or entirely after December 18, $4.55 per MMBtu, adjusted
less than 200 meters 2008, annually after calendar
deep, year 2007 for inflation
unless the lease terms
prescribe a different
price threshold.
(3) Entirely more than on any date, $4.55 per MMBtu, adjusted
200 meters and annually after calendar
entirely less than year 2007 for inflation
400 meters deep, unless the lease terms
prescribe a different
price threshold.
------------------------------------------------------------------------
(b) Determine the threshold price for any calendar year after 2007
by adjusting the threshold price in the previous year by the percentage
that the implicit price deflator for the gross domestic product, as
published by the Department of Commerce, changed during the calendar
year.
(c) You must pay any royalty due under this section no later than
March
[[Page 28]]
31 of the year following the calendar year for which you owe royalty. If
you do not pay by that date, you must pay late payment interest under 30
CFR 1218.54 from April 1 until the date of payment.
(d) Production volumes on which you must pay royalty under this
section count as part of your RSV and RSS.
Sec. 203.49 May I substitute the deep gas drilling provisions in this part
for the deep gas royalty relief provided in my lease terms?
(a) You may exercise an option to replace the applicable lease terms
for royalty relief related to deep-well drilling with those in Sec.
203.0 and Sec. Sec. 203.40 through 203.48 if you have a lease issued
with royalty relief provisions for deep-well drilling. Such leases:
(1) Must be issued as part of an OCS lease sale held after January
1, 2001, and before April 1, 2004; and
(2) Must be located wholly west of 87 degrees, 30 minutes West
longitude in the GOM entirely or partly in water less than 200 meters
deep.
(b) To exercise the option under paragraph (a) of this section, you
must notify, in writing, the BSEE Regional Supervisor for Production and
Development of your decision before September 1, 2004, or 180 days after
your lease is issued, whichever is later, and specify the lease and
block number.
(c) Once you exercise the option under paragraph (a) of this
section, you are subject to all the activity, timing, and administrative
requirements pertaining to deep gas royalty relief as specified in
Sec. Sec. 203.40 through 203.48.
(d) Exercising the option under paragraph (a) of this section is
irrevocable. If you do not exercise this option, then the terms of your
lease apply.
Royalty Relief for End-of-Life Leases
Sec. 203.50 Who may apply for end-of-life royalty relief?
You may apply for royalty relief in two situations.
(a) Your end-of-life lease (as defined in Sec. 203.2) is an oil and
gas lease and has average daily production of at least 100 barrels of
oil equivalent (BOE) per month (as calculated in Sec. 203.73) in at
least 12 of the past 15 months. The most recent of these 12 months are
considered the qualifying months. These 12 months should reflect the
basic operation you intend to use until your resources are depleted. If
you changed your operation significantly (e.g., begin re-injecting
rather than recovering gas) during the qualifying months, or if you do
so while we are processing your application, we may defer action on your
application until you revise it to show the new circumstances.
(b) Your end-of-life lease is other than an oil and gas lease (e.g.,
sulphur) and has production in at least 12 of the past 15 months. The
most recent of these 12 months are considered the qualifying months.
Sec. 203.51 How do I apply for end-of-life royalty relief?
You must submit a complete application and the required fee to the
appropriate BSEE Regional Director. Your BSEE regional office will
provide specific guidance on the report formats. A complete application
for relief includes:
(a) An administrative information report (specified in Sec. 203.83)
and
(b) A net revenue and relief justification report (specified in
Sec. 203.84).
Sec. 203.52 What criteria must I meet to get relief?
(a) To qualify for relief, you must demonstrate that the sum of
royalty payments over the 12 qualifying months exceeds 75 percent of the
sum of net revenues (before-royalty revenues minus allowable costs, as
defined in Sec. 203.84).
(b) To re-qualify for relief, e.g., either applying for additional
relief on top of relief already granted, or applying for relief sometime
after your earlier agreement terminated, you must demonstrate that:
(1) You have met the criterion listed in paragraph (a) of this
section, and
(2) The 12 required qualifying months of operation have occurred
under the current royalty arrangement.
Sec. 203.53 What relief will BSEE grant?
(a) If we approve your application and you meet certain conditions,
we
[[Page 29]]
will reduce the pre-application effective royalty rate by one-half on
production up to the relief volume amount. If you produce more than the
relief volume amount:
(1) We will impose a royalty rate equal to 1.5 times the effective
royalty rate on your additional production up to twice the relief volume
amount; and
(2) We will impose a royalty rate equal to the effective rate on all
production greater than twice the relief volume amount.
(b) Regardless of the level of production or prices (see Sec.
203.54), royalty payments due under end-of-life relief will not exceed
the royalty obligations that would have been due at the effective
royalty rate.
(1) The effective royalty rate is the average lease rate paid on
production during the 12 qualifying months.
(2) The relief volume amount is the average monthly BOE production
for the 12 qualifying months.
Sec. 203.54 How does my relief arrangement for an oil and gas lease operate
if prices rise sharply?
In those months when your current reference price rises by at least
25 percent above your base reference price, you must pay the effective
royalty rate on all monthly production.
(a) Your current reference price is a weighted average of daily
closing prices on the NYMEX for light sweet crude oil and natural gas
over the most recent full 12 calendar months;
(b) Your base reference price is a weighted average of daily closing
prices on the NYMEX for light sweet crude oil and natural gas during the
qualifying months; and
(c) Your weighting factors are the proportions of your total
production volume (in BOE) provided by oil and gas during the qualifying
months.
Sec. 203.55 Under what conditions can my end-of-life royalty
relief arrangement for an oil and gas lease be ended?
(a) If you have an end-of-life royalty relief arrangement, you may
renounce it at any time. The lease rate will return to the effective
rate during the qualifying period in the first full month following our
receipt of your renouncement of the relief arrangement.
(b) If you pay the effective lease rate for 12 consecutive months,
we will terminate your relief. The lease rate will return to the
effective rate in the first full month following this termination.
(c) We may stipulate in the letter of approval for individual cases
certain events that would cause us to terminate relief because they are
inconsistent with an end-of-life situation.
Sec. 203.56 Does relief transfer when a lease is assigned?
Yes. Royalty relief is based on the lease circumstances, not
ownership. It transfers upon lease assignment.
Royalty Relief for Pre-Act Deep Water Leases and for Development and
Expansion Projects
Sec. 203.60 Who may apply for royalty relief on a case-by-case basis
in deep water in the Gulf of Mexico or offshore of Alaska?
You may apply for royalty relief under Sec. Sec. 203.61(b) and
203.62 for an individual lease, unit or project if you:
(a) Hold a pre-Act lease (as defined in Sec. 203.0) that we have
assigned to an authorized field (as defined in Sec. 203.0);
(b) Propose an expansion project (as defined in Sec. 203.0); or
(c) Propose a development project (as defined in Sec. 203.0).
Sec. 203.61 How do I assess my chances for getting relief?
You may ask for a nonbinding assessment (a formal opinion on whether
a field would qualify for royalty relief) before turning in your first
complete application on an authorized field. This field must have a
qualifying well under 30 CFR part 550, subpart A, or be on a lease that
has allocated production under an approved unit agreement.
(a) To request a nonbinding assessment, you must:
(1) Submit a draft application in the format and detail specified in
guidance from the BSEE regional office for the GOM;
(2) Propose to drill at least one more appraisal well if you get a
favorable assessment; and
(3) Pay a fee under Sec. 203.3.
[[Page 30]]
(b) You must wait at least 90 days after receiving our assessment to
apply for relief under Sec. 203.62.
(c) This assessment is not binding because a complete application
may contain more accurate information that does not support our original
assessment. It will help you decide whether your proposed inputs for
evaluating economic viability and your supporting data and assumptions
are adequate.
Sec. 203.62 How do I apply for relief?
(a) You must send a complete application and the required fee to the
BSEE Regional Director for your region.
(b) Your application for royalty relief offshore Alaska or in deep
water in the GOM must include an original and two copies (one set of
digital information) of:
(1) Administrative information report;
(2) Economic viability and relief justification report;
(3) G&G report;
(4) Engineering report;
(5) Production report; and
(6) Cost report.
(c) Section 203.82 explains why we are authorized to require these
reports.
(d) Sections 203.81, 203.83, and 203.85 through 203.89 describe what
these reports must include. The BSEE regional office for your region
will guide you on the format for the required reports, and we encourage
you to contact this office before preparing your application for this
guidance.
Sec. 203.63 Does my application have to include all leases in the field?
(a) For authorized fields, we will accept only one joint application
for all leases that are part of the designated field on the date of
application, except as provided in paragraph (a)(3) of this section and
Sec. 203.64. However, we will evaluate all acreage that may eventually
become part of the authorized field. Therefore, if you have any other
leases that you believe may eventually be part of the authorized field,
you must submit data for these leases according to Sec. 203.81.
(1) The Regional Director maintains a Field Names Master List with
updates of all leases in each designated field.
(2) To avoid sharing proprietary data with other lessees on the
field, you may submit your proprietary G&G report separately from the
rest of your application. Your application is not complete until we
receive all the required information for each lease on the field. We
will not disclose proprietary data when explaining our assumptions and
reasons for our determinations under Sec. 203.67.
(3) We will not require a joint application if you show good cause
and honest effort to get all lessees in the field to participate. If you
must exclude a lease from your application because its lessee will not
participate, that lease is ineligible for the royalty relief for the
designated field.
(b) If your application seeks only relief for a development project
or an expansion project, your application does not have to include all
leases in the field.
Sec. 203.64 How many applications may I file on a field
or a development project?
You may file one complete application for royalty relief during the
life of the field or for a development project or an expansion project
designed to produce a reservoir or set of reservoirs. However, you may
send another application if:
(a) You are eligible to apply for a redetermination under Sec.
203.74;
(b) You apply for royalty relief for an expansion project;
(c) You withdraw the application before we make a determination; or
(d) You apply for end-of-life royalty relief.
Sec. 203.65 How long will BSEE take to evaluate my application?
(a) We will determine within 20 working days if your application for
royalty relief is complete. If your application is incomplete, we will
explain in writing what it needs. If you withdraw a complete
application, you may reapply.
(b) We will evaluate your first application on a field within 180
days, evaluate your first application on a development project or an
expansion project
[[Page 31]]
within 150 days and evaluate a redetermination under Sec. 203.75 within
120 days after we determine that it is complete.
(c) We may ask to extend the review period for your application
under the conditions in the following table.
------------------------------------------------------------------------
If . . . Then we may . . .
------------------------------------------------------------------------
(1) We need more records to audit sunk Ask to extend the 120-day or
costs, 180-day evaluation period. The
extension we request will
equal the number of days
between when you receive our
request for records and the
day we receive the records.
(2) We cannot evaluate your application Add another 30 days. We may add
for a valid reason, such as missing more than 30 days, but only if
vital information or inconsistent or you agree.
inconclusive supporting data,
(3) We need more data, explanations, or Ask to extend the 120-day or
revision, 180-day evaluation period. The
extension we request will
equal the number of days
between when you receive our
request and the day we receive
the information.
------------------------------------------------------------------------
(d) We may change your assumptions under Sec. 203.62 if our
technical evaluation reveals others that are more appropriate. We may
consult with you before a final decision and will explain any changes.
(e) We will notify all designated lease operators within a field
when royalty relief is granted.
Sec. 203.66 What happens if BSEE does not act in the time allowed?
If we do not act within the timeframes established under Sec.
203.65, you get royalty relief according to the following table.
------------------------------------------------------------------------
And we do not decide
If you apply for royalty within the time As long as you
relief for specified,
------------------------------------------------------------------------
(a) An authorized field, You get the minimum Abide by Sec. Sec.
suspension volumes 203.70 and 203.76.
specified in Sec.
203.69,
(b) An expansion project, You get a royalty Abide by Sec. Sec.
suspension for the 203.70 and 203.76.
first year of
production,
(c) A development project, You get a royalty Abide by Sec. Sec.
suspension for 203.70 and 203.76.
initial production
for the number of
months that a
decision is delayed
beyond the
stipulated
timeframes set by
Sec. 203.65, plus
all the royalty
suspension volume
for which you
qualify,
------------------------------------------------------------------------
Sec. 203.67 What economic criteria must I meet to get royalty relief
on an authorized field or project?
We will not approve applications if we determine that royalty relief
cannot make the field, development project, or expansion project
economically viable. Your field or project must be uneconomic while you
are paying royalties and must become economic with royalty relief.
Sec. 203.68 What pre-application costs will BSEE consider in determining
economic viability?
(a) We will not consider ineligible costs as set forth in Sec.
203.89(h) in determining economic viability for purposes of royalty
relief.
(b) We will consider sunk costs according to the following table.
----------------------------------------------------------------------------------------------------------------
We will . . . When determining . . .
----------------------------------------------------------------------------------------------------------------
(1) Include sunk costs, Whether a field that includes a pre-Act lease which has
not produced, other than test production, before the
application or redetermination submission date needs
relief to become economic.
(2) Not include sunk costs, Whether an authorized field, a development project, or an
expansion project can become economic with full relief
(see Sec. 203.67).
(3) Not include sunk costs, How much suspension volume is necessary to make the field,
a development project, or an expansion project economic
(see Sec. 203.69(c)).
(4) Include sunk costs for the project discovery Whether a development project or an expansion project
well on each lease, needs relief to become economic.
----------------------------------------------------------------------------------------------------------------
[[Page 32]]
Sec. 203.69 If my application is approved, what royalty relief
will I receive?
If we approve your application, subject to certain conditions, we
will not collect royalties on a specified suspension volume for your
field, development project, or expansion project. Suspension volumes
include volumes allocated to a lease under an approved unit agreement,
but exclude any volumes of production that are not normally royalty-
bearing under the lease or the regulations of this chapter (e.g., fuel
gas).
(a) For authorized fields, the minimum royalty-suspension volumes
are:
(1) 17.5 million barrels of oil equivalent (MMBOE) for fields in 200
to 400 meters of water;
(2) 52.5 MMBOE for fields in 400 to 800 meters of water; and
(3) 87.5 MMBOE for fields in more than 800 meters of water.
(b) For development projects, any relief we grant applies only to
project wells and replaces the royalty relief, if any, with which we
issued your lease.
(c) If your project is economic given the royalty relief with which
we issued your lease, we will reject the application.
(d) If the lease has earned or may earn deep gas royalty relief
under Sec. Sec. 203.40 through 203.49 or ultra-deep gas royalty relief
under Sec. Sec. 203.30 through 203.36, we will take the deep gas
royalty relief or ultra-deep gas royalty relief into account in
determining whether further royalty relief for a development project is
necessary for production to be economic.
(e) If neither paragraph (c) nor (d) of this section apply, the
minimum royalty suspension volumes are as shown in the following table:
------------------------------------------------------------------------
The minimum royalty
For . . . suspension volume is . Plus . . .
. .
------------------------------------------------------------------------
(1) RS leases in the GOM or A volume equal to the 10 percent of
leases offshore Alaska, combined royalty the median of
suspension volumes the
(or the volume distribution of
equivalent based on known
the data in your recoverable
approved application resources upon
for other forms of which BSEE
royalty suspension) based approval
with which BSEE of your
issued the leases application
participating in the from all
application that have reservoirs
or plan a well into a included in the
reservoir identified project.
in the application,
(2) Leases offshore Alaska or A volume equal to 10
other deep water GOM leases percent of the median
issued in sales after of the distribution
November 28, 2000, of known recoverable
resources upon which
BSEE based approval
of your application
from all reservoirs
included in the
project.
------------------------------------------------------------------------
(f) If your application includes pre-Act leases in different
categories of water depth, we apply the minimum royalty suspension
volume for the deepest such lease then assigned to the field. We base
the water depth and makeup of a field on the water-depth delineations in
the ``Lease Terms and Economic Conditions'' map and the ``Fields
Directory'' documents and updates in effect at the time your application
is deemed complete. These publications are available from the BSEE Gulf
of Mexico Regional Office.
(g) You will get a royalty suspension volume above the minimum if we
determine that you need more to make the field or development project
economic.
(h) For expansion projects, the minimum royalty suspension volume
equals 10 percent of the median of the distribution of known recoverable
resources upon which we based approval of your application from all
reservoirs included in your project plus any suspension volumes required
under Sec. 203.66. If we determine that your expansion project may be
economic only with more relief, we will determine and grant you the
royalty suspension volume necessary to make the project economic.
(i) The royalty suspension volume applicable to specific leases will
continue through the end of the month in which cumulative production
reaches that volume. You must calculate cumulative production from all
the leases in the authorized field or project that are entitled to share
the royalty suspension volume.
[[Page 33]]
Sec. 203.70 What information must I provide after BSEE approves relief?
You must submit reports to us as indicated in the following table.
Sections 203.81, 203.90, and 203.91 describe what these reports must
include. The BSEE Regional Office for your region will prescribe the
formats.
------------------------------------------------------------------------
Required report When due to BSEE Due date extensions
------------------------------------------------------------------------
(a) Fabricator's Within 18 months BSEE Director may
confirmation report. after approval of grant you an
relief. extension under
Sec. 203.79(c)
for up to 6 months.
(b) Post-production report. Within 120 days With acceptable
after the start of justification from
production that is you, the BSEE
subject to the Regional Director
approved royalty for your region may
suspension volume. extend the due date
up to 30 days.
------------------------------------------------------------------------
Sec. 203.71 How does BSEE allocate a field's suspension volume between
my lease and other leases on my field?
The allocation depends on when production occurs, when we issued the
lease, when we assigned it to the field, and whether we award the volume
suspension by an approved application or establish it in the lease
terms, as prescribed in this section.
(a) If your authorized field has an approved royalty suspension
volume under Sec. Sec. 203.67 and 203.69, we will suspend payment of
royalties on production from all leases in the field that participate in
the application until their cumulative production equals the approved
volume. The following conditions also apply:
------------------------------------------------------------------------
If . . . Then . . . And . . .
------------------------------------------------------------------------
(1) We assign an eligible We will not change Production from the
lease to your authorized your authorized assigned eligible
field after we approve field's royalty lease(s) counts
relief, suspension volume toward the royalty
determined under suspension volume
Sec. 203.69, for the authorized
field, but the
eligible lease will
not share any
remaining royalty
suspension volume
for the authorized
field after the
eligible lease has
produced the volume
applicable under 30
CFR 560.114.
(2) We assign a pre-Act or We will not change The assigned
post-November 2000 deep your field's lease(s) may share
water lease to your field royalty suspension in any remaining
after we approve your volume, royalty relief by
application, filing the short-
form application
specified in Sec.
203.83 and
authorized in Sec.
203.82. An
assigned RS lease
also gets any
portion of its
royalty suspension
volume remaining
even after the
field has produced
the approved relief
volume.
(3) We assign another lease In our evaluation of (i) You toll the
that you operate to your your authorized time period for
field while we are field, we will take evaluation until
evaluating your into account the you modify your
application, value of any application to be
royalty relief the consistent with the
added lease already newly constituted
has under 30 CFR field;
560.114 or its (ii) We have an
lease document. If additional 60 days
we find your to review the new
authorized field information; and
still needs (iii) The assigned
additional royalty pre-Act lease or
suspension volume, royalty suspension
that volume will be lease shares the
at least the royalty suspension
combined royalty we grant to the
suspension volume newly constituted
to which all added field. An eligible
leases on the field lease does not
are entitled, or share the royalty
the minimum suspension we grant
suspension volume to the new field.
of the authorized If you do not agree
field, whichever is to toll, we will
greater, have to reject your
application due to
incomplete
information.
Production from an
assigned eligible
lease counts toward
the royalty
suspension volume
that we grant under
Sec. 203.69 for
your authorized
field, but you will
not owe royalty on
production from the
eligible lease
until it has
produced the volume
applicable under 30
CFR 560.114.
[[Page 34]]
(4) We assign another We will change your (i) You both toll
operator's lease to your field's minimum the time period for
field while we are suspension volume evaluation until
evaluating your provided the both of you modify
application, assigned lease your application to
joins the be consistent with
application and is the new field;
entitled to a (ii) We have an
larger minimum additional 60 days
suspension volume, to review the new
information; and
(iii) The assigned
lease(s) shares the
royalty suspension
we grant to the new
field. If you (the
original applicant)
do not agree to
toll, the other
operator's lease
retains any
suspension volume
it has or may share
in any relief that
we grant by filing
the short form
application
specified in Sec.
203.83 and
authorized in Sec.
203.82.
(5) We reassign a well on a The past production For any field based
pre-Act, eligible, or from the well relief, the past
royalty suspension lease counts toward the production for that
from field A to field B, royalty suspension well will not count
volume that we toward any royalty
grant under Sec. suspension volume
203.69 to field B, that we grant under
Sec. 203.69 to
field A. Moreover,
past production
from that well will
count toward the
royalty suspension
volume applicable
for the lease under
30 CFR 560.114 if
the well is on an
eligible lease or
under 30 CFR
560.124 if the well
is on a royalty
suspension lease.
------------------------------------------------------------------------
(b) When a project has more than one lease, the royalty suspension
volume for each lease equals that lease's actual production from the
project (or production allocated under an approved unit agreement) until
total production for all leases in the project equals the project's
approved royalty suspension volume.
(c) You may receive a royalty-suspension volume only if your entire
lease is west of 87 degrees, 30 minutes West longitude. If the field
lies on both sides of this meridian, only leases located entirely west
of the meridian will receive a royalty-suspension volume.
Sec. 203.72 Can my lease receive more than one suspension volume?
Yes. You may apply for royalty relief that involves more than one
suspension volume under Sec. 203.62 in two circumstances.
(a) Each field that includes your lease may receive a separate
royalty-suspension volume, if it meets the evaluation criteria of Sec.
203.67.
(b) An expansion project on your lease may receive a separate
royalty-suspension volume, even if we have already granted a royalty-
suspension volume to the field that encompasses the project. But the
reserves associated with the project must not have been part of our
original determination, and the project must meet the evaluation
criteria of Sec. 203.67.
Sec. 203.73 How do suspension volumes apply to natural gas?
You must measure natural gas production under the royalty-suspension
volume as follows: 5.62 thousand cubic feet of natural gas, measured in
accordance with 30 CFR part 250, subpart L, equals one barrel of oil
equivalent.
Sec. 203.74 When will BSEE reconsider its determination?
You may request a redetermination after we withdraw approval or
after you renounce royalty relief, unless we withdraw approval due to
your providing false or intentionally inaccurate information. Under
certain conditions you may also request a redetermination if we deny
your application or if you want your approved royalty suspension volume
to change. In these instances, to be eligible for a redetermination, at
least one of the following four conditions must occur.
(a) You have significant new G&G data and you previously have not
either requested a redetermination or reapplied for relief after we
withdrew approval or you relinquished royalty relief. ``Significant''
means that the new G&G data:
(1) Results from drilling new wells or getting new three-dimensional
seismic data and information (but not reinterpreting old data);
(2) Did not exist at the time of the earlier application; and
[[Page 35]]
(3) Changes your estimates of gross resource size, quality, or
projected flow rates enough to materially affect the results of our
earlier determination.
(b) You demonstrate in your new application that the technology that
most efficiently develops this field or lease was not considered or
deemed feasible in the original application. Your newly proposed
technology must improve the profitability, under equivalent market
conditions, of the field or lease relative to the development system
proposed in the prior application.
(c) Your current reference price decreases by more than 25 percent
from your base reference price as calculated under this paragraph.
(1) Your current reference price is a weighted-average of daily
closing prices on the NYMEX for light sweet crude oil and natural gas
over the most recent full 12 calendar months;
(2) Your base reference price is a weighted average of daily closing
prices on the NYMEX for light sweet crude oil and natural gas for the
full 12 calendar months preceding the date of your most recently
approved application for this royalty relief; and
(3) The weighting factors are the proportions of the total
production volume (in BOE) for oil and gas associated with the most
likely scenario (identified in Sec. Sec. 203.85 and 203.88) from your
most recently approved application for this royalty relief.
(d) Before starting to build your development and production system,
you have revised your estimated development costs, and they are more
than 120 percent of the eligible development costs associated with the
most likely scenario from your most recently approved application for
this royalty relief.
Sec. 203.75 What risk do I run if I request a redetermination?
If you request a redetermination after we have granted you a
suspension volume, you could lose some or all of the previously granted
relief. This can happen because you must file a new complete application
and pay the required fee, as discussed in Sec. 203.62. We will evaluate
your application under Sec. 203.67 using the conditions prevailing at
the time of your redetermination request. In our evaluation, we may find
that you should receive a larger, equivalent, smaller, or no suspension
volume. This means we could find that you do not qualify for the amount
of relief previously granted or for any relief at all.
Sec. 203.76 When might BSEE withdraw or reduce the approved size
of my relief?
We will withdraw approval of relief for any of the following
reasons.
(a) You change the type of development system proposed in your
application (e.g., change from a fixed platform to floating production
system, or from an independent development and production system to one
with subsea wells tied back to a host production facility, etc.).
(b) You do not start building the proposed development and
production system within 18 months of the date we approved your
application, unless the BSEE Director grants you an extension under
Sec. 203.79(c). If you start building the proposed system and then
suspend its construction before completion, and you do not restart
continuous building of the proposed system within 18 months of our
approval, we will withdraw the relief we granted.
(c) Your actual development costs are less than 80 percent of the
eligible development costs estimated in your application's most likely
scenario, and you do not report that fact in your post-production
development report (Sec. 203.70). Development costs are those
expenditures defined in Sec. 203.89(b) incurred between the application
submission date and start of production. If you report this fact in the
post-production development report, you may retain the lesser of 50
percent of the original royalty suspension volume or 50 percent of the
median of the distribution of the potentially recoverable resources
anticipated in your application.
(d) We granted you a royalty-suspension volume after you qualified
for a redetermination under Sec. 203.74(c), and we find out your actual
development costs are less than 90 percent of the eligible development
costs associated with your application's most likely scenario.
Development costs are those
[[Page 36]]
expenditures defined in Sec. 203.89(b) incurred between your
application submission date and start of production.
(e) You do not send us the fabrication confirmation report or the
post-production development report, or you provide false or
intentionally inaccurate information that was material to our granting
royalty relief under this section. You must pay royalties and late-
payment interest determined under 30 U.S.C. 1721 and 30 CFR 1218.54 on
all volumes for which you used the royalty suspension. You also may be
subject to penalties under other provisions of law.
Sec. 203.77 May I voluntarily give up relief if conditions change?
Yes, you may voluntarily give up relief by sending a letter to that
effect to the BSEE Regional office for your region.
Sec. 203.78 Do I keep relief approved by BSEE under this part for my lease,
unit or project if prices rise significantly?
If prices rise above a base price threshold for light sweet crude
oil or natural gas, you must pay full royalties on production otherwise
subject to royalty relief approved by BSEE under Sec. Sec. 203.60-
203.77 for your lease, unit or project as prescribed in this section.
(a) The following table shows the base price threshold for various
types of leases, subject to paragraph (b) of this section. Note that,
for post-November 2000 deepwater leases in the GOM, price thresholds
apply on a lease basis, so different leases on the same development
project or expansion project approved for royalty relief may have
different price thresholds.
------------------------------------------------------------------------
The base price threshold is
For . . . . . .
------------------------------------------------------------------------
(1) Pre-Act leases in the GOM, set by statute.
(2) Post-November 2000 deep water leases indicated in your original
in the GOM or leases offshore of Alaska lease agreement or, if
for which the lease or Notice of Sale set none, those in the Notice
a base price threshold, of Sale under which your
lease was issued.
(3) Post-November 2000 deep water leases the threshold set by statute
in the GOM or leases offshore of Alaska for pre-Act leases.
for which the lease or Notice of Sale did
not set a base price threshold,
------------------------------------------------------------------------
(b) An exception may occur if we determine that the price thresholds
in paragraphs (a)(2) or (a)(3) of this section mean the royalty
suspension volume set under Sec. 203.69 and in lease terms would
provide inadequate encouragement to increase production or development,
in which circumstance we could specify a different set of price
thresholds on a case-by-case basis.
(c) Suppose your base oil price threshold set under paragraph (a) is
$28.00 per barrel, and the daily closing NYMEX light sweet crude oil
prices for the previous calendar year exceeds $28.00 per barrel, as
adjusted in paragraph (h) of this section. In this case, we retract the
royalty relief authorized in this subpart and you must:
(1) Pay royalties on all oil production for the previous year at the
lease stipulated royalty rate plus interest (under 30 U.S.C. 1721 and 30
CFR 1218.54) by March 31 of the current calendar year, and
(2) Pay royalties on all your oil production in the current year.
(d) Suppose your base gas price threshold set under paragraph (a) is
$3.50 per million British thermal units (Btu), and the daily closing
NYMEX light sweet crude oil prices for the previous calendar year
exceeds $3.50 per million Btu, as adjusted in paragraph (h) of this
section. In this case, we retract the royalty relief authorized in this
subpart and you must:
(1) Pay royalties on all gas production for the previous year at the
lease stipulated royalty rate plus interest (under 30 U.S.C. 1721 and 30
CFR 1218.54) by March 31 of the current calendar year, and
(2) Pay royalties on all your gas production in the current year.
(e) Production under both paragraphs (c) and (d) of this section
counts as part of the royalty-suspension volume.
(f) You are entitled to a refund or credit, with interest, of
royalties paid on any production (that counts as part of the royalty-
suspension volume):
[[Page 37]]
(1) Of oil if the arithmetic average of the closing prices for the
current calendar year is $28.00 per barrel or less, as adjusted in
paragraph (h) of this section, and
(2) Of gas if the arithmetic average of the closing natural gas
prices for the current calendar year is $3.50 per million Btu or less,
as adjusted in paragraph (h) of this section.
(g) You must follow our regulations in the Office of Natural
Resources Revenue, 30 CFR chapter XII, for receiving refunds or credits.
(h) We change the prices referred to in paragraphs (c), (d), and (f)
of this section periodically. For pre-Act leases, these prices change
during each calendar year after 1994 by the percentage that the implicit
price deflator for the gross domestic product changed during the
preceding calendar year. For post-November 2000 deepwater leases, these
prices change as indicated in the lease instrument or in the Notice of
Sale under which we issued the lease.
Sec. 203.79 How do I appeal BSEE's decisions related to royalty relief
for a deepwater lease or a development or expansion project?
(a) Once we have designated your lease as part of a field and
notified you and other affected operators of the designation, you can
request reconsideration by sending the BSEE Director a letter within 15
days that also states your reasons. The BSEE Director's response is the
final agency action.
(b) Our decisions on your application for relief from paying royalty
under Sec. 203.67 and the royalty-suspension volumes under Sec. 203.69
are final agency actions.
(c) If you cannot start construction by the deadline in Sec.
203.76(b) for reasons beyond your control (e.g., strike at the
fabrication yard), you may request an extension up to 1 year by writing
the BSEE Director and stating your reasons. The BSEE Director's response
is the final agency action.
(d) We will notify you of all final agency actions by certified
mail, return receipt requested. Final agency actions are not subject to
appeal to the Interior Board of Land Appeals under 30 CFR part 290 and
43 CFR part 4. They are judicially reviewable under section 10(a) of the
Administrative Procedure Act (5 U.S.C. 702) only if you file an action
within 30 days of the date you receive our decision.
Sec. 203.80 When can I get royalty relief if I am not eligible
for royalty relief under other sections in the subpart?
We may grant royalty relief when it serves the statutory purposes
summarized in Sec. 203.1 and our formal relief programs, including but
not limited to the applicable levels of the royalty suspension volumes
and price thresholds, provide inadequate encouragement to promote
development or increase production. Unless your lease lies offshore of
Alaska or wholly west of 87 degrees, 30 minutes West longitude in the
GOM, your lease must be producing to qualify for relief. Before you may
apply for royalty relief apart from our programs for end-of-life leases
or for pre-Act deep water leases and development and expansion projects,
we must agree that your lease or project has two or more of the
following characteristics:
(a) The lease has produced for a substantial period and the lessee
can recover significant additional resources. Significant additional
resources mean enough to allow production for at least a year more than
would be profitable without royalty relief.
(b) Valuable facilities (e.g., a platform or pipeline that would be
removed upon lease relinquishment) exist that we do not expect a
successor lessee to use. If the facilities are located off the lease,
their preservation must depend on continued production from the lease
applying for royalty relief. We will only consider an allocable share of
costs for off-lease facilities in the relief application.
(c) A substantial risk exists that no new lessee will recover the
resources.
(d) The lessee made major efforts to reduce operating costs too
recently to use the formal program for royalty relief (e.g., recent
significant change in operations).
(e) Circumstances beyond the lessee's control, other than water
depth, preclude reliance on one of the existing royalty relief programs.
[[Page 38]]
Required Reports
Sec. 203.81 What supplemental reports do royalty-relief applications require?
(a) You must send us the supplemental reports, indicated in the
following table by an X, that apply to your field. Sections 203.83
through 203.91 describe these reports in detail.
----------------------------------------------------------------------------------------------------------------
Deep water
End-of-life --------------------------------------------------
Required reports lease Expansion Development
project Pre-act lease project
----------------------------------------------------------------------------------------------------------------
(1) Administrative information Report....... X X X X
(2) Net revenue & relief justification X ............... ...............
report.....................................
(3) Economic viability & relief ............... X X X
justification report (RSVP model inputs
justified by other required reports).......
(4) G&G report.............................. ............... X X X
(5) Engineering report...................... ............... X X X
(6) Production report....................... ............... X X X
(7) Deep water cost report.................. ............... X X X
(8) Fabricator's confirmation report........ ............... X X X
(9) Post-production development report...... ............... X X X
----------------------------------------------------------------------------------------------------------------
(b) You must certify that all information in your application,
fabricator's confirmation and post-production development reports is
accurate, complete, and conforms to the most recent content and
presentation guidelines available from the BSEE Regional office for your
region.
(c) With your application and post-production development report,
you must submit an additional report prepared by an independent CPA
that:
(1) Assesses the accuracy of the historical financial information in
your report; and
(2) Certifies that the content and presentation of the financial
data and information conform to our most recent guidelines on royalty
relief. This means the data and information must:
(i) Include only eligible costs that are incurred during the
qualification months; and
(ii) Be shown in the proper format.
(d) You must identify the people in the CPA firm who prepared the
reports referred to in paragraph (c) of this section and make them
available to us to respond to questions about the historical financial
information. We may also further review your records to support this
information.
Sec. 203.82 What is BSEE's authority to collect this information?
The Office of Management and Budget (OMB) approved the information
collection requirements in part 203 under 44 U.S.C. 3501 et seq., and
assigned OMB control number 1010-0071.
(a) We use the information to determine whether royalty relief will
result in production that wouldn't otherwise occur. We rely largely on
your information to make these determinations.
(1) Your application for royalty relief must contain enough
information on finances, economics, reservoirs, G&G characteristics,
production, and engineering estimates for us to determine whether:
(i) We should grant relief under the law, and
(ii) The requested relief will ultimately recover more resources and
return a reasonable profit on project investments.
(2) Your fabricator confirmation and post-production development
reports must contain enough information for us to verify that your
application reasonably represented your plans.
(b) Applicants (respondents) are Federal OCS oil and gas lessees.
Applications are required to obtain or retain a benefit. Therefore, if
you apply for royalty relief, you must provide this information. We will
protect information considered proprietary under applicable law and
under regulations at Sec. 203.63 and 30 CFR part 250.
(c) The Paperwork Reduction Act of 1995 requires us to inform you
that we may not conduct or sponsor, and you are not required to respond
to, a collection of information unless it displays a currently valid OMB
control number.
[[Page 39]]
(d) Send comments regarding any aspect of the collection of
information under this part, including suggestions for reducing the
burden, to the Information Collection Clearance Officer, Bureau of
Safety and Environmental Enforcement, 45600 Woodland Road, Sterling, VA
20166.
[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 36148, June 6, 2016]
Sec. 203.83 What is in an administrative information report?
This report identifies the field or lease for which royalty relief
is requested and must contain the following items:
(a) The field or lease name;
(b) The serial number of leases we have assigned to the field, names
of the lease title holders of record, the lease operators, and whether
any lease is part of a unit;
(c) Well number, API number, location, and status of each well that
has been drilled on the field or lease or project (not required for non-
oil and gas leases);
(d) The location of any new wells proposed under the terms of the
application (not required for non-oil and gas leases);
(e) A description of field or lease history;
(f) Full information as to whether you will pay royalties or a share
of production to anyone other than the United States, the amount you
will pay, and how much you will reduce this payment if we grant relief;
(g) The type of royalty relief you are requesting;
(h) Confirmation that BOEM approved a DOCD or supplemental DOCD
(Deep Water expansion project applications only); and
(i) A narrative description of the development activities associated
with the proposed capital investments and an explanation of proposed
timing of the activities and the effect on production (Deep Water
applications only).
Sec. 203.84 What is in a net revenue and relief justification report?
This report presents cash flow data for 12 qualifying months, using
the format specified in the ``Guidelines for the Application, Review,
Approval, and Administration of Royalty Relief for End-of-Life Leases'',
U.S. Department of the Interior, BSEE. Qualifying months for an oil and
gas lease are the most recent 12 months out of the last 15 months that
you produced at least 100 BOE per day on average. Qualifying months for
other than oil and gas leases are the most recent 12 of the last 15
months having some production.
(a) The cash flow table you submit must include historical data for:
(1) Lease production subject to royalty;
(2) Total revenues;
(3) Royalty payments out of production;
(4) Total allowable costs; and
(5) Transportation and processing costs.
(b) Do not include in your cash flow table the non-allowable costs
listed at 30 CFR 1220.013 or:
(1) OCS rental payments on the lease(s) in the application;
(2) Damages and losses;
(3) Taxes;
(4) Any costs associated with exploratory activities;
(5) Civil or criminal fines or penalties;
(6) Fees for your royalty relief application; and
(7) Costs associated with existing obligations (e.g., royalty
overrides or other forms of payment for acquiring the lease,
depreciation on previously acquired equipment or facilities).
(c) We may, in reviewing and evaluating your application, disallow
costs when you have not shown they are necessary to operate the lease,
or if they are inconsistent with end-of-life operations.
Sec. 203.85 What is in an economic viability and relief justification report?
This report should show that your project appears economic without
royalties and sunk costs using the RSVP model we provide. The format of
the report and the assumptions and parameters we specify are found in
the ``Guidelines for the Application, Review, Approval and
Administration of the Deep Water Royalty Relief Program,'' U.S.
Department of the Interior, BSEE. Clearly justify each parameter you set
in every scenario you
[[Page 40]]
specify in the RSVP. You may provide supplemental information, including
your own model and results. The economic viability and relief
justification report must contain the following items for an oil and gas
lease.
(a) Economic assumptions we provide which include:
(1) Starting oil and gas prices;
(2) Real price growth;
(3) Real cost growth or decline rate, if any;
(4) Base year;
(5) Range of discount rates; and
(6) Tax rate (for use in determining after-tax sunk costs).
(b) Analysis of projected cash flow (from the date of the
application using annual totals and constant dollar values) which shows:
(1) Oil and gas production;
(2) Total revenues;
(3) Capital expenditures;
(4) Operating costs;
(5) Transportation costs; and
(6) Before-tax net cash flow without royalties, overrides, sunk
costs, and ineligible costs.
(c) Discounted values which include:
(1) Discount rate used (selected from within the range we specify).
(2) Before-tax net present value without royalties, overrides, sunk
costs, and ineligible costs.
(d) Demonstrations that:
(1) All costs, gross production, and scheduling are consistent with
the data in the G&G, engineering, production, and cost reports
(Sec. Sec. 203.86 through 203.89) and
(2) The development and production scenarios provided in the various
reports are consistent with each other and with the proposed development
system. You can use up to three scenarios (conservative, most likely,
and optimistic), but you must link each to a specific range on the
distribution of resources from the RSVP Resource Module.
Sec. 203.86 What is in a G&G report?
This report supports the reserve and resource estimates used in the
economic evaluation and must contain each of the following elements.
(a) Seismic data which includes:
(1) Non-interpreted 2D/3D survey lines reflecting any available
state-of-the-art processing technique in a format readable by BSEE and
specified by the deep water royalty relief guidelines;
(2) Interpreted 2D/3D seismic survey lines reflecting any available
state-of-the-art processing technique identifying all known and
prospective pay horizons, wells, and fault cuts;
(3) Digital velocity surveys in the format of the GOM region's
letter to lessees of 10/1/90;
(4) Plat map of ``shot points;'' and
(5) ``Time slices'' of potential horizons.
(b) Well data which includes:
(1) Hard copies of all well logs in which--
(i) The 1-inch electric log shows pay zones and pay counts and
lithologic and paleo correlation markers at least every 500-feet,
(ii) The 1-inch type log shows missing sections from other logs
where faulting occurs,
(iii) The 5-inch electric log shows pay zones and pay counts and
labeled points used in establishing resistivity of the formation, 100
percent water saturated (Ro) and the resistivity of the
undisturbed formation (Rt), and
(iv) The 5-inch porosity logs show pay zones and pay counts and
labeled points used in establishing reservoir porosity or labeled points
showing values used in calculating reservoir porosity such as bulk
density or transit time;
(2) Digital copies of all well logs spudded before December 1, 1995;
(3) Core data, if available;
(4) Well correlation sections;
(5) Pressure data;
(6) Production test results;
(7) Pressure-volume-temperature analysis, if available; and
(8) A table listing the wells and completions, and indicating which
sands and fault blocks will be targeted for completion or recompletion.
(c) Map interpretations which includes for each reservoir in the
field:
(1) Structure maps consisting of top and base of sand maps showing
well and seismic shot point locations;
(2) Isopach maps for net sand, net oil, net gas, all with well
locations;
[[Page 41]]
(3) Maps indicating well surface and bottom hole locations, location
of development facilities, and shot points; and
(4) An explanation for excluding the reservoirs you are not planning
to develop.
(d) Reservoir-specific data which includes:
(1) Probability of reservoir occurrence with hydrocarbons;
(2) Probability the hydrocarbon in the reservoir is all oil and the
probability it is all gas;
(3) Distributions or point estimates (accompanied by explanations of
why distributions less appropriately reflect the uncertainty) for the
parameters used to estimate reservoir size, i.e., acres and net
thickness;
(4) Most likely values for porosity, salt water saturation, volume
factor for oil formation, and volume factor for gas formation;
(5) Distributions or point estimates (accompanied by explanations of
why distributions less appropriately reflect the uncertainty) for
recovery efficiency (in percent) and oil or gas recovery (in stock-tank-
barrels per acre-foot or in thousands of cubic feet per acre foot);
(6) A gas/oil ratio distribution or point estimate (accompanied by
explanations of why distributions less appropriately reflect the
uncertainty) for each reservoir;
(7) A yield distribution or point estimate (accompanied by
explanations of why distributions less appropriately reflect the
uncertainty) for each gas reservoir; and
(8) Reserve or resource distribution by reservoir.
(e) Aggregated reserve and resource data which includes:
(1) The aggregated distributions for reserves and resources (in BOE)
and oil fraction for your field computed by the resource module of our
RSVP model;
(2) A description of anticipated hydrocarbon quality (i.e., specific
gravity); and
(3) The ranges within the aggregated distribution for reserves and
resources that define the development and production scenarios presented
in the engineering and production reports. Typically there will be three
ranges specified by two positive reserve and resource points on the
aggregated distribution. The range at the low end of the distribution
will be associated with the conservative development and production
scenario; the middle range will be related to the most likely
development and production scenario; and, the high end range will be
consistent with the optimistic development and production scenario.
Sec. 203.87 What is in an engineering report?
This report defines the development plan and capital requirements
for the economic evaluation and must contain the following elements.
(a) A description of the development concept (e.g., tension leg
platform, fixed platform, floater type, subsea tieback, etc.) which
includes:
(1) Its size along with basic design specifications and drawings;
and
(2) The construction schedule.
(b) An identification of planned wells which includes:
(1) The number;
(2) The type (platform, subsea, vertical, deviated, horizontal);
(3) The well depth;
(4) The drilling schedule;
(5) The kind of completion (single, dual, horizontal, etc.); and
(6) The completion schedule.
(c) A description of the production system equipment which includes:
(1) The production capacity for oil and gas and a description of
limiting component(s);
(2) Any unusual problems (low gravity, paraffin, etc.);
(3) All subsea structures;
(4) All flowlines; and
(5) Schedule for installing the production system.
(d) A discussion of any plans for multi-phase development which
includes the conceptual basis for developing in phases and goals or
milestones required for starting later phases.
(e) A set of development scenarios consisting of activity timing and
scale associated with each of up to three production profiles
(conservative, most likely, optimistic) provided in the production
report for your field (Sec. 203.88). Each development scenario and
production profile must denote the likely
[[Page 42]]
events should the field size turn out to be within a range represented
by one of the three segments of the field size distribution. If you send
in fewer than three scenarios, you must explain why fewer scenarios are
more efficient across the whole field size distribution.
Sec. 203.88 What is in a production report?
This report supports your development and production timing and
product quality expectations and must contain the following elements.
(a) Production profiles by well completion and field that specify
the actual and projected production by year for each of the following
products: oil, condensate, gas, and associated gas. The production from
each profile must be consistent with a specific level of reserves and
resources on the aggregated distribution of field size.
(b) Production drive mechanisms for each reservoir.
Sec. 203.89 What is in a cost report?
This report lists all actual and projected costs for your field,
must explain and document the source of each cost estimate, and must
identify the following elements.
(a) Sunk costs. Report sunk costs in dollars not adjusted for
inflation and only if you have documentation.
(b) Appraisal, delineation and development costs. Base them on
actual spending, current authorization for expenditure, engineering
estimates, or analogous projects. These costs cover:
(1) Platform well drilling and average depth;
(2) Platform well completion;
(3) Subsea well drilling and average depth;
(4) Subsea well completion;
(5) Production system (platform); and
(6) Flowline fabrication and installation.
(c) Production costs based on historical costs, engineering
estimates, or analogous projects. These costs cover:
(1) Operation;
(2) Equipment; and
(3) Existing royalty overrides (we will not use the royalty
overrides in evaluations).
(d) Transportation costs, based on historical costs, engineering
estimates, or analogous projects. These costs cover:
(1) Oil or gas tariffs from pipeline or tankerage;
(2) Trunkline and tieback lines; and
(3) Gas plant processing for natural gas liquids.
(e) Abandonment costs, based on historical costs, engineering
estimates, or analogous projects. You should provide the costs to plug
and abandon only wells and to remove only production systems for which
you have not incurred costs as of the time of application submission.
You should also include a point estimate or distribution of prospective
salvage value for all potentially reusable facilities and materials,
along with the source and an explanation of the figures provided.
(f) A set of cost estimates consistent with each one of up to three
field-development scenarios and production profiles (conservative, most
likely, optimistic). You should express costs in constant real dollar
terms for the base year. You may also express the uncertainty of each
cost estimate with a minimum and maximum percentage of the base value.
(g) A spending schedule. You should provide costs for each year (in
real dollars) for each category in paragraphs (a) through (f) of this
section.
(h) A summary of other costs which are ineligible for evaluating
your need for relief. These costs cover:
(1) Expenses before first discovery on the field;
(2) Cash bonuses;
(3) Fees for royalty relief applications;
(4) Lease rentals, royalties, and payments of net profit share and
net revenue share;
(5) Legal expenses;
(6) Damages and losses;
(7) Taxes;
(8) Interest or finance charges, including those embedded in
equipment leases;
(9) Fines or penalties; and
(10) Money spent on previously existing obligations (e.g., royalty
overrides or other forms of payment for acquiring a financial position
in a lease, expenditures for plugging wells and removing and abandoning
facilities that
[[Page 43]]
existed on the application submission date).
Sec. 203.90 What is in a fabricator's confirmation report?
This report shows you have committed in a timely way to the approved
system for production. This report must include the following (or its
equivalent for unconventionally acquired systems):
(a) A copy of the contract(s) under which the fabrication yard is
building the approved system for you;
(b) A letter from the contractor building the system to the BSEE
Regional Director for your region certifying when construction started
on your system; and
(c) Evidence of an appropriate down payment or equal action that
you've started acquiring the approved system.
Sec. 203.91 What is in a post-production development report?
For each cost category in the deep water cost report, you must
compare actual costs up to the date when production starts to your
planned pre-production costs. If your application included more than one
development scenario, you need to compare actual costs with those in
your scenario of most likely development. Also, you must have this
report certified by an independent CPA according to Sec. 203.81(c).
Subpart C--Federal and Indian Oil [Reserved]
Subpart D--Federal and Indian Gas [Reserved]
Subpart E--Solid Minerals, General [Reserved]
Subpart F [Reserved]
Subpart G--Other Solid Minerals [Reserved]
Subpart H--Geothermal Resources [Reserved]
Subpart I--OCS Sulfur [Reserved]
PART 219 [RESERVED]
[[Page 44]]
SUBCHAPTER B_OFFSHORE
PART 250_OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER CONTINENTAL SHELF--
Table of Contents
Subpart A_General
Authority and Definition of Terms
Sec.
250.101 Authority and applicability.
250.102 What does this part do?
250.103 Where can I find more information about the requirements in this
part?
250.104 How may I appeal a decision made under BSEE regulations?
250.105 Definitions.
Performance Standards
250.106 What standards will the Director use to regulate lease
operations?
250.107 What must I do to protect health, safety, property, and the
environment?
250.108 What requirements must I follow for cranes and other material-
handling equipment?
250.109 What documents must I prepare and maintain related to welding?
250.110 What must I include in my welding plan?
250.111 Who oversees operations under my welding plan?
250.112 What standards must my welding equipment meet?
250.113 What procedures must I follow when welding?
250.114 How must I install, maintain, and operate electrical equipment?
250.115-250.117 [Reserved]
Gas Storage or Injection
250.118 Will BSEE approve gas injection?
250.119 [Reserved]
250.120 How does injecting, storing, or treating gas affect my royalty
payments?
250.121 What happens when the reservoir contains both original gas in
place and injected gas?
250.122 What effect does subsurface storage have on the lease term?
250.123 [Reserved]
250.124 Will BSEE approve gas injection into the cap rock containing a
sulphur deposit?
Fees
250.125 Service fees.
250.126 Electronic payment instructions.
Inspection of Operations
250.130 Why does BSEE conduct inspections?
250.131 Will BSEE notify me before conducting an inspection?
250.132 What must I do when BSEE conducts an inspection?
250.133 Will BSEE reimburse me for my expenses related to inspections?
Disqualification
250.135 What will BSEE do if my operating performance is unacceptable?
250.136 How will BSEE determine if my operating performance is
unacceptable?
Special Types of Approvals
250.140 When will I receive an oral approval?
250.141 May I ever use alternate procedures or equipment?
250.142 How do I receive approval for departures?
250.143-250.144 [Reserved]
250.145 How do I designate an agent or a local agent?
250.146 Who is responsible for fulfilling leasehold obligations?
Naming and Identifying Facilities and Wells (Does Not Include MODUs)
250.150 How do I name facilities and wells in the Gulf of Mexico Region?
250.151 How do I name facilities in the Pacific Region?
250.152 How do I name facilities in the Alaska Region?
250.153 Do I have to rename an existing facility or well?
250.154 What identification signs must I display?
250.160-250.167 [Reserved]
Suspensions
250.168 May operations or production be suspended?
250.169 What effect does suspension have on my lease?
250.170 How long does a suspension last?
250.171 How do I request a suspension?
250.172 When may the Regional Supervisor grant or direct an SOO or SOP?
250.173 When may the Regional Supervisor direct an SOO or SOP?
250.174 When may the Regional Supervisor grant or direct an SOP?
250.175 When may the Regional Supervisor grant an SOO?
250.176 Does a suspension affect my royalty payment?
250.177 What additional requirements may the Regional Supervisor order
for a suspension?
[[Page 45]]
Primary Lease Requirements, Lease Term Extensions, and Lease
Cancellations
250.180 What am I required to do to keep my lease term in effect?
250.181-250.185 [Reserved]
Information and Reporting Requirements
250.186 What reporting information and report forms must I submit?
250.187 What are BSEE's incident reporting requirements?
250.188 What incidents must I report to BSEE and when must I report
them?
250.189 Reporting requirements for incidents requiring immediate
notification.
250.190 Reporting requirements for incidents requiring written
notification.
250.191 How does BSEE conduct incident investigations?
250.192 What reports and statistics must I submit relating to a
hurricane, earthquake, or other natural occurrence?
250.193 Reports and investigations of possible violations.
250.194 How must I protect archaeological resources?
250.195 What notification does BSEE require on the production status of
wells?
250.196 Reimbursements for reproduction and processing costs.
250.197 Data and information to be made available to the public or for
limited inspection.
References
250.198 Documents incorporated by reference.
250.199 Paperwork Reduction Act statements--information collection.
Subpart B_Plans and Information
General Information
250.200 Definitions.
250.201 What plans and information must I submit before I conduct any
activities on my lease or unit?
250.202-250.203 [Reserved]
250.204 How must I protect the rights of the Federal government?
250.205 Are there special requirements if my well affects an adjacent
property?
Post-Approval Requirements for the EP, DPP, and DOCD
250.282 Do I have to conduct post-approval monitoring?
Deepwater Operations Plans (DWOP)
250.286 What is a DWOP?
250.287 For what development projects must I submit a DWOP?
250.288 When and how must I submit the Conceptual Plan?
250.289 What must the Conceptual Plan contain?
250.290 What operations require approval of the Conceptual Plan?
250.291 When and how must I submit the DWOP?
250.292 What must the DWOP contain?
250.293 What operations require approval of the DWOP?
250.294 May I combine the Conceptual Plan and the DWOP?
250.295 When must I revise my DWOP?
Subpart C_Pollution Prevention and Control
250.300 Pollution prevention.
250.301 Inspection of facilities.
Subpart D_Oil and Gas Drilling Operations
General Requirements
250.400 General requirements.
250.401-250.403 [Reserved]
250.404 What are the requirements for the crown block?
250.405 What are the safety requirements for diesel engines used on a
drilling rig?
250.406 [Reserved]
250.407 What tests must I conduct to determine reservoir
characteristics?
250.408 May I use alternative procedures or equipment during drilling
operations?
250.409 May I obtain departures from these drilling requirements?
Applying for a Permit to Drill
250.410 How do I obtain approval to drill a well?
250.411 What information must I submit with my application?
250.412 What requirements must the location plat meet?
250.413 What must my description of well drilling design criteria
address?
250.414 What must my drilling prognosis include?
250.415 What must my casing and cementing programs include?
250.416 What must I include in the diverter description?
250.417 [Reserved]
250.418 What additional information must I submit with my APD?
Casing and Cementing Requirements
250.420 What well casing and cementing requirements must I meet?
250.421 What are the casing and cementing requirements by type of casing
string?
250.422 When may I resume drilling after cementing?
250.423 What are the requirements for casing and liner installation?
250.424-250.426 [Reserved]
[[Page 46]]
250.427 What are the requirements for pressure integrity tests?
250.428 What must I do in certain cementing and casing situations?
Diverter System Requirements
250.430 When must I install a diverter system?
250.431 What are the diverter design and installation requirements?
250.432 How do I obtain a departure to diverter design and installation
requirements?
250.433 What are the diverter actuation and testing requirements?
250.434 What are the recordkeeping requirements for diverter actuations
and tests?
250.440-250.451 [Reserved]
Drilling Fluid Requirements
250.452 What are the real-time monitoring requirements for Arctic OCS
exploratory drilling operations?
250.455 What are the general requirements for a drilling fluid program?
250.456 What safe practices must the drilling fluid program follow?
250.457 What equipment is required to monitor drilling fluids?
250.458 What quantities of drilling fluids are required?
250.459 What are the safety requirements for drilling fluid-handling
areas?
Other Drilling Requirements
250.460 What are the requirements for conducting a well test?
250.461 What are the requirements for directional and inclination
surveys?
250.462 What are the requirements for well-control drills?
250.463 Who establishes field drilling rules?
Applying for a Permit To Modify and Well Records
250.465 When must I submit an Application for Permit to Modify (APM) or
an End of Operations Report to BSEE?
250.466-250.469 [Reserved]
Additional Arctic OCS Requirements
250.470 What additional information must I submit with my APD for Arctic
OCS exploratory drilling operations?
250.471 What are the requirements for Arctic OCS source control and
containment?
250.472 What are the relief rig requirements for the Arctic OCS?
250.473 What must I do to protect health, safety, property, and the
environment while operating on the Arctic OCS?
Hydrogen Sulfide
250.490 Hydrogen sulfide.
Subpart E_Oil and Gas Well-Completion Operations
250.500 General requirements.
250.501 Definition.
250.502 [Reserved]
250.503 Emergency shutdown system.
250.504 Hydrogen sulfide.
250.505 Subsea completions.
250.506-250.508 [Reserved]
250.509 Well-completion structures on fixed platforms.
250.510 Diesel engine air intakes.
250.511 Traveling-block safety device.
250.512 Field well-completion rules.
250.513 Approval and reporting of well-completion operations.
250.514 Well-control fluids, equipment, and operations.
250.515-250.517 [Reserved]
250.518 Tubing and wellhead equipment.
Casing Pressure Management
250.519 What are the requirements for casing pressure management?
250.520 How often do I have to monitor for casing pressure?
250.521 When do I have to perform a casing diagnostic test?
250.522 How do I manage the thermal effects caused by initial production
on a newly completed or recompleted well?
250.523 When do I have to repeat casing diagnostic testing?
250.524 How long do I keep records of casing pressure and diagnostic
tests?
250.525 When am I required to take action from my casing diagnostic
test?
250.526 What do I submit if my casing diagnostic test requires action?
250.527 What must I include in my notification of corrective action?
250.528 What must I include in my casing pressure request?
250.529 What are the terms of my casing pressure request?
250.530 What if my casing pressure request is denied?
250.531 When does my casing pressure request approval become invalid?
Subpart F_Oil and Gas Well-Workover Operations
250.600 General requirements.
250.601 Definitions.
250.602 [Reserved]
250.603 Emergency shutdown system.
250.604 Hydrogen sulfide.
250.605 Subsea workovers.
250.606-250.608 [Reserved]
250.609 Well-workover structures on fixed platforms.
250.610 Diesel engine air intakes.
250.611 Traveling-block safety device.
250.612 Field well-workover rules.
[[Page 47]]
250.613 Approval and reporting for well-workover operations.
250.614 Well-control fluids, equipment, and operations.
250.615 [Reserved]
250.616 Coiled tubing and snubbing operations.
250.617-250.618 [Reserved]
250.619 Tubing and wellhead equipment.
250.620 Wireline operations.
Subpart G--Well Operations and Equipment
General Requirements
250.700 What operations and equipment does this subpart cover?
250.701 May I use alternate procedures or equipment during operations?
250.702 May I obtain departures from these requirements?
250.703 What must I do to keep wells under control?
Rig Requirements
250.710 What instructions must be given to personnel engaged in well
operations?
250.711 What are the requirements for well-control drills?
250.712 What rig unit movements must I report?
250.713 What must I provide if I plan to use a mobile offshore drilling
unit (MODU) for well operations?
250.714 Do I have to develop a dropped objects plan?
250.715 Do I need a global positioning system (GPS) for all MODUs?
Well Operations
250.720 When and how must I secure a well?
250.721 What are the requirements for pressure testing casing and
liners?
250.722 What are the requirements for prolonged operations in a well?
250.723 What additional safety measures must I take when I conduct
operations on a platform that has producing wells or has other
hydrocarbon flow?
250.724 What are the real-time monitoring requirements?
Blowout Preventer (BOP) System Requirements
250.730 What are the general requirements for BOP systems and system
components?
250.731 What information must I submit for BOP systems and system
components?
250.732 What are the BSEE-approved verification organization (BAVO)
requirements for BOP systems and system components?
250.733 What are the requirements for a surface BOP stack?
250.734 What are the requirements for a subsea BOP system?
250.735 What associated systems and related equipment must all BOP
systems include?
250.736 What are the requirements for choke manifolds, kelly-type valves
inside BOPs, and drill string safety valves?
250.737 What are the BOP system testing requirements?
250.738 What must I do in certain situations involving BOP equipment or
systems?
250.739 What are the BOP maintenance and inspection requirements?
Records and Reporting
250.740 What records must I keep?
250.741 How long must I keep records?
250.742 What well records am I required to submit?
250.743 What are the well activity reporting requirements?
250.744 What are the end of operation reporting requirements?
250.745 What other well records could I be required to submit?
250.746 What are the recordkeeping requirements for casing, liner, and
BOP tests, and inspections of BOP systems and marine risers?
Subpart H_Oil and Gas Production Safety Systems
General Requirements
Sec.
250.800 General.
250.801 Safety and pollution prevention equipment (SPPE) certification.
250.802 Requirements for SPPE.
250.803 What SPPE failure reporting procedures must I follow?
250.804 Additional requirements for subsurface safety valves (SSSVs) and
related equipment installed in high pressure high temperature
(HPHT) environments.
250.805 Hydrogen sulfide.
250.806-250.809 [Reserved]
Surface and Subsurface Safety Systems--Dry Trees
250.810 Dry tree subsurface safety devices--general.
250.811 Specifications for SSSVs--dry trees.
250.812 Surface-controlled SSSVs--dry trees.
250.813 Subsurface-controlled SSSVs.
250.814 Design, installation, and operation of SSSVs--dry trees.
250.815 Subsurface safety devices in shut-in wells--dry trees.
250.816 Subsurface safety devices in injection wells--dry trees.
250.817 Temporary removal of subsurface safety devices for routine
operations.
[[Page 48]]
250.818 Additional safety equipment--dry trees.
250.819 Specification for surface safety valves (SSVs).
250.820 Use of SSVs.
250.821 Emergency action and safety system shutdown--dry trees.
250.822-250.824 [Reserved]
Subsea and Subsurface Safety Systems--Subsea Trees
250.825 Subsea tree subsurface safety devices--general.
250.826 Specifications for SSSVs--subsea trees.
250.827 Surface-controlled SSSVs--subsea trees.
250.828 Design, installation, and operation of SSSVs--subsea trees.
250.829 Subsurface safety devices in shut-in wells--subsea trees.
250.830 Subsurface safety devices in injection wells--subsea trees.
250.831 Alteration or disconnection of subsea pipeline or umbilical.
250.832 Additional safety equipment--subsea trees.
250.833 Specification for underwater safety valves (USVs).
250.834 Use of USVs.
250.835 Specification for all boarding shutdown valves (BSDVs)
associated with subsea systems.
250.836 Use of BSDVs.
250.837 Emergency action and safety system shutdown--subsea trees.
250.838 What are the maximum allowable valve closure times and hydraulic
bleeding requirements for an electro-hydraulic control system?
250.839 What are the maximum allowable valve closure times and hydraulic
bleeding requirements for a direct-hydraulic control system?
Production Safety Systems
250.840 Design, installation, and maintenance--general.
250.841 Platforms.
250.842 Approval of safety systems design and installation features.
250.843-250.849 [Reserved]
Additional Production System Requirements
250.850 Production system requirements--general.
250.851 Pressure vessels (including heat exchangers) and fired vessels.
250.852 Flowlines/Headers.
250.853 Safety sensors.
250.854 Floating production units equipped with turrets and turret-
mounted systems.
250.855 Emergency shutdown (ESD) system.
250.856 Engines.
250.857 Glycol dehydration units.
250.858 Gas compressors.
250.859 Firefighting systems.
250.860 Chemical firefighting system.
250.861 Foam firefighting systems.
250.862 Fire and gas-detection systems.
250.863 Electrical equipment.
250.864 Erosion.
250.865 Surface pumps.
250.866 Personnel safety equipment.
250.867 Temporary quarters and temporary equipment.
250.868 Non-metallic piping.
250.869 General platform operations.
250.870 Time delays on pressure safety low (PSL) sensors.
250.871 Welding and burning practices and procedures.
250.872 Atmospheric vessels.
250.873 Subsea gas lift requirements.
250.874 Subsea water injection systems.
250.875 Subsea pump systems.
250.876 Fired and exhaust heated components.
250.877-250.879 [Reserved]
Safety Device Testing
250.880 Production safety system testing.
250.881-250.889 [Reserved]
Records and Training
250.890 Records.
250.891 Safety device training.
250.892-250.899 [Reserved]
Subpart I_Platforms and Structures
General Requirements for Platforms
250.900 What general requirements apply to all platforms?
250.901 What industry standards must your platform meet?
250.902 What are the requirements for platform removal and location
clearance?
250.903 What records must I keep?
Platform Approval Program
250.904 What is the Platform Approval Program?
250.905 How do I get approval for the installation, modification, or
repair of my platform?
250.906 What must I do to obtain approval for the proposed site of my
platform?
250.907 Where must I locate foundation boreholes?
250.908 What are the minimum structural fatigue design requirements?
Platform Verification Program
250.909 What is the Platform Verification Program?
250.910 Which of my facilities are subject to the Platform Verification
Program?
[[Page 49]]
250.911 If my platform is subject to the Platform Verification Program,
what must I do?
250.912 What plans must I submit under the Platform Verification
Program?
250.913 When must I resubmit Platform Verification Program plans?
250.914 How do I nominate a CVA?
250.915 What are the CVA's primary responsibilities?
250.916 What are the CVA's primary duties during the design phase?
250.917 What are the CVA's primary duties during the fabrication phase?
250.918 What are the CVA's primary duties during the installation phase?
Inspection, Maintenance, and Assessment of Platforms
250.919 What in-service inspection requirements must I meet?
250.920 What are the BSEE requirements for assessment of fixed
platforms?
250.921 How do I analyze my platform for cumulative fatigue?
Subpart J_Pipelines and Pipeline Rights-of-Way
250.1000 General requirements.
250.1001 Definitions.
250.1002 Design requirements for DOI pipelines.
250.1003 Installation, testing, and repair requirements for DOI
pipelines.
250.1004 Safety equipment requirements for DOI pipelines.
250.1005 Inspection requirements for DOI pipelines.
250.1006 How must I decommission and take out of service a DOI pipeline?
250.1007 What to include in applications.
250.1008 Reports.
250.1009 Requirements to obtain pipeline right-of-way grants.
250.1010 General requirements for pipeline right-of-way holders.
250.1011 [Reserved]
250.1012 Required payments for pipeline right-of-way holders.
250.1013 Grounds for forfeiture of pipeline right-of-way grants.
250.1014 When pipeline right-of-way grants expire.
250.1015 Applications for pipeline right-of-way grants.
250.1016 Granting pipeline rights-of-way.
250.1017 Requirements for construction under pipeline right-of-way
grants.
250.1018 Assignment of pipeline right-of-way grants.
250.1019 Relinquishment of pipeline right-of-way grants.
Subpart K_Oil and Gas Production Requirements
General
250.1150 What are the general reservoir production requirements?
Well Tests and Surveys
250.1151 How often must I conduct well production tests?
250.1152 How do I conduct well tests?
250.1153 [Reserved]
Classifying Reservoirs
250.1154-250.1155 [Reserved]
Approvals Prior to Production
250.1156 What steps must I take to receive approval to produce within
500 feet of a unit or lease line?
250.1157 How do I receive approval to produce gas-cap gas from an oil
reservoir with an associated gas cap?
250.1158 How do I receive approval to downhole commingle hydrocarbons?
Production Rates
250.1159 May the Regional Supervisor limit my well or reservoir
production rates?
laring, Venting, and Burning Hydrocarbons
250.1160 When may I flare or vent gas?
250.1161 When may I flare or vent gas for extended periods of time?
250.1162 When may I burn produced liquid hydrocarbons?
250.1163 How must I measure gas flaring or venting volumes and liquid
hydrocarbon burning volumes, and what records must I maintain?
250.1164 What are the requirements for flaring or venting gas containing
H2S?
Other Requirements
250.1165 What must I do for enhanced recovery operations?
250.1166 What additional reporting is required for developments in the
Alaska OCS Region?
250.1167 What information must I submit with forms and for approvals?
Subpart L_Oil and Gas Production Measurement, Surface Commingling, and
Security
250.1200 Question index table.
250.1201 Definitions.
250.1202 Liquid hydrocarbon measurement.
250.1203 Gas measurement.
250.1204 Surface commingling.
250.1205 Site security.
[[Page 50]]
Subpart M_Unitization
250.1300 What is the purpose of this subpart?
250.1301 What are the requirements for unitization?
250.1302 What if I have a competitive reservoir on a lease?
250.1303 How do I apply for voluntary unitization?
250.1304 How will BSEE require unitization?
Subpart N_Outer Continental Shelf Civil Penalties
Outer Continental Shelf Lands Act Civil Penalties
250.1400 How does BSEE begin the civil penalty process?
250.1401 [Reserved]
250.1402 Definitions.
250.1403 What is the maximum civil penalty?
250.1404 Which violations will BSEE review for potential civil
penalties?
250.1405 When is a case file developed?
250.1406 When will BSEE notify me and provide penalty information?
250.1407 How do I respond to the letter of notification?
250.1408 When will I be notified of the Reviewing Officer's decision?
250.1409 What are my appeal rights?
Federal Oil and Gas Royalty Management Act Civil Penalties Definitions
250.1450 What definitions apply to this subpart?
Penalties After a Period To Correct
250.1451 What may BSEE do if I violate a statute, regulation, order, or
lease term relating to a Federal oil and gas lease?
250.1452 What if I correct the violation?
250.1453 What if I do not correct the violation?
250.1454 How may I request a hearing on the record on a Notice of
Noncompliance?
250.1455 Does my request for a hearing on the record affect the
penalties?
250.1456 May I request a hearing on the record regarding the amount of a
civil penalty if I did not request a hearing on the Notice of
Noncompliance?
Penalties Without a Period To Correct
250.1460 May I be subject to penalties without prior notice and an
opportunity to correct?
250.1461 How will BSEE inform me of violations without a period to
correct?
250.1462 How may I request a hearing on the record on a Notice of
Noncompliance regarding violations without a period to
correct?
250.1463 Does my request for a hearing on the record affect the
penalties?
250.1464 May I request a hearing on the record regarding the amount of a
civil penalty if I did not request a hearing on the Notice of
Noncompliance?
General Provisions
250.1470 How does BSEE decide what the amount of the penalty should be?
250.1471 Does the penalty affect whether I owe interest?
250.1472 How will the Office of Hearings and Appeals conduct the hearing
on the record?
250.1473 How may I appeal the Administrative Law Judge's decision?
250.1474 May I seek judicial review of the decision of the Interior
Board of Land Appeals?
250.1475 When must I pay the penalty?
250.1476 Can BSEE reduce my penalty once it is assessed?
250.1477 How may BSEE collect the penalty?
Criminal Penalties
250.1480 May the United States criminally prosecute me for violations
under Federal oil and gas leases?
Subpart O_Well Control and Production Safety Training
250.1500 Definitions.
250.1501 What is the goal of my training program?
250.1503 What are my general responsibilities for training?
250.1504 May I use alternative training methods?
250.1505 Where may I get training for my employees?
250.1506 How often must I train my employees?
250.1507 How will BSEE measure training results?
250.1508 What must I do when BSEE administers written or oral tests?
250.1509 What must I do when BSEE administers or requires hands-on,
simulator, or other types of testing?
250.1510 What will BSEE do if my training program does not comply with
this subpart?
Subpart P_Sulphur Operations
250.1600 Performance standard.
250.1601 Definitions.
250.1602 Applicability.
250.1603 Determination of sulphur deposit.
250.1604 General requirements.
250.1605 Drilling requirements.
250.1606 Control of wells.
250.1607 Field rules.
250.1608 Well casing and cementing.
250.1609 Pressure testing of casing.
250.1610 Blowout preventer systems and system components.
[[Page 51]]
250.1611 Blowout preventer systems tests, actuations, inspections, and
maintenance.
250.1612 Well-control drills.
250.1613 Diverter systems.
250.1614 Mud program.
250.1615 Securing of wells.
250.1616 Supervision, surveillance, and training.
250.1617 Application for permit to drill.
250.1618 Application for permit to modify.
250.1619 Well records.
250.1620 Well-completion and well-workover requirements.
250.1621 Crew instructions.
250.1622 Approvals and reporting of well-completion and well-workover
operations.
250.1623 Well-control fluids, equipment, and operations.
250.1624 Blowout prevention equipment.
250.1625 Blowout preventer system testing, records, and drills.
250.1626 Tubing and wellhead equipment.
250.1627 Production requirements.
250.1628 Design, installation, and operation of production systems.
250.1629 Additional production and fuel gas system requirements.
250.1630 Safety-system testing and records.
250.1631 Safety device training.
250.1632 Production rates.
250.1633 Production measurement.
250.1634 Site security.
Subpart Q_Decommissioning Activities
General
250.1700 What do the terms ``decommissioning'', ``obstructions'', and
``facility'' mean?
250.1701 Who must meet the decommissioning obligations in this subpart?
250.1702 When do I accrue decommissioning obligations?
250.1703 What are the general requirements for decommissioning?
250.1704 What decommissioning applications and reports must I submit and
when must I submit them?
250.1705 [Reserved]
250.1706 Coiled tubing and snubbing operations.
250.1707-250.1709 [Reserved]
Permanently Plugging Wells
250.1710 When must I permanently plug all wells on a lease?
250.1711 When will BSEE order me to permanently plug a well?
250.1712 What information must I submit before I permanently plug a well
or zone?
250.1713 Must I notify BSEE before I begin well plugging operations?
250.1714 What must I accomplish with well plugs?
250.1715 How must I permanently plug a well?
250.1716 To what depth must I remove wellheads and casings?
250.1717 [Reserved]
Temporary Abandoned Wells
250.1721 If I temporarily abandon a well that I plan to re-enter, what
must I do?
250.1722 If I install a subsea protective device, what requirements must
I meet?
250.1723 What must I do when it is no longer necessary to maintain a
well in temporary abandoned status?
Removing Platforms and Other Facilities
250.1725 When do I have to remove platforms and other facilities?
250.1726 When must I submit an initial platform removal application and
what must it include?
250.1727 What information must I include in my final application to
remove a platform or other facility?
250.1728 To what depth must I remove a platform or other facility?
250.1729 After I remove a platform or other facility, what information
must I submit?
250.1730 When might BSEE approve partial structure removal or toppling
in place?
250.1731 Who is responsible for decommissioning an OCS facility subject
to an Alternate Use RUE?
Site Clearance for Wells, Platforms, and Other Facilities
250.1740 How must I verify that the site of a permanently plugged well,
removed platform, or other removed facility is clear of
obstructions?
250.1741 If I drag a trawl across a site, what requirements must I meet?
250.1742 What other methods can I use to verify that a site is clear?
250.1743 How do I certify that a site is clear of obstructions?
Pipeline Decommissioning
250.1750 When may I decommission a pipeline in place?
250.1751 How do I decommission a pipeline in place?
250.1752 How do I remove a pipeline?
250.1753 After I decommission a pipeline, what information must I
submit?
250.1754 When must I remove a pipeline decommissioned in place?
Subpart R [Reserved]
Subpart S_Safety and Environmental Management Systems (SEMS)
250.1900 Must I have a SEMS program?
[[Page 52]]
250.1901 What is the goal of my SEMS program?
250.1902 What must I include in my SEMS program?
250.1903 Acronyms and definitions.
250.1904 Special instructions.
250.1905-250.1908 [Reserved]
250.1909 What are management's general responsibilities for the SEMS
program?
250.1910 What safety and environmental information is required?
250.1911 What hazards analysis criteria must my SEMS program meet?
250.1912 What criteria for management of change must my SEMS program
meet?
250.1913 What criteria for operating procedures must my SEMS program
meet?
250.1914 What criteria must be documented in my SEMS program for safe
work practices and contractor selection?
250.1915 What training criteria must be in my SEMS program?
250.1916 What criteria for mechanical integrity must my SEMS program
meet?
250.1917 What criteria for pre-startup review must be in my SEMS
program?
250.1918 What criteria for emergency response and control must be in my
SEMS program?
250.1919 What criteria for investigation of incidents must be in my SEMS
program?
250.1920 What are the auditing requirements for my SEMS program?
250.1921 What qualifications must the ASP meet?
250.1922 What qualifications must an AB meet?
250.1923 [Reserved]
250.1924 How will BSEE determine if my SEMS program is effective?
250.1925 May BSEE direct me to conduct additional audits?
250.1926 [Reserved]
250.1927 What happens if BSEE finds shortcomings in my SEMS program?
250.1928 What are my recordkeeping and documentation requirements?
250.1929 What are my responsibilities for submitting OCS performance
measure data?
250.1930 What must be included in my SEMS program for SWA?
250.1931 What must be included in my SEMS program for UWA?
250.1932 What are my EPP requirements?
250.1933 What procedures must be included for reporting unsafe working
conditions?
Authority: 30 U.S.C. 1751, 31 U.S.C. 9701, 33 U.S.C. 1321(j)(1)(C),
43 U.S.C. 1334.
Source: 76 FR 64462, Oct. 18, 2011, unless otherwise noted.
Editorial Note: Nomenclature changes to part 250 appear at 77 FR
50891, Aug. 22, 2012.
Subpart A_General
Authority and Definition of Terms
Sec. 250.101 Authority and applicability.
The Secretary of the Interior (Secretary) authorized the Bureau of
Safety and Environmental Enforcement (BSEE) to regulate oil, gas, and
sulphur exploration, development, and production operations on the Outer
Continental Shelf (OCS). Under the Secretary's authority, the Director
requires that all operations:
(a) Be conducted according to the OCS Lands Act (OCSLA), the
regulations in this part, BSEE orders, the lease or right-of-way, and
other applicable laws, regulations, and amendments; and
(b) Conform to sound conservation practice to preserve, protect, and
develop mineral resources of the OCS to:
(1) Make resources available to meet the Nation's energy needs;
(2) Balance orderly energy resource development with protection of
the human, marine, and coastal environments;
(3) Ensure the public receives a fair and equitable return on the
resources of the OCS;
(4) Preserve and maintain free enterprise competition; and
(5) Minimize or eliminate conflicts between the exploration,
development, and production of oil and natural gas and the recovery of
other resources.
Sec. 250.102 What does this part do?
(a) This part 250 contains the regulations of the BSEE Offshore
program that govern oil, gas, and sulphur exploration, development, and
production operations on the OCS. When you conduct operations on the
OCS, you must submit requests, applications, and notices, or provide
supplemental information for BSEE approval.
(b) The following table of general references shows where to look
for information about these processes.
------------------------------------------------------------------------
For information about . . . Refer to . . .
------------------------------------------------------------------------
(1) Applications for permit to drill,.. 30 CFR part 250, subpart D.
(2) Development and Production Plans 30 CFR part 550, subpart B.
(DPP),.
[[Page 53]]
(3) Downhole commingling,.............. 30 CFR part 250, subpart K.
(4) Exploration Plans (EP),............ 30 CFR part 550, subpart B.
(5) Flaring,........................... 30 CFR part 250, subpart K.
(6) Gas measurement,................... 30 CFR part 250, subpart L.
(7) Off-lease geological and 30 CFR part 551.
geophysical permits,.
(8) Oil spill financial responsibility 30 CFR part 553.
coverage,.
(9) Oil and gas production safety 30 CFR part 250, subpart H.
systems,.
(10) Oil spill response plans,......... 30 CFR part 254.
(11) Oil and gas well-completion 30 CFR part 250, subpart E.
operations,.
(12) Oil and gas well-workover 30 CFR part 250, subpart F.
operations,.
(13) Decommissioning Activities,....... 30 CFR part 250, subpart Q.
(14) Platforms and structures,......... 30 CFR part 250, subpart I.
(15) Pipelines and Pipeline Rights-of- 30 CFR part 250, subpart J and
Way,. 30 CFR part 550, subpart J.
(16) Sulphur operations,............... 30 CFR part 250, subpart P.
(17) Training,......................... 30 CFR part 250, subpart O.
(18) Unitization,...................... 30 CFR part 250, subpart M.
(19) Safety and Environmental 30 CFR part 250, subpart S.
Management Systems (SEMS),.
------------------------------------------------------------------------
[76 FR 64462, Oct. 18, 2011, as amended at 36148, June 6, 2016]
Sec. 250.103 Where can I find more information about the requirements
in this part?
BSEE may issue Notices to Lessees and Operators (NTLs) that clarify,
supplement, or provide more detail about certain requirements. NTLs may
also outline what you must provide as required information in your
various submissions to BSEE.
Sec. 250.104 How may I appeal a decision made under BSEE regulations?
To appeal orders or decisions issued under BSEE regulations in 30
CFR parts 250 to 282, follow the procedures in 30 CFR part 290.
Sec. 250.105 Definitions.
Terms used in this part will have the meanings given in the Act and
as defined in this section:
Act means the OCS Lands Act, as amended (43 U.S.C. 1331 et seq.).
Affected State means with respect to any program, plan, lease sale,
or other activity proposed, conducted, or approved under the provisions
of the Act, any State:
(1) The laws of which are declared, under section 4(a)(2) of the
Act, to be the law of the United States for the portion of the OCS on
which such activity is, or is proposed to be, conducted;
(2) Which is, or is proposed to be, directly connected by
transportation facilities to any artificial island or installation or
other device permanently or temporarily attached to the seabed;
(3) Which is receiving, or according to the proposed activity, will
receive oil for processing, refining, or transshipment that was
extracted from the OCS and transported directly to such State by means
of vessels or by a combination of means including vessels;
(4) Which is designated by the Secretary as a State in which there
is a substantial probability of significant impact on or damage to the
coastal, marine, or human environment, or a State in which there will be
significant changes in the social, governmental, or economic
infrastructure, resulting from the exploration, development, and
production of oil and gas anywhere on the OCS; or
(5) In which the Secretary finds that because of such activity there
is, or will be, a significant risk of serious damage, due to factors
such as prevailing winds and currents to the marine or coastal
environment in the event of any oil spill, blowout, or release of oil or
gas from vessels, pipelines, or other transshipment facilities.
Air pollutant means any airborne agent or combination of agents for
which the Environmental Protection Agency (EPA) has established, under
section 109 of the Clean Air Act, national primary or secondary ambient
air quality standards.
Analyzed geological information means data collected under a permit
or a lease that have been analyzed. Analysis may include, but is not
limited to, identification of lithologic and fossil content, core
analysis, laboratory analyses
[[Page 54]]
of physical and chemical properties, well logs or charts, results from
formation fluid tests, and descriptions of hydrocarbon occurrences or
hazardous conditions.
Ancillary activities mean those activities on your lease or unit
that you:
(1) Conduct to obtain data and information to ensure proper
exploration or development of your lease or unit; and
(2) Can conduct without Bureau of Ocean Energy Management (BOEM)
approval of an application or permit.
Archaeological interest means capable of providing scientific or
humanistic understanding of past human behavior, cultural adaptation,
and related topics through the application of scientific or scholarly
techniques, such as controlled observation, contextual measurement,
controlled collection, analysis, interpretation, and explanation.
Archaeological resource means any material remains of human life or
activities that are at least 50 years of age and that are of
archaeological interest.
Arctic OCS means the Beaufort Sea and Chukchi Sea Planning Areas
(for more information on these areas, see the Proposed Final OCS Oil and
Gas Leasing Program for 2012-2017 (June 2012) at http://www.boem.gov/
Oil-and-Gas-Energy-Program/Leasing/ Five-Year-Program/2012-2017/Program-
Area-Maps/index.aspx).
Arctic OCS conditions means, for the purposes of this part, the
conditions operators can reasonably expect during operations on the
Arctic OCS. Such conditions, depending on the time of year, include, but
are not limited to: Extreme cold, freezing spray, snow, extended periods
of low light, strong winds, dense fog, sea ice, strong currents, and
dangerous sea states. Remote location, relative lack of infrastructure,
and the existence of subsistence hunting and fishing areas are also
characteristic of the Arctic region.
Attainment area means, for any air pollutant, an area that is shown
by monitored data or that is calculated by air quality modeling (or
other methods determined by the Administrator of EPA to be reliable) not
to exceed any primary or secondary ambient air quality standards
established by EPA.
Best available and safest technology (BAST) means the best available
and safest technologies that the BSEE Director determines to be
economically feasible wherever failure of equipment would have a
significant effect on safety, health, or the environment.
Best available control technology (BACT) means an emission
limitation based on the maximum degree of reduction for each air
pollutant subject to regulation, taking into account energy,
environmental and economic impacts, and other costs. The Regional
Supervisor will verify the BACT on a case-by-case basis, and it may
include reductions achieved through the application of processes,
systems, and techniques for the control of each air pollutant.
Cap and flow system means an integrated suite of equipment and
vessels, including a capping stack and associated flow lines, that, when
installed or positioned, is used to control the flow of fluids escaping
from the well by conveying the fluids to the surface to a vessel or
facility equipped to process the flow of oil, gas, and water. A cap and
flow system is a high pressure system that includes the capping stack
and piping necessary to convey the flowing fluids through the choke
manifold to the surface equipment.
Capping stack means a mechanical device, including one that is pre-
positioned, that can be installed on top of a subsea or surface wellhead
or blowout preventer to stop the uncontrolled flow of fluids into the
environment.
Coastal environment means the physical, atmospheric, and biological
components, conditions, and factors that interactively determine the
productivity, state, condition, and quality of the terrestrial ecosystem
from the shoreline inward to the boundaries of the coastal zone.
Coastal zone means the coastal waters (including the lands therein
and thereunder) and the adjacent shorelands (including the waters
therein and thereunder) strongly influenced by each other and in
proximity to the shorelands of the several coastal States. The coastal
zone includes islands, transition and intertidal areas, salt marshes,
wetlands, and beaches. The coastal zone extends seaward to the outer
limit of the U.S. territorial
[[Page 55]]
sea and extends inland from the shorelines to the extent necessary to
control shorelands, the uses of which have a direct and significant
impact on the coastal waters, and the inward boundaries of which may be
identified by the several coastal States, under the authority in section
305(b)(1) of the Coastal Zone Management Act (CZMA) of 1972.
Competitive reservoir means a reservoir in which there are one or
more producible or producing well completions on each of two or more
leases or portions of leases, with different lease operating interests,
from which the lessees plan future production.
Containment dome means a non-pressurized container that can be used
to collect fluids escaping from the well or equipment below the sea
surface or from seeps by suspending the device over the discharge or
seep location. The containment dome includes all of the equipment
necessary to capture and convey fluids to the surface.
Correlative rights when used with respect to lessees of adjacent
leases, means the right of each lessee to be afforded an equal
opportunity to explore for, develop, and produce, without waste,
minerals from a common source.
Data means facts and statistics, measurements, or samples that have
not been analyzed, processed, or interpreted.
Departures mean approvals granted by the appropriate BSEE or BOEM
representative for operating requirements/procedures other than those
specified in the regulations found in this part. These requirements/
procedures may be necessary to control a well; properly develop a lease;
conserve natural resources, or protect life, property, or the marine,
coastal, or human environment.
Development means those activities that take place following
discovery of minerals in paying quantities, including but not limited to
geophysical activity, drilling, platform construction, and operation of
all directly related onshore support facilities, and which are for the
purpose of producing the minerals discovered.
Development geological and geophysical (G&G) activities mean those
G&G and related data-gathering activities on your lease or unit that you
conduct following discovery of oil, gas, or sulphur in paying quantities
to detect or imply the presence of oil, gas, or sulphur in commercial
quantities.
Director means the Director of BSEE of the U.S. Department of the
Interior, or an official authorized to act on the Director's behalf.
District Manager means the BSEE officer with authority and
responsibility for operations or other designated program functions for
a district within a BSEE Region. For activities on the Alaska OCS, any
reference in this part to District Manager means the BSEE Regional
Supervisor.
Easement means an authorization for a nonpossessory, nonexclusive
interest in a portion of the OCS, whether leased or unleased, which
specifies the rights of the holder to use the area embraced in the
easement in a manner consistent with the terms and conditions of the
granting authority.
Eastern Gulf of Mexico means all OCS areas of the Gulf of Mexico the
BOEM Director decides are adjacent to the State of Florida. The Eastern
Gulf of Mexico is not the same as the Eastern Planning Area, an area
established for OCS lease sales.
Emission offsets mean emission reductions obtained from facilities,
either onshore or offshore, other than the facility or facilities
covered by the proposed Exploration Plan (EP) or Development and
Production Plan (DPP).
Enhanced recovery operations mean pressure maintenance operations,
secondary and tertiary recovery, cycling, and similar recovery
operations that alter the natural forces in a reservoir to increase the
ultimate recovery of oil or gas.
Existing facility, as used in 30 CFR 550.303, means an OCS facility
described in an Exploration Plan or a Development and Production Plan
approved before June 2, 1980.
Exploration means the commercial search for oil, gas, or sulphur.
Activities classified as exploration include but are not limited to:
(1) Geophysical and geological (G&G) surveys using magnetic,
gravity, seismic reflection, seismic refraction, gas
[[Page 56]]
sniffers, coring, or other systems to detect or imply the presence of
oil, gas, or sulphur; and
(2) Any drilling conducted for the purpose of searching for
commercial quantities of oil, gas, and sulphur, including the drilling
of any additional well needed to delineate any reservoir to enable the
lessee to decide whether to proceed with development and production.
Facility means:
(1) As used in Sec. 250.130, all installations permanently or
temporarily attached to the seabed on the OCS (including manmade islands
and bottom-sitting structures). They include mobile offshore drilling
units (MODUs) or other vessels engaged in drilling or downhole
operations, used for oil, gas or sulphur drilling, production, or
related activities. They include all floating production systems (FPSs),
variously described as column-stabilized-units (CSUs); floating
production, storage and offloading facilities (FPSOs); tension-leg
platforms (TLPs); spars, etc. They also include facilities for product
measurement and royalty determination (e.g., lease Automatic Custody
Transfer Units, gas meters) of OCS production on installations not on
the OCS. Any group of OCS installations interconnected with walkways, or
any group of installations that includes a central or primary
installation with processing equipment and one or more satellite or
secondary installations is a single facility. The Regional Supervisor
may decide that the complexity of the individual installations justifies
their classification as separate facilities.
(2) As used in 30 CFR 550.303, means all installations or devices
permanently or temporarily attached to the seabed. They include mobile
offshore drilling units (MODUs), even while operating in the ``tender
assist'' mode (i.e., with skid-off drilling units) or other vessels
engaged in drilling or downhole operations. They are used for
exploration, development, and production activities for oil, gas, or
sulphur and emit or have the potential to emit any air pollutant from
one or more sources. They include all floating production systems
(FPSs), including column-stabilized-units (CSUs); floating production,
storage and offloading facilities (FPSOs); tension-leg platforms (TLPs);
spars, etc. During production, multiple installations or devices are a
single facility if the installations or devices are at a single site.
Any vessel used to transfer production from an offshore facility is part
of the facility while it is physically attached to the facility.
(3) As used in Sec. 250.490(b), means a vessel, a structure, or an
artificial island used for drilling, well completion, well-workover, or
production operations.
(4) As used in Sec. Sec. 250.900 through 250.921, means all
installations or devices permanently or temporarily attached to the
seabed. They are used for exploration, development, and production
activities for oil, gas, or sulphur and emit or have the potential to
emit any air pollutant from one or more sources. They include all
floating production systems (FPSs), including column-stabilized-units
(CSUs); floating production, storage and offloading facilities (FPSOs);
tension-leg platforms (TLPs); spars, etc. During production, multiple
installations or devices are a single facility if the installations or
devices are at a single site. Any vessel used to transfer production
from an offshore facility is part of the facility while it is physically
attached to the facility.
(5) As used in subpart S of this part, all types of structures
permanently or temporarily attached to the seabed (e.g., mobile offshore
drilling units (MODUs); floating production systems; floating
production, storage and offloading facilities; tension-leg platforms;
and spars) that are used for exploration, development, and production
activities for oil, gas, or sulphur in the OCS. Facilities also include
DOI-regulated pipelines.
Flaring means the burning of natural gas as it is released into the
atmosphere.
Gas reservoir means a reservoir that contains hydrocarbons
predominantly in a gaseous (single-phase) state.
Gas-well completion means a well completed in a gas reservoir or in
the associated gas-cap of an oil reservoir.
Geological and geophysical (G&G) explorations mean those G&G surveys
on
[[Page 57]]
your lease or unit that use seismic reflection, seismic refraction,
magnetic, gravity, gas sniffers, coring, or other systems to detect or
imply the presence of oil, gas, or sulphur in commercial quantities.
Governor means the Governor of a State, or the person or entity
designated by, or under, State law to exercise the powers granted to
such Governor under the Act.
H2S absent means:
(1) Drilling, logging, coring, testing, or producing operations have
confirmed the absence of H2S in concentrations that could
potentially result in atmospheric concentrations of 20 ppm or more of
H2S; or
(2) Drilling in the surrounding areas and correlation of geological
and seismic data with equivalent stratigraphic units have confirmed an
absence of H2S throughout the area to be drilled.
H2S present means drilling, logging, coring, testing, or producing
operations have confirmed the presence of H2S in
concentrations and volumes that could potentially result in atmospheric
concentrations of 20 ppm or more of H2S.
H2S unknown means the designation of a zone or geologic formation
where neither the presence nor absence of H2S has been
confirmed.
Human environment means the physical, social, and economic
components, conditions, and factors that interactively determine the
state, condition, and quality of living conditions, employment, and
health of those affected, directly or indirectly, by activities
occurring on the OCS.
Interpreted geological information means geological knowledge, often
in the form of schematic cross sections, 3-dimensional representations,
and maps, developed by determining the geological significance of data
and analyzed geological information.
Interpreted geophysical information means geophysical knowledge,
often in the form of schematic cross sections, 3-dimensional
representations, and maps, developed by determining the geological
significance of geophysical data and analyzed geophysical information.
Lease means an agreement that is issued under section 8 or
maintained under section 6 of the Act and that authorizes exploration
for, and development and production of, minerals. The term also means
the area covered by that authorization, whichever the context requires.
Lease term pipelines mean those pipelines owned and operated by a
lessee or operator that are completely contained within the boundaries
of a single lease, unit, or contiguous (not cornering) leases of that
lessee or operator.
Lessee means a person who has entered into a lease with the United
States to explore for, develop, and produce the leased minerals. The
term lessee also includes the BOEM-approved assignee of the lease, and
the owner or the BOEM-approved assignee of operating rights for the
lease.
Major Federal action means any action or proposal by the Secretary
that is subject to the provisions of section 102(2)(C) of the National
Environmental Policy Act of 1969, 42 U.S.C. (2)(C) (i.e., an action that
will have a significant impact on the quality of the human environment
requiring preparation of an environmental impact statement under section
102(2)(C) of the National Environmental Policy Act).
Marine environment means the physical, atmospheric, and biological
components, conditions, and factors that interactively determine the
productivity, state, condition, and quality of the marine ecosystem.
These include the waters of the high seas, the contiguous zone,
transitional and intertidal areas, salt marshes, and wetlands within the
coastal zone and on the OCS.
Material remains mean physical evidence of human habitation,
occupation, use, or activity, including the site, location, or context
in which such evidence is situated.
Maximum efficient rate (MER) means the maximum sustainable daily oil
or gas withdrawal rate from a reservoir that will permit economic
development and depletion of that reservoir without detriment to
ultimate recovery.
Maximum production rate (MPR) means the approved maximum daily rate
at which oil or gas may be produced from a specified oil-well or gas-
well completion.
Minerals include oil, gas, sulphur, geopressured-geothermal and
associated resources, and all other minerals
[[Page 58]]
that are authorized by an Act of Congress to be produced.
Natural resources include, without limiting the generality thereof,
oil, gas, and all other minerals, and fish, shrimp, oysters, clams,
crabs, lobsters, sponges, kelp, and other marine animal and plant life
but does not include water power or the use of water for the production
of power.
Nonattainment area means, for any air pollutant, an area that is
shown by monitored data or that is calculated by air quality modeling
(or other methods determined by the Administrator of EPA to be reliable)
to exceed any primary or secondary ambient air quality standard
established by EPA.
Nonsensitive reservoir means a reservoir in which ultimate recovery
is not decreased by high reservoir production rates.
Oil reservoir means a reservoir that contains hydrocarbons
predominantly in a liquid (single-phase) state.
Oil reservoir with an associated gas cap means a reservoir that
contains hydrocarbons in both a liquid and gaseous (two-phase) state.
Oil-well completion means a well completed in an oil reservoir or in
the oil accumulation of an oil reservoir with an associated gas cap.
Operating rights mean any interest held in a lease with the right to
explore for, develop, and produce leased substances.
Operator means the person the lessee(s) designates as having control
or management of operations on the leased area or a portion thereof. An
operator may be a lessee, the BSEE-approved or BOEM-approved designated
agent of the lessee(s), or the holder of operating rights under a BOEM-
approved operating rights assignment.
Outer Continental Shelf (OCS) means all submerged lands lying
seaward and outside of the area of lands beneath navigable waters as
defined in section 2 of the Submerged Lands Act (43 U.S.C. 1301) whose
subsoil and seabed appertain to the United States and are subject to its
jurisdiction and control.
Person includes a natural person, an association (including
partnerships, joint ventures, and trusts), a State, a political
subdivision of a State, or a private, public, or municipal corporation.
Pipelines are the piping, risers, and appurtenances installed for
transporting oil, gas, sulphur, and produced waters.
Processed geological or geophysical information means data collected
under a permit or a lease that have been processed or reprocessed.
Processing involves changing the form of data to facilitate
interpretation. Processing operations may include, but are not limited
to, applying corrections for known perturbing causes, rearranging or
filtering data, and combining or transforming data elements.
Reprocessing is the additional processing other than ordinary processing
used in the general course of evaluation. Reprocessing operations may
include varying identified parameters for the detailed study of a
specific problem area.
Production means those activities that take place after the
successful completion of any means for the removal of minerals,
including such removal, field operations, transfer of minerals to shore,
operation monitoring, maintenance, and workover operations.
Production areas are those areas where flammable petroleum gas,
volatile liquids or sulphur are produced, processed (e.g., compressed),
stored, transferred (e.g., pumped), or otherwise handled before entering
the transportation process.
Projected emissions mean emissions, either controlled or
uncontrolled, from a source or sources.
Prospect means a geologic feature having the potential for mineral
deposits.
Regional Director means the BSEE officer with responsibility and
authority for a Region within BSEE.
Regional Supervisor means the BSEE officer with responsibility and
authority for operations or other designated program functions within a
BSEE Region.
Right-of-use means any authorization issued under 30 CFR Part 550 to
use OCS lands.
Right-of-way pipelines are those pipelines that are contained
within:
(1) The boundaries of a single lease or unit, but are not owned and
operated
[[Page 59]]
by a lessee or operator of that lease or unit;
(2) The boundaries of contiguous (not cornering) leases that do not
have a common lessee or operator;
(3) The boundaries of contiguous (not cornering) leases that have a
common lessee or operator but are not owned and operated by that common
lessee or operator; or
(4) An unleased block(s).
Routine operations, for the purposes of subpart F, mean any of the
following operations conducted on a well with the tree installed:
(1) Cutting paraffin;
(2) Removing and setting pump-through-type tubing plugs, gas-lift
valves, and subsurface safety valves that can be removed by wireline
operations;
(3) Bailing sand;
(4) Pressure surveys;
(5) Swabbing;
(6) Scale or corrosion treatment;
(7) Caliper and gauge surveys;
(8) Corrosion inhibitor treatment;
(9) Removing or replacing subsurface pumps;
(10) Through-tubing logging (diagnostics);
(11) Wireline fishing;
(12) Setting and retrieving other subsurface flow-control devices;
and
(13) Acid treatments.
Sensitive reservoir means a reservoir in which the production rate
will affect ultimate recovery.
Significant archaeological resource means those archaeological
resources that meet the criteria of significance for eligibility to the
National Register of Historic Places as defined in 36 CFR 60.4, or its
successor.
Source control and containment equipment (SCCE) means the capping
stack, cap and flow system, containment dome, and/or other subsea and
surface devices, equipment, and vessels the collective purpose of which
is to control a spill source and stop the flow of fluids into the
environment or to contain fluids escaping into the environment.
``Surface devices'' refers to equipment mounted or staged on a barge,
vessel, or facility to separate, treat, store and/or dispose of fluids
conveyed to the surface by the cap and flow system or the containment
dome. ``Subsea devices'' includes, but is not limited to, remotely
operated vehicles, anchors, buoyancy equipment, connectors, cameras,
controls and other subsea equipment necessary to facilitate the
deployment, operation, and retrieval of the SCCE. The SCCE does not
include a blowout preventer.
Suspension means a granted or directed deferral of the requirement
to produce (Suspension of Production (SOP)) or to conduct leaseholding
operations (Suspension of Operations (SOO)).
Venting means the release of gas into the atmosphere without
igniting it. This includes gas that is released underwater and bubbles
to the atmosphere.
Waste of oil, gas, or sulphur means:
(1) The physical waste of oil, gas, or sulphur;
(2) The inefficient, excessive, or improper use, or the unnecessary
dissipation of reservoir energy;
(3) The locating, spacing, drilling, equipping, operating, or
producing of any oil, gas, or sulphur well(s) in a manner that causes or
tends to cause a reduction in the quantity of oil, gas, or sulphur
ultimately recoverable under prudent and proper operations or that
causes or tends to cause unnecessary or excessive surface loss or
destruction of oil or gas; or
(4) The inefficient storage of oil.
Welding means all activities connected with welding, including hot
tapping and burning.
Wellbay is the area on a facility within the perimeter of the
outermost wellheads.
Well-completion operations mean the work conducted to establish
production from a well after the production-casing string has been set,
cemented, and pressure-tested.
Well-control fluid means drilling mud, completion fluid, or workover
fluid as appropriate to the particular operation being conducted.
Western Gulf of Mexico means all OCS areas of the Gulf of Mexico
except those the BOEM Director decides are adjacent to the State of
Florida. The Western Gulf of Mexico is not the same as the Western
Planning Area, an area established for OCS lease sales.
[[Page 60]]
Workover operations mean the work conducted on wells after the
initial well-completion operation for the purpose of maintaining or
restoring the productivity of a well.
You means a lessee, the owner or holder of operating rights, a
designated operator or agent of the lessee(s), a pipeline right-of-way
holder, or a State lessee granted a right-of-use and easement.
[76 FR 64462, Oct. 18, 2011, as amended at 78 FR 20439, Apr. 5, 2013; 81
FR 46560, July 15, 2016]
Performance Standards
Sec. 250.106 What standards will the Director use to regulate
lease operations?
The Director will regulate all operations under a lease, right-of-
use and easement, or right-of-way to:
(a) Promote orderly exploration, development, and production of
mineral resources;
(b) Prevent injury or loss of life;
(c) Prevent damage to or waste of any natural resource, property, or
the environment; and
(d) Cooperate and consult with affected States, local governments,
other interested parties, and relevant Federal agencies.
Sec. 250.107 What must I do to protect health, safety, property,
and the environment?
(a) You must protect health, safety, property, and the environment
by:
(1) Performing all operations in a safe and workmanlike manner;
(2) Maintaining all equipment and work areas in a safe condition;
(3) Utilizing recognized engineering practices that reduce risks to
the lowest level practicable when conducting design, fabrication,
installation, operation, inspection, repair, and maintenance activities;
and
(4) Complying with all lease, plan, and permit terms and conditions.
(b) You must immediately control, remove, or otherwise correct any
hazardous oil and gas accumulation or other health, safety, or fire
hazard.
(c) Best available and safest technology. (1) On all new drilling
and production operations and, except as provided in paragraph (c)(3) of
this section, on existing operations, you must use the best available
and safest technologies (BAST) which the Director determines to be
economically feasible whenever the Director determines that failure of
equipment would have a significant effect on safety, health, or the
environment, except where the Director determines that the incremental
benefits are clearly insufficient to justify the incremental costs of
utilizing such technologies.
(2) Conformance with BSEE regulations will be presumed to constitute
the use of BAST unless and until the Director determines that other
technologies are required pursuant to paragraph (c)(1) of this section.
(3) The Director may waive the requirement to use BAST on a category
of existing operations if the Director determines that use of BAST by
that category of existing operations would not be practicable. The
Director may waive the requirement to use BAST on an existing operation
at a specific facility if you submit a waiver request demonstrating that
the use of BAST would not be practicable.
(d) BSEE may issue orders to ensure compliance with this part,
including, but not limited to, orders to produce and submit records and
to inspect, repair, and/or replace equipment. BSEE may also issue orders
to shut-in operations of a component or facility because of a threat of
serious, irreparable, or immediate harm to health, safety, property, or
the environment posed by those operations or because the operations
violate law, including a regulation, order, or provision of a lease,
plan, or permit.
[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 26014, Apr. 29, 2016;
81 FR 61915, Sept. 7, 2016]
Sec. 250.108 What requirements must I follow for cranes and other
material-handling equipment?
(a) All cranes installed on fixed platforms must be operated in
accordance with American Petroleum Institute's Recommended Practice for
Operation and Maintenance of Offshore Cranes, API RP 2D (as incorporated
by reference in Sec. 250.198).
[[Page 61]]
(b) All cranes installed on fixed platforms must be equipped with a
functional anti-two block device.
(c) If a fixed platform is installed after March 17, 2003, all
cranes on the platform must meet the requirements of American Petroleum
Institute Specification for Offshore Pedestal Mounted Cranes, API Spec
2C (as incorporated by reference in Sec. 250.198).
(d) All cranes manufactured after March 17, 2003, and installed on a
fixed platform, must meet the requirements of API Spec 2C.
(e) You must maintain records specific to a crane or the operation
of a crane installed on an OCS fixed platform, as follows:
(1) Retain all design and construction records, including
installation records for any anti-two block safety devices, for the life
of the crane. The records must be kept at the OCS fixed platform.
(2) Retain all inspection, testing, and maintenance records of
cranes for at least 4 years. The records must be kept at the OCS fixed
platform.
(3) Retain the qualification records of the crane operator and all
rigger personnel for at least 4 years. The records must be kept at the
OCS fixed platform.
(f) You must operate and maintain all other material-handling
equipment in a manner that ensures safe operations and prevents
pollution.
Sec. 250.109 What documents must I prepare and maintain related to welding?
(a) You must submit a Welding Plan to the District Manager before
you begin drilling or production activities on a lease. You may not
begin welding until the District Manager has approved your plan.
(b) You must keep the following at the site where welding occurs:
(1) A copy of the plan and its approval letter; and
(2) Drawings showing the designated safe-welding areas.
Sec. 250.110 What must I include in my welding plan?
You must include all of the following in the welding plan that you
prepare under Sec. 250.109:
(a) Standards or requirements for welders;
(b) How you will ensure that only qualified personnel weld;
(c) Practices and procedures for safe welding that address:
(1) Welding in designated safe areas;
(2) Welding in undesignated areas, including wellbay;
(3) Fire watches;
(4) Maintenance of welding equipment; and
(5) Plans showing all designated safe-welding areas.
(d) How you will prevent spark-producing activities (i.e., grinding,
abrasive blasting/cutting and arc-welding) in hazardous locations.
Sec. 250.111 Who oversees operations under my welding plan?
A welding supervisor or a designated person in charge must be
thoroughly familiar with your welding plan. This person must ensure that
each welder is properly qualified according to the welding plan. This
person also must inspect all welding equipment before welding.
Sec. 250.112 What standards must my welding equipment meet?
Your welding equipment must meet the following requirements:
(a) All engine-driven welding equipment must be equipped with spark
arrestors and drip pans;
(b) Welding leads must be completely insulated and in good
condition;
(c) Hoses must be leak-free and equipped with proper fittings,
gauges, and regulators; and
(d) Oxygen and fuel gas bottles must be secured in a safe place.
Sec. 250.113 What procedures must I follow when welding?
(a) Before you weld, you must move any equipment containing
hydrocarbons or other flammable substances at least 35 feet horizontally
from the welding area. You must move similar equipment on lower decks at
least 35 feet from the point of impact where slag, sparks, or other
burning materials could fall. If moving this equipment is impractical,
you must protect that equipment with flame-proofed
[[Page 62]]
covers, shield it with metal or fire-resistant guards or curtains, or
render the flammable substances inert.
(b) While you weld, you must monitor all water-discharge-point
sources from hydrocarbon-handling vessels. If a discharge of flammable
fluids occurs, you must stop welding.
(c) If you cannot weld in one of the designated safe-welding areas
that you listed in your safe welding plan, you must meet the following
requirements:
(1) You may not begin welding until:
(i) The welding supervisor or designated person in charge advises in
writing that it is safe to weld.
(ii) You and the designated person in charge inspect the work area
and areas below it for potential fire and explosion hazards.
(2) During welding, the person in charge must designate one or more
persons as a fire watch. The fire watch must:
(i) Have no other duties while actual welding is in progress;
(ii) Have usable firefighting equipment;
(iii) Remain on duty for 30 minutes after welding activities end;
and
(iv) Maintain a continuous surveillance with a portable gas detector
during the welding and burning operation if welding occurs in an area
not equipped with a gas detector.
(3) You may not weld piping, containers, tanks, or other vessels
that have contained a flammable substance unless you have rendered the
contents inert and the designated person in charge has determined it is
safe to weld. This does not apply to approved hot taps.
(4) You may not weld within 10 feet of a wellbay unless you have
shut in all producing wells in that wellbay.
(5) You may not weld within 10 feet of a production area, unless you
have shut in that production area.
(6) You may not weld while you drill, complete, workover, or conduct
wireline operations unless:
(i) The fluids in the well (being drilled, completed, worked over,
or having wireline operations conducted) are noncombustible; and
(ii) You have precluded the entry of formation hydrocarbons into the
wellbore by either mechanical means or a positive overbalance toward the
formation.
Sec. 250.114 How must I install, maintain, and operate electrical equipment?
The requirements in this section apply to all electrical equipment
on all platforms, artificial islands, fixed structures, and their
facilities.
(a) You must classify all areas according to API RP 500, Recommended
Practice for Classification of Locations for Electrical Installations at
Petroleum Facilities Classified as Class I, Division 1 and Division 2
(as incorporated by reference in Sec. 250.198), or API RP 505,
Recommended Practice for Classification of Locations for Electrical
Installations at Petroleum Facilities Classified as Class I, Zone 0,
Zone 1, and Zone 2 (as incorporated by reference in Sec. 250.198).
(b) Employees who maintain your electrical systems must have
expertise in area classification and the performance, operation and
hazards of electrical equipment.
(c) You must install all electrical systems according to API RP 14F,
Recommended Practice for Design and Installation of Electrical Systems
for Fixed and Floating Offshore Petroleum Facilities for Unclassified
and Class I, Division 1, and Division 2 Locations (as incorporated by
reference in Sec. 250.198), or API RP 14FZ, Recommended Practice for
Design and Installation of Electrical Systems for Fixed and Floating
Offshore Petroleum Facilities for Unclassified and Class I, Zone 0, Zone
1, and Zone 2 Locations (as incorporated by reference in Sec. 250.198).
(d) On each engine that has an electric ignition system, you must
use an ignition system designed and maintained to reduce the release of
electrical energy.
[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 36149, June 6, 2016]
Sec. Sec. 250.115-250.117 [Reserved]
Gas Storage or Injection
Sec. 250.118 Will BSEE approve gas injection?
The Regional Supervisor may authorize you to inject gas on the OCS,
on and off-lease, to promote conservation
[[Page 63]]
of natural resources and to prevent waste.
(a) To receive BSEE approval for injection, you must:
(1) Show that the injection will not result in undue interference
with operations under existing leases; and
(2) Submit a written application to the Regional Supervisor for
injection of gas.
(b) The Regional Supervisor will approve gas injection applications
that:
(1) Enhance recovery;
(2) Prevent flaring of casinghead gas; or
(3) Implement other conservation measures approved by the Regional
Supervisor.
Sec. 250.119 [Reserved]
Sec. 250.120 How does injecting, storing, or treating gas affect
my royalty payments?
(a) If you produce gas from an OCS lease and inject it into a
reservoir on the lease or unit for the purposes cited in Sec.
250.118(b), you are not required to pay royalties until you remove or
sell the gas from the reservoir.
(b) If you produce gas from an OCS lease and store it according to
30 CFR 550.119, you must pay royalty before injecting it into the
storage reservoir.
(c) If you produce gas from an OCS lease and treat it at an off-
lease or off-unit location, you must pay royalties when the gas is first
produced.
Sec. 250.121 What happens when the reservoir contains both original gas
in place and injected gas?
If the reservoir contains both original gas in place and injected
gas, when you produce gas from the reservoir you must use a BSEE-
approved formula to determine the amounts of injected or stored gas and
gas original to the reservoir.
Sec. 250.122 What effect does subsurface storage have on the lease term?
If you use a lease area for subsurface storage of gas, it does not
affect the continuance or expiration of the lease.
Sec. 250.123 [Reserved]
Sec. 250.124 Will BSEE approve gas injection into the cap rock containing
a sulphur deposit?
To receive the Regional Supervisor's approval to inject gas into the
cap rock of a salt dome containing a sulphur deposit, you must show that
the injection:
(a) Is necessary to recover oil and gas contained in the cap rock;
and
(b) Will not significantly increase potential hazards to present or
future sulphur mining operations.
Fees
Sec. 250.125 Service fees.
(a) The table in this paragraph (a) shows the fees that you must pay
to BSEE for the services listed. The fees will be adjusted periodically
according to the Implicit Price Deflator for Gross Domestic Product by
publication of a document in the Federal Register. If a significant
adjustment is needed to arrive at the new actual cost for any reason
other than inflation, then a proposed rule containing the new fees will
be published in the Federal Register for comment.
------------------------------------------------------------------------
Service--processing of the
following: Fee amount 30 CFR citation
------------------------------------------------------------------------
(1) Suspension of Operations/ $2,123................ Sec.
Suspension of Production (SOO/ 250.171(e).
SOP) Request.
(2) Deepwater Operations Plan $3,599................ Sec.
(DWOP). 250.292(q).
(3) Application for Permit to $2,113 for initial Sec.
Drill (APD); Form BSEE-0123. applications only; no 250.410(d);
fee for revisions. Sec.
250.513(b);
Sec.
250.1617(a).
(4) Application for Permit to $125.................. Sec.
Modify (APM); Form BSEE-0124. 250.465(b);
Sec.
250.513(b);
Sec.
250.613(b);
Sec.
250.1618(a);
Sec.
250.1704(g).
[[Page 64]]
(5) New Facility Production $5,426................ Sec. 250.842.
Safety System Application for $14,280 additional fee
facility with more than 125 will be charged if
components. BSEE conducts a pre-
production inspection
of a facility
offshore, and $7,426
for an inspection of
a facility while in a
shipyard.
A component is a piece
of equipment or
ancillary system that
is protected by one
or more of the safety
devices required by
API RP 14C (as
incorporated by
reference in Sec.
250.198).
(6) New Facility Production $1,314................ Sec. 250.842.
Safety System Application for $8,967 additional fee
facility with 25-125 will be charged if
components. BSEE conducts a pre-
production inspection
of a facility
offshore, and $5,141
for an inspection of
a facility while in a
shipyard.
(7) New Facility Production $652.................. Sec. 250.842.
Safety System Application for
facility with fewer than 25
components.
(8) Production Safety System $605.................. Sec. 250.842.
Application--Modification
with more than 125 components
reviewed.
(9) Production Safety System $217.................. Sec. 250.842.
Application--Modification
with 25-125 components
reviewed.
(10) Production Safety System $92................... Sec. 250.842.
Application--Modification
with fewer than 25 components
reviewed.
(11) Platform Application-- $22,734............... Sec.
Installation--Under the 250.905(l).
Platform Verification Program.
(12) Platform Application-- $3,256................ Sec.
Installation--Fixed Structure 250.905(l).
Under the Platform Approval
Program.
(13) Platform Application-- $1,657................ Sec.
Installation--Caisson/Well 250.905(l)
Protector.
(14) Platform Application-- $3,884................ Sec.
Modification/Repair. 250.905(l).
(15) New Pipeline Application $3,541................ Sec.
(Lease Term). 250.1000(b).
(16) Pipeline Application-- $2,056................ Sec.
Modification (Lease Term). 250.1000(b).
(17) Pipeline Application-- $4,169................ Sec.
Modification (ROW). 250.1000(b).
(18) Pipeline Repair $388.................. Sec.
Notification. 250.1008(e).
(19) Pipeline Right-of-Way $2,771................ Sec.
(ROW) Grant Application. 250.1015(a).
(20) Pipeline Conversion of $236.................. Sec.
Lease Term to ROW. 250.1015(a).
(21) Pipeline ROW Assignment.. $201.................. Sec.
250.1018(b).
(22) 500 Feet From Lease/Unit $3,892................ Sec.
Line Production Request. 250.1156(a).
(23) Gas Cap Production $4,953................ Sec. 250.1157.
Request.
(24) Downhole Commingling $5,779................ Sec.
Request. 250.1158(a).
(25) Complex Surface $4,056................ Sec.
Commingling and Measurement 250.1202(a);
Application. Sec.
250.1203(b);
Sec.
250.1204(a).
(26) Simple Surface $1,371................ Sec.
Commingling and Measurement 250.1202(a);
Application. Sec.
250.1203(b);
Sec.
250.1204(a).
(27) Voluntary Unitization $12,619............... Sec.
Proposal or Unit Expansion. 250.1303(d).
(28) Unitization Revision..... $896.................. Sec.
250.1303(d).
(29) Application to Remove a $4,684................ Sec. 250.1727.
Platform or Other Facility.
(30) Application to $1,142................ Sec.
Decommission a Pipeline 250.1751(a) or
(Lease Term). Sec.
250.1752(a).
[[Page 65]]
(31) Application to $2,170................ Sec.
Decommission a Pipeline (ROW). 250.1751(a) or
Sec.
250.1752(a).
------------------------------------------------------------------------
(b) Payment of the fees listed in paragraph (a) of this section must
accompany the submission of the document for approval or be sent to an
office identified by the Regional Director. Once a fee is paid, it is
nonrefundable, even if an application or other request is withdrawn. If
your application is returned to you as incomplete, you are not required
to submit a new fee when you submit the amended application.
(c) Verbal approvals are occasionally given in special
circumstances. Any action that will be considered a verbal permit
approval requires either a paper permit application to follow the verbal
approval or an electronic application submittal within 72 hours. Payment
must be made with the completed paper or electronic application.
[76 FR 64462, Oct. 18, 2011, as amended at 77 FR 50891, Aug. 22, 2012;
78 FR 60213, Oct. 1, 2013; 81 FR 26014, Apr. 29, 2016; 81 FR 61916,
Sept. 7, 2016]
Sec. 250.126 Electronic payment instructions.
(a) You must file all payments electronically through the Fees for
Services page on the BSEE Web site at http://www.bsee.gov. This
includes, but is not limited to, all OCS applications, permits, or any
filing fees. You must include a copy of the Pay.gov confirmation receipt
page with your application, permit, or filing fee.
(b) If you submitted an application or permit through eWell, you
must use the interactive payment feature in that system, which directs
you through Pay.gov to make a payment. It is recommended that you keep a
copy of your payment confirmation receipt in the event that any
questions arise regarding your transaction.
[81 FR 36149, June 6, 2016]
Inspections of Operations
Sec. 250.130 Why does BSEE conduct inspections?
BSEE will inspect OCS facilities and any vessels engaged in drilling
or other downhole operations. These include facilities under
jurisdiction of other Federal agencies that we inspect by agreement. We
conduct these inspections:
(a) To verify that you are conducting operations according to the
Act, the regulations, the lease, right-of-way, the BOEM-approved
Exploration Plan or Development and Production Plans; or right-of-use
and easement, and other applicable laws and regulations; and
(b) To determine whether equipment designed to prevent or ameliorate
blowouts, fires, spillages, or other major accidents has been installed
and is operating properly according to the requirements of this part.
Sec. 250.131 Will BSEE notify me before conducting an inspection?
BSEE conducts both scheduled and unscheduled inspections.
Sec. 250.132 What must I do when BSEE conducts an inspection?
(a) When BSEE conducts an inspection, you must provide:
(1) Access to all platforms, artificial islands, and other
installations on your leases or associated with your lease, right-of-use
and easement, or right-of-way; and
(2) Helicopter landing sites and refueling facilities for any
helicopters we use to regulate offshore operations.
(b) You must make the following available for us to inspect:
(1) The area covered under a lease, right-of-use and easement,
right-of-way, or permit;
(2) All improvements, structures, and fixtures on these areas; and
(3) All records of design, construction, operation, maintenance,
repairs, or investigations on or related to the area.
[[Page 66]]
Sec. 250.133 Will BSEE reimburse me for my expenses related to inspections?
Upon request, BSEE will reimburse you for food, quarters, and
transportation that you provide for BSEE representatives while they
inspect lease facilities and operations. You must send us your
reimbursement request within 90 days of the inspection.
Disqualification
Sec. 250.135 What will BSEE do if my operating performance is unacceptable?
BSEE will determine if your operating performance is unacceptable.
BSEE will refer a determination of unacceptable performance to BOEM, who
may disapprove or revoke your designation as operator on a single
facility or multiple facilities. We will give you adequate notice and
opportunity for a review by BSEE officials before making a determination
that your operating performance is unacceptable.
Sec. 250.136 How will BSEE determine if my operating performance
is unacceptable?
In determining if your operating performance is unacceptable, BSEE
will consider, individually or collectively:
(a) Accidents and their nature;
(b) Pollution events, environmental damages and their nature;
(c) Incidents of noncompliance;
(d) Civil penalties;
(e) Failure to adhere to OCS lease obligations; or
(f) Any other relevant factors.
Special Types of Approvals
Sec. 250.140 When will I receive an oral approval?
When you apply for BSEE approval of any activity, we normally give
you a written decision. The following table shows circumstances under
which we may give an oral approval.
------------------------------------------------------------------------
When you . . . We may . . . And . . .
------------------------------------------------------------------------
(a) Request approval Give you an oral You must then confirm the
orally approval, oral request by sending
us a written request
within 72 hours.
(b) Request approval Give you an oral We will send you a
in writing, approval if quick written approval
action is needed, afterward. It will
include any conditions
that we place on the
oral approval.
(c) Request approval Give you an oral You don't have to follow
orally for gas approval, up with a written
flaring, request unless the
Regional Supervisor
requires it. When you
stop the approved
flaring, you must
promptly send a letter
summarizing the
location, dates and
hours, and volumes of
liquid hydrocarbons
produced and gas flared
by the approved flaring
(see 30 CFR 250, subpart
K).
------------------------------------------------------------------------
Sec. 250.141 May I ever use alternate procedures or equipment?
You may use alternate procedures or equipment after receiving
approval as described in this section.
(a) Any alternate procedures or equipment that you propose to use
must provide a level of safety and environmental protection that equals
or surpasses current BSEE requirements.
(b) You must receive the District Manager's or Regional Supervisor's
written approval before you can use alternate procedures or equipment.
(c) To receive approval, you must either submit information or give
an oral presentation to the appropriate Regional Supervisor. Your
presentation must describe the site-specific application(s), performance
characteristics, and safety features of the proposed procedure or
equipment.
Sec. 250.142 How do I receive approval for departures?
We may approve departures to the operating requirements. You may
apply for a departure by writing to the District Manager or Regional
Supervisor.
Sec. Sec. 250.143-250.144 [Reserved]
Sec. 250.145 How do I designate an agent or a local agent?
(a) You or your designated operator may designate for the Regional
Supervisor's approval, or the Regional Director may require you to
designate an
[[Page 67]]
agent empowered to fulfill your obligations under the Act, the lease, or
the regulations in this part.
(b) You or your designated operator may designate for the Regional
Supervisor's approval a local agent empowered to receive notices and
submit requests, applications, notices, or supplemental information.
Sec. 250.146 Who is responsible for fulfilling leasehold obligations?
(a) When you are not the sole lessee, you and your co-lessee(s) are
jointly and severally responsible for fulfilling your obligations under
the provisions of 30 CFR parts 250 through 282 and 30 CFR parts 550
through 582 unless otherwise provided in these regulations.
(b) If your designated operator fails to fulfill any of your
obligations under 30 CFR parts 250 through 282 and 30 CFR parts 550
through 582, the Regional Supervisor may require you or any or all of
your co-lessees to fulfill those obligations or other operational
obligations under the Act, the lease, or the regulations.
(c) Whenever the regulations in 30 CFR parts 250 through 282 and 30
CFR parts 550 through 582 require the lessee to meet a requirement or
perform an action, the lessee, operator (if one has been designated),
and the person actually performing the activity to which the requirement
applies are jointly and severally responsible for complying with the
regulation.
Naming and Identifying Facilities and Wells (Does Not Include MODUs)
Sec. 250.150 How do I name facilities and wells in the Gulf of Mexico Region?
(a) Assign each facility a letter designation except for those types
of facilities identified in paragraph (c)(1) of this section. For
example, A, B, CA, or CB.
(1) After a facility is installed, rename each predrilled well that
was assigned only a number and was suspended temporarily at the mudline
or at the surface. Use a letter and number designation. The letter used
must be the same as that of the production facility, and the number used
must correspond to the order in which the well was completed, not
necessarily the number assigned when it was drilled. For example, the
first well completed for production on Facility A would be renamed Well
A-1, the second would be Well A-2, and so on; and
(2) When you have more than one facility on a block, each facility
installed, and not bridge-connected to another facility, must be named
using a different letter in sequential order. For example, EC 222A, EC
222B, EC 222C.
(3) When you have more than one facility on multiple blocks in a
local area being co-developed, each facility installed and not connected
with a walkway to another facility should be named using a different
letter in sequential order with the block number corresponding to the
block on which the platform is located. For example, EC 221A, EC 222B,
and EC 223C.
(b) In naming multiple well caissons, you must assign a letter
designation.
(c) In naming single well caissons, you must use certain criteria as
follows:
(1) For single well caissons not attached to a facility with a
walkway, use the well designation. For example, Well No. 1;
(2) For single well caissons attached to a facility with a walkway,
use the same designation as the facility. For example, rename Well No.10
as A-10; and
(3) For single well caissons with production equipment, use a letter
designation for the facility name and a letter plus number designation
for the well. For example, the Well No. 1 caisson would be designated as
Facility A, and the well would be Well A-1.
Sec. 250.151 How do I name facilities in the Pacific Region?
The operator assigns a name to the facility.
Sec. 250.152 How do I name facilities in the Alaska Region?
Facilities will be named and identified according to the Regional
Director's directions.
[[Page 68]]
Sec. 250.153 Do I have to rename an existing facility or well?
You do not have to rename facilities installed and wells drilled
before January 27, 2000, unless the Regional Director requires it.
Sec. 250.154 What identification signs must I display?
(a) You must identify all facilities, artificial islands, and mobile
offshore drilling units with a sign maintained in a legible condition.
(1) You must display an identification sign that can be viewed from
the waterline on at least one side of the platform. The sign must use at
least 3-inch letters and figures.
(2) When helicopter landing facilities are present, you must display
an additional identification sign that is visible from the air. The sign
must use at least 12-inch letters and figures and must also display the
weight capacity of the helipad unless noted on the top of the helipad.
If this sign is visible to both helicopter and boat traffic, then the
sign in paragraph (a)(1) of this section is not required.
(3) Your identification sign must:
(i) List the name of the lessee or designated operator;
(ii) In the GOM OCS Region, list the area designation or
abbreviation and the block number of the facility location as depicted
on OCS Official Protraction Diagrams or leasing maps;
(iii) In the Pacific OCS Region, list the lease number on which the
facility is located; and
(iv) List the name of the platform, structure, artificial island, or
mobile offshore drilling unit.
(b) You must identify singly completed wells and multiple
completions as follows:
(1) For each singly completed well, list the lease number and well
number on the wellhead or on a sign affixed to the wellhead;
(2) For wells with multiple completions, downhole splitter wells,
and multilateral wells, identify each completion in addition to the well
name and lease number individually on the well flowline at the wellhead;
and
(3) For subsea wells that flow individually into separate pipelines,
affix the required sign on the pipeline or surface flowline dedicated to
that subsea well at a convenient location on the receiving platform. For
multiple subsea wells that flow into a common pipeline or pipelines, no
sign is required.
Sec. Sec. 250.160-250.167 [Reserved]
Suspensions
Sec. 250.168 May operations or production be suspended?
(a) You may request approval of a suspension, or the Regional
Supervisor may direct a suspension (Directed Suspension), for all or any
part of a lease or unit area.
(b) Depending on the nature of the suspended activity, suspensions
are labeled either Suspensions of Operations (SOO) or Suspensions of
Production (SOP).
Sec. 250.169 What effect does suspension have on my lease?
(a) A suspension may extend the term of a lease (see Sec.
250.180(b), (d), and (e)). The extension is equal to the length of time
the suspension is in effect, except as provided in paragraph (b) of this
section.
(b) A Directed Suspension does not extend the term of a lease when
the Regional Supervisor directs a suspension because of:
(1) Gross negligence; or
(2) A willful violation of a provision of the lease or governing
statutes and regulations.
Sec. 250.170 How long does a suspension last?
(a) BSEE may issue suspensions for up to 5 years per suspension. The
Regional Supervisor will set the length of the suspension based on the
conditions of the individual case involved. BSEE may grant consecutive
suspension periods.
(b) An SOO ends automatically when the suspended operation
commences.
(c) An SOP ends automatically when production begins.
(d) A Directed Suspension normally ends as specified in the letter
directing the suspension.
(e) BSEE may terminate any suspension when the Regional Supervisor
determines the circumstances that justified the suspension no longer
exist or
[[Page 69]]
that other lease conditions warrant termination. The Regional Supervisor
will notify you of the reasons for termination and the effective date.
Sec. 250.171 How do I request a suspension?
You must submit your request for a suspension to the Regional
Supervisor, and BSEE must receive the request before the end of the
lease term (i.e., end of primary term, end of the 1-year period
following the last leaseholding operation, and end of a current
suspension). Your request must include:
(a) The justification for the suspension including the length of
suspension requested;
(b) A reasonable schedule of work leading to the commencement or
restoration of the suspended activity;
(c) A statement that a well has been drilled on the lease and
determined to be producible according to Sec. 250.1603 (SOP only), 30
CFR 550.115, or 30 CFR 550.116;
(d) A commitment to production (SOP only); and
(e) The service fee listed in Sec. 250.125 of this subpart.
[76 FR 64462, Oct. 18, 2011, as amended at 82 FR 26744, June 9, 2017]
Sec. 250.172 When may the Regional Supervisor grant or direct an SOO or SOP?
The Regional Supervisor may grant or direct an SOO or SOP under any
of the following circumstances:
(a) When necessary to comply with judicial decrees prohibiting any
activities or the permitting of those activities. The effective date of
the suspension will be the effective date required by the action of the
court;
(b) When activities pose a threat of serious, irreparable, or
immediate harm or damage. This would include a threat to life (including
fish and other aquatic life), property, any mineral deposit, or the
marine, coastal, or human environment. BSEE may require you to do a
site-specific study (see Sec. 250.177(a)).
(c) When necessary for the installation of safety or environmental
protection equipment;
(d) When necessary to carry out the requirements of NEPA or to
conduct an environmental analysis; or
(e) When necessary to allow for inordinate delays encountered in
obtaining required permits or consents, including administrative or
judicial challenges or appeals.
Sec. 250.173 When may the Regional Supervisor direct an SOO or SOP?
The Regional Supervisor may direct a suspension when:
(a) You failed to comply with an applicable law, regulation, order,
or provision of a lease or permit; or
(b) The suspension is in the interest of National security or
defense.
Sec. 250.174 When may the Regional Supervisor grant or direct an SOP?
The Regional Supervisor may grant or direct an SOP when the
suspension is in the National interest, and it is necessary because the
suspension will meet one of the following criteria:
(a) It will allow you to properly develop a lease, including time to
construct and install production facilities;
(b) It will allow you time to obtain adequate transportation
facilities;
(c) It will allow you time to enter a sales contract for oil, gas,
or sulphur. You must show that you are making an effort to enter into
the contract(s); or
(d) It will avoid continued operations that would result in
premature abandonment of a producing well(s).
Sec. 250.175 When may the Regional Supervisor grant an SOO?
(a) The Regional Supervisor may grant an SOO when necessary to allow
you time to begin drilling or other operations when you are prevented by
reasons beyond your control, such as unexpected weather, unavoidable
accidents, or drilling rig delays.
(b) The Regional Supervisor may grant an SOO when all of the
following conditions are met:
(1) The lease was issued with a primary lease term of 5 years, or
with a primary term of 8 years with a requirement to drill within 5
years;
(2) Before the end of the third year of the primary term, you or
your predecessor in interest must have acquired and interpreted
geophysical information that indicates:
(i) The presence of a salt sheet;
[[Page 70]]
(ii) That all or a portion of a potential hydrocarbon-bearing
formation may lie beneath or adjacent to the salt sheet; and
(iii) The salt sheet interferes with identification of the potential
hydrocarbon-bearing formation.
(3) The interpreted geophysical information required under paragraph
(b)(2) of this section must include full 3-D depth migration beneath the
salt sheet and over the entire lease area.
(4) Before requesting the suspension, you have conducted or are
conducting additional data processing or interpretation of the
geophysical information with the objective of identifying a potential
hydrocarbon-bearing formation.
(5) You demonstrate that additional time is necessary to:
(i) Complete current processing or interpretation of existing
geophysical data or information;
(ii) Acquire, process, or interpret new geophysical data or
information; or
(iii) Drill into the potential hydrocarbon-bearing formation
identified as a result of the activities conducted in paragraphs (b)(2),
(b)(4), and (b)(5) of this section.
(c) The Regional Supervisor may grant an SOO to conduct additional
geological and geophysical data analysis that may lead to the drilling
of a well below 25,000 feet true vertical depth below the datum at mean
sea level (TVD SS) when all of the following conditions are met:
(1) The lease was issued with a primary lease term of:
(i) Five years; or
(ii) Eight years with a requirement to drill within 5 years.
(2) Before the end of the fifth year of the primary term, you or
your predecessor in interest must have acquired and interpreted
geophysical information that:
(i) Indicates that all or a portion of a potential hydrocarbon-
bearing formation lies below 25,000 feet TVD SS; and
(ii) Includes full 3-D depth migration over the entire lease area.
(3) Before requesting the suspension, you have conducted or are
conducting additional data processing or interpretation of the
geophysical information with the objective of identifying a potential
hydrocarbon-bearing geologic structure or stratigraphic trap lying below
25,000 feet TVD SS.
(4) You demonstrate that additional time is necessary to:
(i) Complete current processing or interpretation of existing
geophysical data or information;
(ii) Acquire, process, or interpret new geophysical or geological
data or information that would affect the decision to drill the same
geologic structure or stratigraphic trap, as determined by the Regional
Supervisor, identified in paragraphs (c)(2) and (c)(3) of this section;
or
(iii) Drill a well below 25,000 feet TVD SS into the geologic
structure or stratigraphic trap identified as a result of the activities
conducted in paragraphs (c)(2), (c)(3), and (c)(4)(i) and (ii) of this
section.
Sec. 250.176 Does a suspension affect my royalty payment?
A directed suspension may affect the payment of rental or royalties
for the lease as provided in 30 CFR 1218.154.
Sec. 250.177 What additional requirements may the Regional Supervisor order
for a suspension?
If BSEE grants or directs a suspension under paragraph Sec.
250.172(b), the Regional Supervisor may require you to:
(a) Conduct a site-specific study.
(1) The Regional Supervisor must approve or prescribe the scope for
any site-specific study that you perform.
(2) The study must evaluate the cause of the hazard, the potential
damage, and the available mitigation measures.
(3) You must pay for the study unless you request, and the Regional
Supervisor agrees to arrange, payment by another party.
(4) You must furnish copies and results of the study to the Regional
Supervisor.
(5) BSEE will make the results available to other interested parties
and to the public.
(6) The Regional Supervisor will use the results of the study and
any other information that becomes available:
(i) To decide if the suspension can be lifted; and
[[Page 71]]
(ii) To determine any actions that you must take to mitigate or
avoid any damage to the environment, life, or property.
(b) Submit a revised Exploration Plan (including any required
mitigating measures);
(c) Submit a revised Development and Production Plan (including any
required mitigating measures); or
(d) Submit a revised Development Operations Coordination Document
according to 30 CFR part 550, subpart B.
Primary Lease Requirements, Lease Term Extensions, and Lease
Cancellations
Sec. 250.180 What am I required to do to keep my lease term in effect?
(a) If your lease is in its primary term:
(1) You must submit a report to the District Manager according to
paragraphs (h) and (i) of this section whenever production begins
initially, whenever production ceases during the last year of the
primary term, and whenever production resumes during the last year of
the primary term.
(2) Your lease expires at the end of its primary term unless you are
conducting operations on your lease (see 30 CFR part 556). For purposes
of this section, the term operations means, drilling, well-reworking, or
production in paying quantities. The objective of the drilling or well-
reworking must be to establish production in paying quantities on the
lease.
(b) If you stop conducting operations during the last year of your
primary lease term, your lease will expire unless you either resume
operations or receive an SOO or an SOP from the Regional Supervisor
under Sec. 250.172, Sec. 250.173, Sec. 250.174, or Sec. 250.175
before the end of the year after you stop operations.
(c) If you extend your lease term under paragraph (b) of this
section, you must pay rental or minimum royalty, as appropriate, for
each year or part of the year during which your lease continues in force
beyond the end of the primary lease term.
(d) If you stop conducting operations on a lease that has continued
beyond its primary term, your lease will expire unless you resume
operations or receive an SOO or an SOP from the Regional Supervisor
under Sec. 250.172, Sec. 250.173, Sec. 250.174, or Sec. 250.175
before the end of the year after you stop operations.
(e) You may ask the Regional Supervisor to allow you more than a
year to resume operations on a lease continued beyond its primary term
when operating conditions warrant. The request must be in writing and
explain the operating conditions that warrant a longer period. In
allowing additional time, the Regional Supervisor must determine that
the longer period is in the National interest, and it conserves
resources, prevents waste, or protects correlative rights.
(f) When you begin conducting operations on a lease that has
continued beyond its primary term, you must immediately notify the
District Manager either orally or by fax or e-mail and follow up with a
written report according to paragraph (g) of this section.
(g) If your lease is continued beyond its primary term, you must
submit a report to the District Manager under paragraphs (h) and (i) of
this section whenever production begins initially, whenever production
ceases, whenever production resumes before the end of the 1-year period
after having ceased, or whenever drilling or well-reworking operations
begin before the end of the 1-year period.
(h) The reports required by paragraphs (a) and (g) of this section
must contain:
(1) Name of lessee or operator;
(2) The well number, lease number, area, and block;
(3) As appropriate, the unit agreement name and number; and
(4) A description of the operation and pertinent dates.
(i) You must submit the reports required by paragraphs (a) and (g)
of this section within the following timeframes:
(1) Initialization of production--within 5 days of initial
production.
(2) Cessation of production--within 15 days after the first full
month of zero production.
(3) Resumption of production--within 5 days of resuming production
after
[[Page 72]]
ceasing production under paragraph (i)(2) of this section.
(4) Drilling or well reworking operations--within 5 days of
beginning and completing the leaseholding operations.
(j) For leases continued beyond the primary term, you must
immediately report to the District Manager if operations do not begin
before the end of the 1-year period.
[76 FR 64462, Oct. 18, 2011, as amended at 82 FR 26744, June 9, 2017]
Sec. Sec. 250.181-250.185 [Reserved]
Information and Reporting Requirements
Sec. 250.186 What reporting information and report forms must I submit?
(a) You must submit information and reports as BSEE requires.
(1) You may obtain copies of forms from, and submit completed forms
to, the District Manager or Regional Supervisor.
(2) Instead of paper copies of forms available from the District
Manager or Regional Supervisor, you may use your own computer-generated
forms that are equal in size to BSEE's forms. You must arrange the data
on your form identical to the BSEE form. If you generate your own form
and it omits terms and conditions contained on the official BSEE form,
we will consider it to contain the omitted terms and conditions.
(3) You may submit digital data when the Region/District is equipped
to accept it.
(b) When BSEE specifies, you must include, for public information,
an additional copy of such reports.
(1) You must mark it Public Information
(2) You must include all required information, except information
exempt from public disclosure under Sec. 250.197 or otherwise exempt
from public disclosure under law or regulation.
Sec. 250.187 What are BSEE's incident reporting requirements?
(a) You must report all incidents listed in Sec. 250.188(a) and (b)
to the District Manager. The specific reporting requirements for these
incidents are contained in Sec. Sec. 250.189 and 250.190.
(b) These reporting requirements apply to incidents that occur on
the area covered by your lease, right-of-use and easement, pipeline
right-of-way, or other permit issued by BOEM or BSEE, and that are
related to operations resulting from the exercise of your rights under
your lease, right-of-use and easement, pipeline right-of-way, or permit.
(c) Nothing in this subpart relieves you from making notifications
and reports of incidents that may be required by other regulatory
agencies.
(d) You must report all spills of oil or other liquid pollutants in
accordance with 30 CFR 254.46.
Sec. 250.188 What incidents must I report to BSEE and when
must I report them?
(a) You must report the following incidents to the District Manager
immediately via oral communication, and provide a written follow-up
report (hard copy or electronically transmitted) within 15 calendar days
after the incident:
(1) All fatalities.
(2) All injuries that require the evacuation of the injured
person(s) from the facility to shore or to another offshore facility.
(3) All losses of well control. ``Loss of well control'' means:
(i) Uncontrolled flow of formation or other fluids. The flow may be
to an exposed formation (an underground blowout) or at the surface (a
surface blowout);
(ii) Flow through a diverter; or
(iii) Uncontrolled flow resulting from a failure of surface
equipment or procedures.
(4) All fires and explosions.
(5) All reportable releases of hydrogen sulfide (H2S)
gas, as defined in Sec. 250.490(l).
(6) All collisions that result in property or equipment damage
greater than $25,000. ``Collision'' means the act of a moving vessel
(including an aircraft) striking another vessel, or striking a
stationary vessel or object (e.g., a boat striking a drilling rig or
platform). ``Property or equipment damage'' means the cost of labor and
material to
[[Page 73]]
restore all affected items to their condition before the damage,
including, but not limited to, the OCS facility, a vessel, helicopter,
or equipment. It does not include the cost of salvage, cleaning, gas-
freeing, dry docking, or demurrage.
(7) All incidents involving structural damage to an OCS facility.
``Structural damage'' means damage severe enough so that operations on
the facility cannot continue until repairs are made.
(8) All incidents involving crane or personnel/material handling
operations.
(9) All incidents that damage or disable safety systems or equipment
(including firefighting systems).
(b) You must provide a written report of the following incidents to
the District Manager within 15 calendar days after the incident:
(1) Any injuries that result in one or more days away from work or
one or more days on restricted work or job transfer. One or more days
means the injured person was not able to return to work or to all of
their normal duties the day after the injury occurred;
(2) All gas releases that initiate equipment or process shutdown;
(3) All incidents that require operations personnel on the facility
to muster for evacuation for reasons not related to weather or drills;
(4) All other incidents, not listed in paragraph (a) of this
section, resulting in property or equipment damage greater than $25,000.
(c) On the Arctic OCS, in addition to the requirements of paragraphs
(a) and (b) of this section, you must provide to the BSEE inspector on
location, if one is present, or to the Regional Supervisor, both of the
following:
(1) An immediate oral report if any of the following occur:
(i) Any sea ice movement or condition that has the potential to
affect your operation or trigger ice management activities;
(ii) The start and termination of ice management activities; or
(iii) Any ``kicks'' or operational issues that are unexpected and
could result in the loss of well control.
(2) Within 24 hours after completing ice management activities, a
written report of such activities that conforms to the content
requirements in Sec. 250.190.
[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 46560, July 15, 2016]
Sec. 250.189 Reporting requirements for incidents requiring
immediate notification.
For an incident requiring immediate notification under Sec.
250.188(a), you must notify the District Manager via oral communication
immediately after aiding the injured and stabilizing the situation. Your
oral communication must provide the following information:
(a) Date and time of occurrence;
(b) Operator, and operator representative's, name and telephone
number;
(c) Contractor, and contractor representative's name and telephone
number (if a contractor is involved in the incident or injury/fatality);
(d) Lease number, OCS area, and block;
(e) Platform/facility name and number, or pipeline segment number;
(f) Type of incident or injury/fatality;
(g) Operation or activity at time of incident (i.e., drilling,
production, workover, completion, pipeline, crane, etc.); and
(h) Description of the incident, damage, or injury/fatality.
Sec. 250.190 Reporting requirements for incidents requiring
written notification.
(a) For any incident covered under Sec. 250.188, you must submit a
written report within 15 calendar days after the incident to the
District Manager. The report must contain the following information:
(1) Date and time of occurrence;
(2) Operator, and operator representative's name and telephone
number;
(3) Contractor, and contractor representative's name and telephone
number (if a contractor is involved in the incident or injury);
(4) Lease number, OCS area, and block;
(5) Platform/facility name and number, or pipeline segment number;
(6) Type of incident or injury;
(7) Operation or activity at time of incident (i.e., drilling,
production, workover, completion, pipeline, crane etc.);
[[Page 74]]
(8) Description of incident, damage, or injury (including days away
from work, restricted work or job transfer), and any corrective action
taken; and
(9) Property or equipment damage estimate (in U.S. dollars).
(b) You may submit a report or form prepared for another agency in
lieu of the written report required by paragraph (a) of this section,
provided the report or form contains all required information.
(c) The District Manager may require you to submit additional
information about an incident on a case-by-case basis.
Sec. 250.191 How does BSEE conduct incident investigations?
Any investigation that BSEE conducts under the authority of sections
22(d)(1) and (2) of the Act (43 U.S.C. 1348(d)(1) and (2)) is a fact-
finding proceeding with no adverse parties. The purpose of the
investigation is to prepare a public report that determines the cause or
causes of the incident. The investigation may involve panel meetings
conducted by a chairperson appointed by BSEE. The following requirements
apply to any panel meetings involving persons giving testimony:
(a) A person giving testimony may have legal or other
representative(s) present to provide advice or counsel while the person
is giving testimony. The chairperson may require a verbatim transcript
to be made of all oral testimony. The chairperson also may accept a
sworn written statement in lieu of oral testimony.
(b) Only panel members, and any experts the panel deems necessary,
may address questions to any person giving testimony.
(c) The chairperson may issue subpoenas to persons to appear and
provide testimony or documents at a panel meeting. A subpoena may not
require a person to attend a panel meeting held at a location more than
100 miles from where a subpoena is served.
(d) Any person giving testimony may request compensation for
mileage, and fees for services, within 90 days after the panel meeting.
The compensated expenses must be similar to mileage and fees the U.S.
District Courts allow.
Sec. 250.192 What reports and statistics must I submit relating to
a hurricane, earthquake, or other natural occurrence?
(a) You must submit evacuation statistics to the Regional Supervisor
for a natural occurrence, such as a hurricane, a tropical storm, or an
earthquake. Statistics include facilities and rigs evacuated and the
amount of production shut-in for gas and oil. You must:
(1) Submit the statistics by fax or e-mail (for activities in the
BSEE GOM OCS Region, use Form BSEE-0132) as soon as possible when
evacuation occurs. In lieu of submitting your statistics by fax or e-
mail, you may submit them electronically in accordance with 30 CFR
250.186(a)(3);
(2) Submit the statistics on a daily basis by 11 a.m., as conditions
allow, during the period of shut-in and evacuation;
(3) Inform BSEE when you resume production; and
(4) Submit the statistics either by BSEE district, or the total
figures for your operations in a BSEE region.
(b) If your facility, production equipment, or pipeline is damaged
by a natural occurrence, you must:
(1) Submit an initial damage report to the Regional Supervisor
within 48 hours after you complete your initial evaluation of the
damage. You must use Form BSEE-0143, Facility/Equipment Damage Report,
to make this and all subsequent reports. In lieu of submitting Form
BSEE-0143 by fax or e-mail, you may submit the damage report
electronically in accordance with 30 CFR 250.186(a)(3). In the report,
you must:
(i) Name the items damaged (e.g., platform or other structure,
production equipment, pipeline);
(ii) Describe the damage and assess the extent of the damage (major,
medium, minor); and
(iii) Estimate the time it will take to replace or repair each
damaged structure and piece of equipment and return it to service. The
initial estimate need not be provided on the form until availability of
hardware and repair capability has been established (not to exceed 30
days from your initial report).
[[Page 75]]
(2) Submit subsequent reports monthly and immediately whenever
information submitted in previous reports changes until the damaged
structure or equipment is returned to service. In the final report, you
must provide the date the item was returned to service.
Sec. 250.193 Reports and investigations of possible violations.
(a) Any person may report to BSEE any hazardous or unsafe working
condition on any facility engaged in OCS activities, and any possible
violation or failure to comply with:
(1) Any provision of the Act,
(2) Any provision of a lease, approved plan, or permit issued under
the Act,
(3) Any provision of any regulation or order issued under the Act,
or
(4) Any other Federal law relating to safety of offshore oil and gas
operations.
(b) To make a report under this section, a person is not required to
know whether any legal requirement listed in paragraph (a) of this
section has been violated.
(c) When BSEE receives a report of a possible violation, or when a
BSEE employee detects a possible violation, BSEE will investigate
according to BSEE procedures and notify any other Federal agency(ies)
for further investigation, as appropriate.
(d) BSEE investigations of possible violations may include:
(1) Conducting interviews of personnel;
(2) Requiring the prompt production of documents, data, and other
evidence;
(3) Requiring the preservation of all relevant evidence and access
for BSEE investigators to such evidence; and
(4) Taking other actions and imposing other requirements as
necessary to investigate possible violations and assure an orderly
investigation.
(e)(1) Reports should contain sufficient credible information to
establish a reasonable basis for BSEE to investigate whether a violation
or other hazardous or unsafe working condition exists.
(2) To report hazardous or unsafe working conditions or a possible
violation:
(i) Contact BSEE by:
(A) Phone at 1-877-440-0173 (BSEE Toll-free Safety Hotline),
(B) Internet at www.bsee.gov, or
(C) Mail to: U.S. DOI/BSEE, 1849 C Street NW., Mail Stop 5438,
Washington, DC 20240 Attention: IRU Hotline Operations.
(ii) Include the following items in the report:
(A) Name, address, and telephone number should be provided if you do
not want to remain anonymous;
(B) The specific concern, provision or Federal law, if known,
referenced in (a) that a person violated or with which a person failed
to comply; and
(C) Any other facts, data, and applicable information.
(f) When a possible violation is reported, BSEE will protect a
person's identity to the extent authorized by law.
[78 FR 20439, Apr. 5, 2013, as amended at 81 FR 36149, June 6, 2016]
Sec. 250.194 How must I protect archaeological resources?
(a)-(b) [Reserved]
(c) If you discover any archaeological resource while conducting
operations in the lease or right-of-way area, you must immediately halt
operations within the area of the discovery and report the discovery to
the BSEE Regional Director. If investigations determine that the
resource is significant, the Regional Director will tell you how to
protect it.
Sec. 250.195 What notification does BSEE require on
the production status of wells?
You must notify the appropriate BSEE District Manager when you
successfully complete or recomplete a well for production. You must:
(a) Notify the District Manager within 5 working days of placing the
well in a production status. You must confirm oral notification by
telefax or e-mail within those 5 working days.
(b) Provide the following information in your notification:
(1) Lessee or operator name;
(2) Well number, lease number, and OCS area and block designations;
(3) Date you placed the well on production (indicate whether or not
this is first production on the lease);
[[Page 76]]
(4) Type of production; and
(5) Measured depth of the production interval.
Sec. 250.196 Reimbursements for reproduction and processing costs.
(a) BSEE will reimburse you for costs of reproducing data and
information that the Regional Director requests if:
(1) You deliver geophysical and geological (G&G) data and
information to BSEE for the Regional Director to inspect or select and
retain;
(2) BSEE receives your request for reimbursement and the Regional
Director determines that the requested reimbursement is proper; and
(3) The cost is at your lowest rate or at the lowest commercial rate
established in the area, whichever is less.
(b) BSEE will reimburse you for the costs of processing geophysical
information (that does not include cost of data acquisition):
(1) If, at the request of the Regional Director, you processed the
geophysical data or information in a form or manner other than that used
in the normal conduct of business; or
(2) If you collected the information under a permit that BSEE issued
to you before October 1, 1985, and the Regional Director requests and
retains the information.
(c) When you request reimbursement, you must identify reproduction
and processing costs separately from acquisition costs.
(d) BSEE will not reimburse you for data acquisition costs or for
the costs of analyzing or processing geological information or
interpreting geological or geophysical information.
Sec. 250.197 Data and information to be made available to the public
or for limited inspection.
BSEE will protect data and information that you submit under this
part, and 30 CFR part 203, as described in this section. Paragraphs (a)
and (b) of this section describe what data and information will be made
available to the public without the consent of the lessee, under what
circumstances, and in what time period. Paragraph (c) of this section
describes what data and information will be made available for limited
inspection without the consent of the lessee, and under what
circumstances.
(a) All data and information you submit on BSEE forms will be made
available to the public upon submission, except as specified in the
following table:
------------------------------------------------------------------------
Data and information
not immediately Excepted data will
On form . . . available are . . . be made available .
. .
------------------------------------------------------------------------
(1) BSEE-0123, Application Items 15, 16, 22 When the well goes
for Permit to Drill, through 25, on production or
according to the
table in paragraph
(b) of this
section, whichever
is earlier.
(2) BSEE-0123S, Supplemental Items 3, 7, 8, 15 When the well goes
APD Information Sheet, and 17, on production or
according to the
table in paragraph
(b) of this
section, whichever
is earlier.
(3) BSEE-0124, Application Item 17, When the well goes
for Permit to Modify, on production or
according to the
table in paragraph
(b) of this
section, whichever
is earlier.
(4) BSEE-0125, End of Items 12, 13, 17, When the well goes
Operations Report, 21, 22, 26 through on production or
38, according to the
table in paragraph
(b) of this
section, whichever
is earlier.
However, items 33
through 38 will not
be released when
the well goes on
production unless
the period of time
in the table in
paragraph (b) has
expired.
(5) BSEE-0126, Well Item 101, 2 years after you
Potential Test Report, submit it.
(6) [Reserved]
(7) BSEE-0133 Well Activity Item 10 Fields When the well goes
Report, [WELLBORE START on production or
DATE, TD DATE, OP according to the
STATUS, END DATE, table in paragraph
MD, TVD, AND MW (b) of this
PPG]. Item 11 section, whichever
Fields [WELLBORE is earlier.
START DATE, TD
DATE, PLUGBACK
DATE, FINAL MD, AND
FINAL TVD] and
Items 12 through
15,
(8) BSEE-0133S Open Hole Boxes 7 and 8, When the well goes
Data Report, on production or
according to the
table in paragraph
(b) of this
section, whichever
is earlier.
(9) [Reserved]
[[Page 77]]
(10) [Reserved]
------------------------------------------------------------------------
(b) BSEE will release lease and permit data and information that you
submit and BSEE retains, but that are not normally submitted on BSEE
forms, according to the following table:
------------------------------------------------------------------------
Special
If . . . BSEE will release At this time . . provisions . .
. . . . .
------------------------------------------------------------------------
(1) The Director Geophysical data, At any time, BSEE will
determines that Geological data release data
data and Interpreted G&G and
information are information, information
needed for Processed G&G only if
specific information, release would
scientific or Analyzed further the
research geological National
purposes for the information, interest
Government, without unduly
damaging the
competitive
position of
the lessee.
(2) Data or Geophysical data, 60 days after BSEE will
information is Geological data, BSEE receives release the
collected with Interpreted G&G the data or data and
high-resolution information, information, if information
systems (e.g., Processed the Regional earlier than
bathymetry, side- geological Supervisor deems 60 days if the
scan sonar, information, it necessary, Regional
subbottom Analyzed Supervisor
profiler, and geological determines it
magnetometer) to information, is needed by
comply with affected
safety or States to make
environmental decisions
protection under 30 CFR
requirements, 550, subpart
B. The
Regional
Supervisor
will
reconsider
earlier
release if you
satisfy him/
her that it
would unduly
damage your
competitive
position.
(3) Your lease is Geophysical data, When your lease This release
no longer in Geological data, terminates, time applies
effect, Processed G&G only if the
information provisions in
Interpreted G&G this table
information, governing high-
Analyzed resolution
geological systems and
information, the provisions
in 30 CFR
552.7 do not
apply. The
release time
applies to the
geophysical
data and
information
only if
acquired
postlease for
a lessee's
exclusive use.
(4) Your lease is Geophysical data, 10 years after This release
still in effect, Processed you submit the time applies
geophysical data and only if the
information, information, provisions in
Interpreted G&G this table
information, governing high-
resolution
systems and
the provisions
in 30 CFR
552.7 do not
apply. This
release time
applies to the
geophysical
data and
information
only if
acquired
postlease for
a lessee's
exclusive use.
(5) Your lease is Geological data, 2 years after the These release
still in effect Analyzed required times apply
and within the geological submittal date only if the
primary term information, or 60 days after provisions in
specified in the a lease sale if this table
lease, any portion of governing high-
an offered lease resolution
is within 50 systems and
miles of a well, the provisions
whichever is in 30 CFR
later, 552.7 do not
apply. If the
primary term
specified in
the lease is
extended under
the heading of
``Suspensions'
' in this
subpart, the
extension
applies to
this
provision.
(6) Your lease is Geological data, 2 years after the None.
in effect and Analyzed required
beyond the geological submittal date,
primary term information,
specified in the
lease,
(7) Data or Descriptions of When the well Directional
information is downhole goes on survey data
submitted on locations, production or may be
well operations, operations, and when geological released
equipment, data is released earlier to the
according to owner of an
Sec. Sec. adjacent lease
250.197(b)(5) according to
and (b)(6), Subpart D of
whichever occurs this part.
earlier,
[[Page 78]]
(8) Data and Any data or At any time, None.
information are information
obtained from obtained,
beneath unleased
land as a result
of a well
deviation that
has not been
approved by the
District Manager
or Regional
Supervisor,
(9) Except for G&G data, Geological data None.
high-resolution analyzed and information:
data and geological 10 years after
information information, BOEM issues the
released under processed and permit;
paragraph (b)(2) interpreted G&G Geophysical
of this section information, data: 50 years
data and after BOEM
information issues the
acquired by a permit;
permit under 30 Geophysical
CFR part 551 are information: 25
submitted by a years after BOEM
lessee under 30 issues the
CFR part 203, 30 permit,
CFR part 250, or
30 CFR part 550,
------------------------------------------------------------------------
(c) BSEE may allow limited inspection, but only by persons with a
direct interest in related BSEE decisions and issues in specific
geographic areas, and who agree in writing to its confidentiality, of
G&G data and information submitted under this part or 30 CFR part 203
that BSEE uses to:
(1) Make unitization determinations on two or more leases;
(2) Make competitive reservoir determinations;
(3) Ensure proper plans of development for competitive reservoirs;
(4) Promote operational safety;
(5) Protect the environment;
(6) [Reserved]; or
(7) Determine eligibility for royalty relief.
References
Sec. 250.198 Documents incorporated by reference.
(a) The BSEE is incorporating by reference the documents listed in
paragraphs (e) through (k) of this section. Paragraphs (e) through (k)
identify the publishing organization of the documents, the address and
phone number where you may obtain these documents, and the documents
incorporated by reference. The Director of the Federal Register has
approved the incorporations by reference according to 5 U.S.C. 552(a)
and 1 CFR part 51.
(1) Incorporation by reference of a document is limited to the
edition of the publication that is cited in this section. Future
amendments or revisions of the document are not included. The BSEE will
publish any changes to a document in the Federal Register and amend this
section.
(2) The BSEE may make the rule amending the document effective
without prior opportunity for public comment when BSEE determines:
(i) That the revisions to a document result in safety improvements
or represent new industry standard technology and do not impose undue
costs on the affected parties; and
(ii) The BSEE meets the requirements for making a rule immediately
effective under 5 U.S.C. 553.
(3) The effect of incorporation by reference of a document into the
regulations in this part is that the incorporated document is a
requirement. When a section in this part incorporates all of a document,
you are responsible for complying with the provisions of that entire
document, except to the extent that the section which incorporates the
document by reference provides otherwise. When a section in this part
incorporates part of a document, you are responsible for complying with
that part of the document as provided in that section.
(b) The BSEE incorporated each document or specific portion by
reference in the sections noted. The entire document is incorporated by
reference, unless the text of the corresponding sections in this part
calls for compliance with specific portions of the listed documents. In
each instance, the applicable document is the specific edition or
specific edition and supplement or addendum cited in this section.
(c) Under Sec. Sec. 250.141 and 250.142, you may comply with a
later edition of a
[[Page 79]]
specific document incorporated by reference, provided:
(1) You show that complying with the later edition provides a degree
of protection, safety, or performance equal to or better than would be
achieved by compliance with the listed edition; and
(2) You obtain the prior written approval for alternative compliance
from the authorized BSEE official.
(d) You may inspect these documents at the Bureau of Safety and
Environmental Enforcement, 45600 Woodland Rd, Sterling, VA 20166; phone:
1-844-259-4779; or at the National Archives and Records Administration
(NARA). For information on the availability of this material at NARA,
call 202-741-6030, or go to: http://www.archives.gov/federal_register/
code_of_ federal_regulations/ibr_locations.html.
(e) American Concrete Institute (ACI), ACI Standards, 38800 Country
Club Drive, Farmington Hills, MI 48331-3439: http://www.concrete.org;
phone: 248-848-3700:
(1) ACI Standard 318-95, Building Code Requirements for Reinforced
Concrete (ACI 318-95), incorporated by reference at Sec. 250.901.
(2) ACI 318R-95, Commentary on Building Code Requirements for
Reinforced Concrete, incorporated by reference at Sec. 250.901.
(3) ACI 357R-84, Guide for the Design and Construction of Fixed
Offshore Concrete Structures, 1984; reapproved 1997, incorporated by
reference at Sec. 250.901.
(f) American Institute of Steel Construction, Inc. (AISC), AISC
Standards, One East Wacker Drive, Suite 700, Chicago, IL 60601-1802;
http://www.aisc.org; phone: 312-670-2400:
(1) ANSI/AISC 360-05, Specification for Structural Steel Buildings
incorporated by reference at Sec. 250.901.
(2) [Reserved]
(g) American National Standards Institute (ANSI), ANSI/ASME Codes,
http://www.webstore.ansi.org; phone: 212-642-4900; and/or American
Society of Mechanical Engineers (ASME), 22 Law Drive, P.O. Box 2900,
Fairfield, NJ 07007-2900; http://www.asme.org; phone: 1-800-843-2763:
(1) ANSI/ASME Boiler and Pressure Vessel Code, Section I, Rules for
Construction of Power Boilers; including Appendices, 2004 Edition; and
July 1, 2005 Addenda, and all Section I Interpretations Volume 55,
incorporated by reference at Sec. Sec. 250.851(a) and 250.1629(b).
(2) ANSI/ASME Boiler and Pressure Vessel Code, Section IV, Rules for
Construction of Heating Boilers; including Appendices 1, 2, 3, 5, 6, and
Non-mandatory Appendices B, C, D, E, F, H, I, K, L, and M, and the Guide
to Manufacturers Data Report Forms, 2004 Edition; July 1, 2005 Addenda,
and all Section IV Interpretations Volume 55, incorporated by reference
at Sec. Sec. 250.851(a) and 250.1629(b).
(3) ANSI/ASME Boiler and Pressure Vessel Code, Section VIII, Rules
for Construction of Pressure Vessels; Divisions 1 and 2, 2004 Edition;
July 1, 2005 Addenda, Divisions 1, 2, and 3 and all Section VIII
Interpretations Volumes 54 and 55, incorporated by reference at
Sec. Sec. 250.851(a) and 250.1629(b).
(4) ANSI/ASME B 16.5-2003, Pipe Flanges and Flanged Fittings
incorporated by reference at Sec. 250.1002;
(5) ANSI/ASME B 31.8-2003, Gas Transmission and Distribution Piping
Systems incorporated by reference at Sec. 250.1002;
(6) ANSI Z88.2-1992, American National Standard for Respiratory
Protection, incorporated by reference at, Sec. 250.490.
(h) American Petroleum Institute (API), API Recommended Practices
(RP), Specs, Standards, Manual of Petroleum Measurement Standards (MPMS)
chapters, 1220 L Street, NW., Washington, DC 20005-4070; http://
www.api.org; phone: 202-682-8000:
(1) API 510, Pressure Vessel Inspection Code: In-Service Inspection,
Rating, Repair, and Alteration, Downstream Segment, Ninth Edition, June
2006; incorporated by reference at Sec. Sec. 250.851(a) and
250.1629(b);
(2) API Bulletin 2INT-DG, Interim Guidance for Design of Offshore
Structures for Hurricane Conditions, May 2007; incorporated by reference
at Sec. 250.901;
(3) API Bulletin 2INT-EX, Interim Guidance for Assessment of
Existing Offshore Structures for Hurricane Conditions, May 2007;
incorporated by reference at Sec. 250.901;
(4) API Bulletin 2INT-MET, Interim Guidance on Hurricane Conditions
in
[[Page 80]]
the Gulf of Mexico, May 2007; incorporated by reference at Sec.
250.901;
(5) API MPMS, Chapter 1--Vocabulary, Second Edition, July 1994;
incorporated by reference at Sec. 250.1201;
(6) API MPMS, Chapter 2--Tank Calibration, Section 2A--Measurement
and Calibration of Upright Cylindrical Tanks by the Manual Tank
Strapping Method, First Edition, February 1995; reaffirmed February
2007; incorporated by reference at Sec. 250.1202;
(7) API MPMS, Chapter 2--Tank Calibration, Section 2B--Calibration
of Upright Cylindrical Tanks Using the Optical Reference Line Method,
First Edition, March 1989; reaffirmed, December 2007; incorporated by
reference at Sec. 250.1202;
(8) API MPMS, Chapter 3--Tank Gauging, Section 1A--Standard Practice
for the Manual Gauging of Petroleum and Petroleum Products, Second
Edition, August 2005; incorporated by reference at Sec. 250.1202;
(9) API MPMS, Chapter 3--Tank Gauging, Section 1B--Standard Practice
for Level Measurement of Liquid Hydrocarbons in Stationary Tanks by
Automatic Tank Gauging, Second Edition, June 2001, reaffirmed, October
2006; incorporated by reference at Sec. 250.1202;
(10) API MPMS, Chapter 4--Proving Systems, Section 1--Introduction,
Third Edition, February 2005; incorporated by reference at Sec.
250.1202;
(11) API MPMS, Chapter 4--Proving Systems, Section 2--Displacement
Provers, Third Edition, September 2003; incorporated by reference at
Sec. 250.1202;
(12) API MPMS, Chapter 4--Proving Systems, Section 4--Tank Provers,
Second Edition, May 1998, reaffirmed November 2005; incorporated by
reference at Sec. 250.1202;
(13) API MPMS, Chapter 4--Proving Systems, Section 5--Master-Meter
Provers, Second Edition, May 2000, reaffirmed: August 2005; incorporated
by reference at Sec. 250.1202;
(14) API MPMS, Chapter 4--Proving Systems, Section 6--Pulse
Interpolation, Second Edition, May 1999; reaffirmed 2003; incorporated
by reference at Sec. 250.1202;
(15) API MPMS, Chapter 4--Proving Systems, Section 7--Field Standard
Test Measures, Second Edition, December 1998; reaffirmed 2003;
incorporated by reference at Sec. 250.1202;
(16) API MPMS, Chapter 5--Metering, Section 1--General
Considerations for Measurement by Meters, Fourth Edition, September
2005; incorporated by reference at Sec. 250.1202;
(17) API MPMS, Chapter 5--Metering, Section 2--Measurement of Liquid
Hydrocarbons by Displacement Meters, Third Edition, September 2005;
incorporated by reference at Sec. 250.1202;
(18) API MPMS Chapter 5--Metering, Section 3--Measurement of Liquid
Hydrocarbons by Turbine Meters, Fifth Edition, September 2005;
incorporated by reference at Sec. 250.1202;
(19) API MPMS, Chapter 5--Metering, Section 4--Accessory Equipment
for Liquid Meters, Fourth Edition, September 2005; incorporated by
reference at Sec. 250.1202;
(20) API MPMS, Chapter 5--Metering, Section 5--Fidelity and Security
of Flow Measurement Pulsed-Data Transmission Systems, Second Edition,
August 2005; incorporated by reference at Sec. 250.1202;
(21) API MPMS, Chapter 6--Metering Assemblies, Section 1--Lease
Automatic Custody Transfer (LACT) Systems, Second Edition, May 1991;
reaffirmed, April 2007; incorporated by reference at Sec. 250.1202;
(22) API MPMS, Chapter 6--Metering Assemblies, Section 6--Pipeline
Metering Systems, Second Edition, May 1991; reaffirmed, February 2007;
incorporated by reference at Sec. 250.1202;
(23) API MPMS, Chapter 6--Metering Assemblies, Section 7--Metering
Viscous Hydrocarbons, Second Edition, May 1991; reaffirmed, April 2007;
incorporated by reference at Sec. 250.1202;
(24) API MPMS, Chapter 7--Temperature Determination, First Edition,
June 2001; reaffirmed, March 2007; incorporated by reference at Sec.
250.1202;
(25) API MPMS, Chapter 8--Sampling, Section 1--Standard Practice for
Manual Sampling of Petroleum and Petroleum Products, Third Edition,
October 1995; reaffirmed, March 2006; incorporated by reference at Sec.
250.1202;
(26) API MPMS, Chapter 8--Sampling, Section 2--Standard Practice for
Automatic Sampling of Liquid Petroleum and Petroleum Products, Second
Edition, October 1995; reaffirmed, June
[[Page 81]]
2005; incorporated by reference at Sec. 250.1202;
(27) API MPMS, Chapter 9--Density Determination, Section 1--Standard
Test Method for Density, Relative Density (Specific Gravity), or API
Gravity of Crude Petroleum and Liquid Petroleum Products by Hydrometer
Method, Second Edition, December 2002; reaffirmed October 2005;
incorporated by reference at Sec. 250.1202(a)(3) and (l)(4);
(28) API MPMS, Chapter 9--Density Determination, Section 2--Standard
Test Method for Density or Relative Density of Light Hydrocarbons by
Pressure Hydrometer, Second Edition, March 2003; incorporated by
reference at Sec. 250.1202;
(29) API MPMS, Chapter 10--Sediment and Water, Section 1--Standard
Test Method for Sediment in Crude Oils and Fuel Oils by the Extraction
Method, Third Edition, November 2007; incorporated by reference at Sec.
250.1202;
(30) API MPMS, Chapter 10--Sediment and Water, Section 2--Standard
Test Method for Water in Crude Oil by Distillation, Second Edition,
November 2007; incorporated by reference at Sec. 250.1202;
(31) API MPMS, Chapter 10--Sediment and Water, Section 3--Standard
Test Method for Water and Sediment in Crude Oil by the Centrifuge Method
(Laboratory Procedure), Third Edition, May 2008; incorporated by
reference at Sec. 250.1202;
(32) API MPMS, Chapter 10--Sediment and Water, Section 4--
Determination of Water and/or Sediment in Crude Oil by the Centrifuge
Method (Field Procedure), Third Edition, December 1999; incorporated by
reference at Sec. 250.1202;
(33) API MPMS, Chapter 10--Sediment and Water, Section 9--Standard
Test Method for Water in Crude Oils by Coulometric Karl Fischer
Titration, Second Edition, December 2002; reaffirmed 2005; incorporated
by reference at Sec. 250.1202;
(34) API MPMS, Chapter 11.1--Volume Correction Factors, Volume 1,
Table 5A--Generalized Crude Oils and JP-4 Correction of Observed API
Gravity to API Gravity at 60 [deg]F, and Table 6A--Generalized Crude
Oils and JP-4 Correction of Volume to 60 [deg]F Against API Gravity at
60 [deg]F, API Standard 2540, First Edition, August 1980; reaffirmed
March 1997; incorporated by reference at Sec. 250.1202;
(35) API MPMS, Chapter 11.2.2--Compressibility Factors for
Hydrocarbons: 0.350-0.637 Relative Density (60 [deg]F/60 [deg]F) and -50
[deg]F to 140 [deg]F Metering Temperature, Second Edition, October 1986;
reaffirmed: December 2007; incorporated by reference at Sec. 250.1202;
(36) API MPMS, Chapter 11--Physical Properties Data, Addendum to
Section 2, Part 2--Compressibility Factors for Hydrocarbons, Correlation
of Vapor Pressure for Commercial Natural Gas Liquids, First Edition,
December 1994; reaffirmed, December 2002; incorporated by reference at
Sec. 250.1202;
(37) API MPMS, Chapter 12--Calculation of Petroleum Quantities,
Section 2--Calculation of Petroleum Quantities Using Dynamic Measurement
Methods and Volumetric Correction Factors, Part 1--Introduction, Second
Edition, May 1995; reaffirmed March 2002; incorporated by reference at
Sec. 250.1202;
(38) API MPMS, Chapter 12--Calculation of Petroleum Quantities,
Section 2--Calculation of Petroleum Quantities Using Dynamic Measurement
Methods and Volumetric Correction Factors, Part 2--Measurement Tickets,
Third Edition, June 2003; incorporated by reference at Sec. 250.1202;
(39) API MPMS, Chapter 14--Natural Gas Fluids Measurement, Section
3--Concentric, Square-Edged Orifice Meters, Part 1--General Equations
and Uncertainty Guidelines, Third Edition, September 1990; reaffirmed
January 2003; incorporated by reference at Sec. 250.1203;
(40) API MPMS, Chapter 14--Natural Gas Fluids Measurement, Section
3--Concentric, Square-Edged Orifice Meters, Part 2--Specification and
Installation Requirements, Fourth Edition, April 2000; reaffirmed March
2006; incorporated by reference at Sec. 250.1203;
(41) API MPMS, Chapter 14--Natural Gas Fluids Measurement, Section
3--Concentric, Square-Edged Orifice Meters; Part 3--Natural Gas
Applications; Third Edition, August 1992; Errata March 1994, reaffirmed,
February 2009; incorporated by reference at Sec. 250.1203;
(42) API MPMS, Chapter 14.5/GPA Standard 2172-09; Calculation of
Gross
[[Page 82]]
Heating Value, Relative Density, Compressibility and Theoretical
Hydrocarbon Liquid Content for Natural Gas Mixtures for Custody
Transfer; Third Edition, January 2009; incorporated by reference at
Sec. 250.1203;
(43) API MPMS, Chapter 14--Natural Gas Fluids Measurement, Section
6--Continuous Density Measurement, Second Edition, April 1991;
reaffirmed, February 2006; incorporated by reference at Sec. 250.1203;
(44) API MPMS, Chapter 14--Natural Gas Fluids Measurement, Section
8--Liquefied Petroleum Gas Measurement, Second Edition, July 1997;
reaffirmed, March 2006; incorporated by reference at Sec. 250.1203;
(45) API MPMS, Chapter 20--Section 1--Allocation Measurement, First
Edition, September 1993; reaffirmed October 2006; incorporated by
reference at Sec. 250.1202;
(46) API MPMS, Chapter 21--Flow Measurement Using Electronic
Metering Systems, Section 1--Electronic Gas Measurement, First Edition,
August 1993; reaffirmed, July 2005; incorporated by reference at Sec.
250.1203;
(47) API RP 2A-WSD, Recommended Practice for Planning, Designing and
Constructing Fixed Offshore Platforms--Working Stress Design, Twenty-
first Edition, December 2000; Errata and Supplement 1, December 2002;
Errata and Supplement 2, September 2005; Errata and Supplement 3,
October 2007; incorporated by reference at Sec. Sec. 250.901, 250.908,
250.919, and 250.920;
(48) API RP 2D, Operation and Maintenance of Offshore Cranes, Sixth
Edition, May 2007; incorporated by reference at Sec. 250.108;
(49) API RP 2FPS, RP for Planning, Designing, and Constructing
Floating Production Systems; First Edition, March 2001; incorporated by
reference at Sec. 250.901;
(50) API RP 2I, In-Service Inspection of Mooring Hardware for
Floating Structures; Third Edition, April 2008; incorporated by
reference at Sec. 250.901(a) and (d);
(51) API RP 2RD, Recommended Practice for Design of Risers for
Floating Production Systems (FPSs) and Tension-Leg Platforms (TLPs),
First Edition, June 1998; reaffirmed, May 2006, Errata, June 2009;
incorporated by reference at Sec. Sec. 250.292, 250.733, 250.800(c),
250.901(a), (d), and 250.1002(b);
(52) API RP 2SK, Recommended Practice for Design and Analysis of
Stationkeeping Systems for Floating Structures, Third Edition, October
2005, Addendum, May 2008; incorporated by reference at Sec. Sec.
250.800(c) and 250.901(a), (d);
(53) API RP 2SM, Recommended Practice for Design, Manufacture,
Installation, and Maintenance of Synthetic Fiber Ropes for Offshore
Mooring, First Edition, March 2001, Addendum, May 2007; incorporated by
reference at Sec. Sec. 250.800(c) and 250.901;
(54) API RP 2T, Recommended Practice for Planning, Designing, and
Constructing Tension Leg Platforms, Second Edition, August 1997;
incorporated by reference at Sec. 250.901;
(55) ANSI/API RP 14B, Recommended Practice for Design, Installation,
Repair and Operation of Subsurface Safety Valve Systems, Fifth Edition,
October 2005; incorporated by reference at Sec. Sec. 250.802(b),
250.803(a), 250.814(d), 250.828(c), and 250.880(c);
(56) API RP 14C, Recommended Practice for Analysis, Design,
Installation, and Testing of Basic Surface Safety Systems for Offshore
Production Platforms, Seventh Edition, March 2001, Reaffirmed: March
2007; incorporated by reference at Sec. Sec. 250.125(a), 250.292(j),
250.841(a), 250.842(a), 250.850, 250.852(a), 250.855, 250.856(a),
250.858(a), 250.862(e), 250.865(a), 250.867(a), 250.869(a) through (c),
250.872(a), 250.873(a), 250.874(a), 250.880(b) and (c), 250.1002(d),
250.1004(b), 250.1628(c) and (d), 250.1629(b), and 250.1630(a);
(57) API RP 14E, Recommended Practice for Design and Installation of
Offshore Production Platform Piping Systems, Fifth Edition, October
1991; Reaffirmed, January 2013; incorporated by reference at Sec. Sec.
250.841(b), 250.842(a), and 250.1628(b) and (d);
(58) API RP 14F, Recommended Practice for Design, Installation, and
Maintenance of Electrical Systems for Fixed and Floating Offshore
Petroleum Facilities for Unclassified and Class 1, Division 1 and
Division 2 Locations, Upstream Segment, Fifth Edition, July 2008,
Reaffirmed: April 2013; incorporated by reference at Sec. Sec.
250.114(c), 250.842(b), 250.862(e), and 250.1629(b);
[[Page 83]]
(59) API RP 14FZ, Recommended Practice for Design and Installation
of Electrical Systems for Fixed and Floating Offshore Petroleum
Facilities for Unclassified and Class I, Zone 0, Zone 1 and Zone 2
Locations, First Edition, September 2001, Reaffirmed: March 2007;
incorporated by reference at Sec. Sec. 250.114(c), 250.842(b),
250.862(e), and 250.1629(b);
(60) API RP 14G, Recommended Practice for Fire Prevention and
Control on Fixed Open-type Offshore Production Platforms, Fourth
Edition, April 2007; incorporated by reference at Sec. Sec. 250.859(a),
250.862(e), 250.880(c), and 250.1629(b);
(61) API RP 14H, Recommended Practice for Installation, Maintenance
and Repair of Surface Safety Valves and Underwater Safety Valves
Offshore, Fifth Edition, August 2007; incorporated by reference at
Sec. Sec. 250.820, 250.834, 250.836, and 250.880(c);
(62) API RP 14J, Recommended Practice for Design and Hazards
Analysis for Offshore Production Facilities, Second Edition, May 2001;
Reaffirmed: January 2013; incorporated by reference at Sec. Sec.
250.800(b) and (c), 250.842(b), and 250.901(a);
(63) API Standard 53, Blowout Prevention Equipment Systems for
Drilling Wells, Fourth Edition, November 2012, incorporated by reference
at Sec. Sec. 250.730, 250.735, 250.737, and 250.739;
(64) API RP 65, Recommended Practice for Cementing Shallow Water
Flow Zones in Deepwater Wells, First Edition, September 2002;
incorporated by reference at Sec. 250.415;
(65) API RP 500, Recommended Practice for Classification of
Locations for Electrical Installations at Petroleum Facilities
Classified as Class I, Division 1 and Division 2, Second Edition,
November 1997; Errata (August 17, 1998), Reaffirmed November 2002;
incorporated by reference at Sec. Sec. 250.114(a), 250.459, 250.842(a),
250.862(a) and (e), 250.872(a), 250.1628(b) and (d), and 250.1629(b);
(66) API RP 505, Recommended Practice for Classification of
Locations for Electrical Installations at Petroleum Facilities
Classified as Class I, Zone 0, Zone 1, and Zone 2, First Edition,
November 1997; Reaffirmed, August 2013; incorporated by reference at
Sec. Sec. 250.114(a), 250.459, 250.842(a), 250.862(a) and (e),
250.872(a), 250.1628(b) and (d), and 250.1629(b);
(67) API RP 2556, Recommended Practice for Correcting Gauge Tables
for Incrustation, Second Edition, August 1993; reaffirmed November 2003;
incorporated by reference at Sec. 250.1202;
(68) ANSI/API Specification Q1 (ANSI/API Spec. Q1), Specification
for Quality Programs for the Petroleum, Petrochemical and Natural Gas
Industry, Eighth Edition, December 2007, Addendum 1, June 2010;
incorporated by reference at Sec. Sec. 250.730, 250.801(b) and (c);
(69) API Spec. 2C, Specification for Offshore Pedestal Mounted
Cranes, Sixth Edition, March 2004, Effective Date: September 2004;
incorporated by reference at Sec. 250.108;
(70) ANSI/API Specification 6A (ANSI/API Spec. 6A), Specification
for Wellhead and Christmas Tree Equipment, Nineteenth Edition, July
2004; Errata 1 (September 2004), Errata 2 (April 2005), Errata 3 (June
2006) Errata 4 (August 2007), Errata 5 (May 2009), Addendum 1 (February
2008), Addenda 2, 3, and 4 (December 2008); incorporated by reference at
Sec. Sec. 250.730, 250.802(a), 250.803(a), 250.833, 250.873(b),
250.874(g), and 250.1002(b);
(71) API Spec. 6AV1, Specification for Verification Test of Wellhead
Surface Safety Valves and Underwater Safety Valves for Offshore Service,
First Edition, February 1, 1996; reaffirmed April 2008; incorporated by
reference at Sec. Sec. 250.802(a), 250.833, 250.873(b), and 250.874(g);
(72) ANSI/API Spec. 6D, Specification for Pipeline Valves, Twenty-
third Edition, April 2008; Effective Date: October 1, 2008, Errata 1,
June 2008; Errata 2, November 2008; Errata 3, February 2009; Addendum 1,
October 2009; Contains API Monogram Annex as Part of U.S. National
Adoption; ISO 14313:2007 (Identical), Petroleum and natural gas
industries--Pipeline transportation systems--Pipeline valves;
incorporated by reference at Sec. 250.1002;
(73) ANSI/API Spec. 14A, Specification for Subsurface Safety Valve
Equipment, Eleventh Edition, October 2005, Reaffirmed, June 2012;
incorporated by reference at Sec. Sec. 250.802(b) and 250.803(a);
[[Page 84]]
(74) ANSI/API Spec. 17J, Specification for Unbonded Flexible Pipe,
Third Edition, July 2008, incorporated by reference at Sec. Sec.
250.852(e), 250.1002(b), and 250.1007(a).
(75) API Standard 2552, USA Standard Method for Measurement and
Calibration of Spheres and Spheroids, First Edition, 1966; reaffirmed,
October 2007; incorporated by reference at Sec. 250.1202;
(76) API Standard 2555, Method for Liquid Calibration of Tanks,
First Edition, September 1966; reaffirmed March 2002; incorporated by
reference at Sec. 250.1202;
(77) API RP 90, Annular Casing Pressure Management for Offshore
Wells, First Edition, August 2006, incorporated by reference at Sec.
250.518;
(78) API Standard 65--Part 2, Isolating Potential Flow Zones During
Well Construction; Second Edition, December 2010; incorporated by
reference at Sec. 250.415(f);
(79) API RP 75, Recommended Practice for Development of a Safety and
Environmental Management Program for Offshore Operations and Facilities,
Third Edition, May 2004, Reaffirmed May 2008; incorporated by reference
at Sec. Sec. 250.1900, 250.1902, 250.1903, 250.1909, 250.1920;
(80) API Manual of Petroleum Measurement Standards (MPMS) Chapter
4--Proving Systems, Section 8--Operation of Proving Systems; First
Edition, reaffirmed March 2007; incorporated by reference at Sec.
250.1202(a)(2), (a)(3), (f)(1), and (g);
(81) API Manual of Petroleum Measurement Standards (MPMS) Chapter
5--Metering, Section 6--Measurement of Liquid Hydrocarbons by Coriolis
Meters; First Edition, reaffirmed March 2008; incorporated by reference
at Sec. 250.1202(a)(2) and (3);
(82) API Manual of Petroleum Measurement Standards (MPMS) Chapter
5--Metering, Section 8--Measurement of Liquid Hydrocarbons by Ultrasonic
Flow Meters Using Transit Time Technology; First Edition, February 2005;
incorporated by reference at Sec. 250.1202(a)(2) and (3);
(83) API Manual of Petroleum Measurement Standards (MPMS) Chapter
11--Physical Properties Data, Section 1--Temperature and Pressure Volume
Correction Factors for Generalized Crude Oils, Refined Products, and
Lubricating Oils; May 2004, (incorporating Addendum 1, September 2007);
incorporated by reference at Sec. 250.1202(a)(2), (a)(3), (g), and
(l)(4);
(84) API Manual of Petroleum Measurement Standards (MPMS) Chapter
12--Calculation of Petroleum Quantities, Section 2--Calculation of
Petroleum Quantities Using Dynamic Measurement Methods and Volumetric
Correction Factors, Part 3--Proving Reports; First Edition, reaffirmed
2009; incorporated by reference at Sec. 250.1202(a)(2), (a)(3), and
(g);
(85) API Manual of Petroleum Measurement Standards (MPMS) Chapter
12--Calculation of Petroleum Quantities, Section 2--Calculation of
Petroleum Quantities Using Dynamic Measurement Methods and Volumetric
Correction Factors, Part 4--Calculation of Base Prover Volumes by the
Waterdraw Method, First Edition, reaffirmed 2009; incorporated by
reference at Sec. 250.1202(a)(2), (a)(3), (f)(1), and (g);
(86) API Manual of Petroleum Measurement Standards (MPMS) Chapter
21--Flow Measurement Using Electronic Metering Systems, Section 2--
Electronic Liquid Volume Measurement Using Positive Displacement and
Turbine Meters; First Edition, June 1998; incorporated by reference at
Sec. 250.1202(a)(2);
(87) API Manual of Petroleum Measurement Standards Chapter 21--Flow
Measurement Using Electronic Metering Systems, Addendum to Section 2--
Flow Measurement Using Electronic Metering Systems, Inferred Mass; First
Edition, reaffirmed February 2006; incorporated by reference at Sec.
250.1202(a)(2);
(88) API RP 86, API Recommended Practice for Measurement of
Multiphase Flow; First Edition, September 2005; incorporated by
reference at Sec. 250.1202(a)(2), (a)(3), and Sec. 250.1203(b)(2);
(89) ANSI/API Specification 11D1, Packers and Bridge Plugs, Second
Edition, July 2009, incorporated by reference at Sec. Sec. 250.518,
250.619, and 250.1703;
(90) ANSI/API Specification 16A, Specification for Drill-through
Equipment, Third Edition, June 2004, Reaffirmed August 2010,
incorporated by reference at Sec. 250.730;
[[Page 85]]
(91) ANSI/API Specification 16C, Specification for Choke and Kill
Systems, First Edition, January 1993, Reaffirmed July 2010; incorporated
by reference at Sec. 250.730;
(92) API Specification 16D, Specification for Control Systems for
Drilling Well Control Equipment and Control Systems for Diverter
Equipment, Second Edition, July 2004, Reaffirmed August 2013,
incorporated by reference at Sec. 250.730;
(93) ANSI/API Specification 17D, Design and Operation of Subsea
Production Systems--Subsea Wellhead and Tree Equipment, Second Edition,
May 2011, incorporated by reference at Sec. 250.730;
(94) ANSI/API Recommended Practice 17H, Remotely Operated Vehicle
Interfaces on Subsea Production Systems, First Edition, July 2004,
Reaffirmed January 2009, incorporated by reference at Sec. 250.734;
(95) ANSI/API RP 2N, Third Edition, ``Recommended Practice for
Planning, Designing, and Constructing Structures and Pipelines for
Arctic Conditions'', Third Edition, April 2015; incorporated by
reference at Sec. 250.470(g); and
(96) API 570 Piping Inspection Code: In-service Inspection, Rating,
Repair, and Alteration of Piping Systems, Third Edition, November 2009;
incorporated by reference at Sec. 250.841(b).
(i) American Society for Testing and Materials (ASTM), ASTM
Standards, 100 Bar Harbor Drive, P.O. Box C700, West Conshohocken, PA
19428-2959; http://www.astm.org; phone: 1-877-909-2786:
(1) ASTM Standard C 33-07, approved December 15, 2007, Standard
Specification for Concrete Aggregates; incorporated by reference at
Sec. 250.901;
(2) ASTM Standard C 94/C 94M-07, approved January 1, 2007, Standard
Specification for Ready-Mixed Concrete; incorporated by reference at
Sec. 250.901;
(3) ASTM Standard C 150-07, approved May 1, 2007, Standard
Specification for Portland Cement; incorporated by reference at Sec.
250.901;
(4) ASTM Standard C 330-05, approved December 15, 2005, Standard
Specification for Lightweight Aggregates for Structural Concrete;
incorporated by reference at Sec. 250.901;
(5) ASTM Standard C 595-08, approved January 1, 2008, Standard
Specification for Blended Hydraulic Cements; incorporated by reference
at Sec. 250.901;
(j) American Welding Society (AWS), AWS Codes, 8669 NW 36 Street,
130, Miami, FL 33126; http://www.aws.org; phone: 800-443-9353:
(1) AWS D1.1:2000, Structural Welding Code--Steel, 17th Edition,
October 18, 1999; incorporated by reference at Sec. 250.901;
(2) AWS D1.4-98, Structural Welding Code--Reinforcing Steel, 1998
Edition; incorporated by reference at Sec. 250.901;
(3) AWS D3.6M:1999, Specification for Underwater Welding (1999);
incorporated by reference at Sec. 250.901.
(k) National Association of Corrosion Engineers (NACE)
International, NACE Standards, Park Ten Place, Houston, TX 77084; http:/
/www.nace.org; phone: 281-228-6200:
(1) NACE Standard MR0175-2003, Standard Material Requirements,
Metals for Sulfide Stress Cracking and Stress Corrosion Cracking
Resistance in Sour Oilfield Environments, Revised January 17, 2003;
incorporated by reference at Sec. Sec. 250.901 and 250.490;
(2) NACE Standard RP0176-2003, Standard Recommended Practice,
Corrosion Control of Steel Fixed Offshore Structures Associated with
Petroleum Production; incorporated by reference at Sec. 250.901.
(l) American Gas Association (AGA Reports), 400 North Capitol
Street, NW., Suite 450, Washington, DC 20001, http://www.aga.org; phone:
202-824-7000;
(1) AGA Report No. 7--Measurement of Natural Gas by Turbine Meters;
Revised February 2006; incorporated by reference at Sec.
250.1203(b)(2);
(2) AGA Report No. 9--Measurement of Gas by Multipath Ultrasonic
Meters; Second Edition, April 2007; incorporated by reference at Sec.
250.1203(b)(2);
(3) AGA Report No. 10--Speed of Sound in Natural Gas and Other
Related Hydrocarbon Gases; Copyright 2003; incorporated by reference at
Sec. 250.1203(b)(2).
(m) International Organization for Standardization (ISO), 1, ch. de
la Voie-Creuse, CP 56, CH-1211, Geneva 20, Switzerland; www.iso.org;
phone: 41-22-749-01-11:
[[Page 86]]
(1) ISO/IEC (International Electrotechnical Commission) 17011,
Conformity assessment--General requirements for accreditation bodies
accrediting conformity assessment bodies, First edition 2004-09-01;
Corrected version 2005-02-15; incorporated by reference at Sec. Sec.
250.1900, 250.1903, 250.1904, and 250.1922.
(2) [Reserved]
(n) Center for Offshore Safety (COS), 1990 Post Oak Blvd., Suite
1370, Houston, TX 77056; www.centerforoffshoresafety.org; phone: 832-
495-4925.
(1) COS Safety Publication COS-2-01, Qualification and Competence
Requirements for Audit Teams and Auditors Performing Third-party SEMS
Audits of Deepwater Operations, First Edition, Effective Date October
2012; incorporated by reference at Sec. Sec. 250.1900, 250.1903,
250.1904, and 250.1921.
(2) COS Safety Publication COS-2-03, Requirements for Third-party
SEMS Auditing and Certification of Deepwater Operations, First Edition,
Effective Date October 2012; incorporated by reference at Sec. Sec.
250.1900, 250.1903, 250.1904, and 250.1920.
(3) COS Safety Publication COS-2-04, Requirements for Accreditation
of Audit Service Providers Performing SEMS Audits and Certification of
Deepwater Operations, First Edition, Effective Date October 2012;
incorporated by reference at Sec. Sec. 250.1900, 250.1903, 250.1904,
and 250.1922.
[76 FR 64462, Oct. 18, 2011, as amended at 77 FR 18921, Mar. 29, 2012;
77 FR 50891, Aug. 22, 2012; 78 FR 20440, Apr. 5, 2013; 81 FR 26015, Apr.
29, 2016; 81 FR 36149, June 6, 2016; 81 FR 46560, July 15, 2016; 81 FR
61917, Sept. 7, 2016]
Sec. 250.199 Paperwork Reduction Act statements--information collection.
(a) OMB has approved the information collection requirements in part
250 under 44 U.S.C. 3501 et seq. The table in paragraph (e) of this
section lists the subpart in the rule requiring the information and its
title, provides the OMB control number, and summarizes the reasons for
collecting the information and how BSEE uses the information. The
associated BSEE forms required by this part are listed at the end of
this table with the relevant information.
(b) Respondents are OCS oil, gas, and sulphur lessees and operators.
The requirement to respond to the information collections in this part
is mandated under the Act (43 U.S.C. 1331 et seq.) and the Act's
Amendments of 1978 (43 U.S.C. 1801 et seq.). Some responses are also
required to obtain or retain a benefit or may be voluntary. Proprietary
information will be protected under Sec. 250.197, Data and information
to be made available to the public or for limited inspection; parts 30
CFR Parts 251, 252; and the Freedom of Information Act (5 U.S.C. 552)
and its implementing regulations at 43 CFR part 2.
(c) The Paperwork Reduction Act of 1995 requires us to inform the
public that an agency may not conduct or sponsor, and you are not
required to respond to, a collection of information unless it displays a
currently valid OMB control number.
(d) Send comments regarding any aspect of the collections of
information under this part, including suggestions for reducing the
burden, to the Information Collection Clearance Officer, Bureau of
Safety and Environmental Enforcement, 45600 Woodland Road, Sterling, VA
20166.
(e) BSEE is collecting this information for the reasons given in the
following table:
------------------------------------------------------------------------
30 CFR Subpart, title and/or BSEE Form BSEE collects this information
(OMB Control No.) and uses it to:
------------------------------------------------------------------------
(1) Subpart A, General (1014-0022), (i) Determine that activities
including Forms BSEE-0011, iSEE; BSEE- on the OCS comply with
0132, Evacuation Statistics; BSEE-0143, statutory and regulatory
Facility/Equipment Damage Report; BSEE- requirements; are safe and
1832, Notification of Incidents of protect the environment; and
Noncompliance. result in diligent
development and production on
OCS leases.
(ii) Support the unproved and
proved reserve estimation,
resource assessment, and fair
market value determinations.
(iii) Assess damage and
project any disruption of oil
and gas production from the
OCS after a major natural
occurrence.
[[Page 87]]
(2) Subpart B, Plans and Information Evaluate Deepwater Operations
(1014-0024). Plans for compliance with
statutory and regulatory
requirements
(3) Subpart C, Pollution Prevention and (i) Evaluate measures to
Control (1014-0023). prevent unauthorized
discharge of pollutants into
the offshore waters.
(ii) Ensure action is taken to
control pollution.
(4) Subpart D, Oil and Gas and Drilling (i) Evaluate the equipment and
Operations (1014-0018), including Forms procedures to be used in
BSEE-0125, End of Operations Report; drilling operations on the
BSEE-0133, Well Activity Report; and OCS.
BSEE-0133S, Open Hole Data Report.
(ii) Ensure that drilling
operations meet statutory and
regulatory requirements.
(5) Subpart E, Oil and Gas Well- (i) Evaluate the equipment and
Completion Operations (1014-0004). procedures to be used in well-
completion operations on the
OCS.
(ii) Ensure that well-
completion operations meet
statutory and regulatory
requirements.
(6) Subpart F, Oil and Gas Well Workover (i) Evaluate the equipment and
Operations (1014-0001). procedures to be used during
well-workover operations on
the OCS.
(ii) Ensure that well-workover
operations meet statutory and
regulatory requirements.
(7) Subpart G, Blowout Preventer Systems (i) Evaluate the equipment and
(1014-0028), including Form BSEE-0144, procedures to be used during
Rig Movement Notification Report. well drilling, completion,
workover, and abandonment
operations on the OCS.
(ii) Ensure that well
operations meet statutory and
regulatory requirements.
(8) Subpart H, Oil and Gas Production (i) Evaluate the equipment and
Safety Systems (1014-0003). procedures that will be used
during production operations
on the OCS.
(ii) Ensure that production
operations meet statutory and
regulatory requirements.
(9) Subpart I, Platforms and Structures (i) Evaluate the design,
(1014-0011). fabrication, and installation
of platforms on the OCS.
(ii) Ensure the structural
integrity of platforms
installed on the OCS.
(10) Subpart J, Pipelines and Pipeline (i) Evaluate the design,
Rights-of-Way (1014-0016), including installation, and operation
Form BSEE-0149, Assignment of Federal of pipelines on the OCS.
OCS Pipeline Right-of-Way Grant.
(ii) Ensure that pipeline
operations meet statutory and
regulatory requirements.
(11) Subpart K, Oil and Gas Production (i) Evaluate production rates
Rates (1014-0019), including Forms BSEE- for hydrocarbons produced on
0126, Well Potential Test Report and the OCS.
BSEE-0128, Semiannual Well Test Report.
(ii) Ensure economic
maximization of ultimate
hydrocarbon recovery.
(12) Subpart L, Oil and Gas Production (i) Evaluate the measurement
Measurement, Surface Commingling, and of production, commingling of
Security (1014-0002). hydrocarbons, and site
security plans.
(ii) Ensure that produced
hydrocarbons are measured and
commingled to provide for
accurate royalty payments and
security.
(13) Subpart M, Unitization (1014-0015). (i) Evaluate the unitization
of leases.
(ii) Ensure that unitization
prevents waste, conserves
natural resources, and
protects correlative rights.
(14) Subpart N, Remedies and Penalties.. (The requirements in subpart N
are exempt from the Paperwork
Reduction Act of 1995
according to 5 CFR 1320.4).
(15) Subpart O, Well Control and (i) Evaluate training program
Production Safety Training (1014-0008). curricula for OCS workers,
course schedules, and
attendance.
(ii) Ensure that training
programs are technically
accurate and sufficient to
meet statutory and regulatory
requirements, and that
workers are properly trained.
(16) Subpart P, Sulfur Operations (1014- (i) Evaluate sulfur
0006). exploration and development
operations on the OCS.
(ii) Ensure that OCS sulfur
operations meet statutory and
regulatory requirements and
will result in diligent
development and production of
sulfur leases.
(17) Subpart Q, Decommissioning Ensure that decommissioning
Activities (1014-0010). activities, site clearance,
and platform or pipeline
removal are properly
performed to meet statutory
and regulatory requirements
and do not conflict with
other users of the OCS.
[[Page 88]]
(18) Subpart S, Safety and Environmental (i) Evaluate operators'
Management Systems (1014-0017), policies and procedures to
including Form BSEE-0131, Performance assure safety and
Measures Data. environmental protection
while conducting OCS
operations (including those
operations conducted by
contractor and subcontractor
personnel).
(ii) Evaluate Performance
Measures Data relating to
risk and number of accidents,
injuries, and oil spills
during OCS activities.
(19) Application for Permit to Drill (i) Evaluate and approve the
(APD, Revised APD), Form BSEE-0123; and adequacy of the equipment,
Supplemental APD Information Sheet, materials, and/or procedures
Form BSEE-0123S, and all supporting that the lessee or operator
documentation (1014-0025). plans to use during drilling.
(ii) Ensure that applicable
OCS operations meet statutory
and regulatory requirements.
(20) Application for Permit to Modify (i) Evaluate and approve the
(APM), Form BSEE-0124, and supporting adequacy of the equipment,
documentation (1014-0026). materials, and/or procedures
that the lessee or operator
plans to use during drilling
and to evaluate well plan
modifications and changes in
major equipment.
(ii) Ensure that applicable
OCS operations meet statutory
and regulatory requirements.
------------------------------------------------------------------------
[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 26015, Apr. 29, 2016;
81 FR 36149, June 6, 2016]
Subpart B_Plans and Information
General Information
Sec. 250.200 Definitions.
Acronyms and terms used in this subpart have the following meanings:
(a) Acronyms used frequently in this subpart are listed
alphabetically below:
BOEM means Bureau of Ocean Energy Management of the Department of
the Interior.
BSEE means Bureau of Safety and Environmental Enforcement of the
Department of the Interior.
CID means Conservation Information Document.
CZMA means Coastal Zone Management Act.
DOCD means Development Operations Coordination Document.
DPP means Development and Production Plan.
DWOP means Deepwater Operations Plan.
EIA means Environmental Impact Analysis.
EP means Exploration Plan.
NPDES means National Pollutant Discharge Elimination System.
NTL means Notice to Lessees and Operators.
OCS means Outer Continental Shelf.
(b) Terms used in this subpart are listed alphabetically below:
Amendment means a change you make to an EP, DPP, or DOCD that is
pending before BOEM for a decision (see 30 CFR 550.232(d) and
550.267(d)).
Modification means a change required by the Regional Supervisor to
an EP, DPP, or DOCD (see 30 CFR 550.233(b)(2) and 550.270(b)(2)) that is
pending before BOEM for a decision because the OCS plan is inconsistent
with applicable requirements.
New or unusual technology means equipment or procedures that:
(1) Have not been used previously or extensively in a BSEE OCS
Region;
(2) Have not been used previously under the anticipated operating
conditions; or
(3) Have operating characteristics that are outside the performance
parameters established by this part.
Non-conventional production or completion technology includes, but
is not limited to, floating production systems, tension leg platforms,
spars, floating production, storage, and offloading systems, guyed
towers, compliant towers, subsea manifolds, and other subsea production
components that rely on a remote site or host facility for utility and
well control services.
Offshore vehicle means a vehicle that is capable of being driven on
ice.
Resubmitted OCS plan means an EP, DPP, or DOCD that contains changes
you make to an OCS plan that BOEM has disapproved (see 30 CFR
550.234(b), 550.272(a), and 550.273(b)).
[[Page 89]]
Revised OCS plan means an EP, DPP, or DOCD that proposes changes to
an approved OCS plan, such as those in the location of a well or
platform, type of drilling unit, or location of the onshore support base
(see 30 CFR 550.283(a)).
Supplemental OCS plan means an EP, DPP, or DOCD that proposes the
addition to an approved OCS plan of an activity that requires approval
of an application or permit (see 30 CFR 550.283(b)).
Sec. 250.201 What plans and information must I submit before I conduct
any activities on my lease or unit?
(a) Plans and documents. Before you conduct the activities on your
lease or unit listed in the following table, you must submit, and BSEE
must approve, the listed plans and documents. Your plans and documents
may cover one or more leases or units.
------------------------------------------------------------------------
You must submit a(n) . . . Before you . . .
------------------------------------------------------------------------
(1) [Reserved]
(2) [Reserved]
(3) [Reserved]
(4) Deepwater Operations Plan Conduct post-drilling installation
(DWOP), activities in any water depth
associated with a development
project that will involve the use of
a non-conventional production or
completion technology.
(5) [Reserved]
(6) [Reserved]
------------------------------------------------------------------------
(b) Submitting additional information. On a case-by-case basis, the
Regional Supervisor may require you to submit additional information if
the Regional Supervisor determines that it is necessary to evaluate your
proposed plan or document.
(c) Limiting information. The Regional Director may limit the amount
of information or analyses that you otherwise must provide in your
proposed plan or document under this subpart when:
(1) Sufficient applicable information or analysis is readily
available to BSEE;
(2) Other coastal or marine resources are not present or affected;
(3) Other factors such as technological advances affect information
needs; or
(4) Information is not necessary or required for a State to
determine consistency with their CZMA Plan.
(d) Referencing. In preparing your proposed plan or document, you
may reference information and data discussed in other plans or documents
you previously submitted or that are otherwise readily available to
BSEE.
Sec. Sec. 250.202-250.203 [Reserved]
Sec. 250.204 How must I protect the rights of the Federal government?
(a) To protect the rights of the Federal government, you must
either:
(1) Drill and produce the wells that the Regional Supervisor
determines are necessary to protect the Federal government from loss due
to production on other leases or units or from adjacent lands under the
jurisdiction of other entities (e.g., State and foreign governments); or
(2) Pay a sum that the Regional Supervisor determines as adequate to
compensate the Federal government for your failure to drill and produce
any well.
(b) Payment under paragraph (a)(2) of this section may constitute
production in paying quantities for the purpose of extending the lease
term.
(c) You must complete and produce any penetrated hydrocarbon-bearing
zone that the Regional Supervisor determines is necessary to conform to
sound conservation practices.
Sec. 250.205 Are there special requirements if my well affects
an adjacent property?
For wells that could intersect or drain an adjacent property, the
Regional Supervisor may require special measures to protect the rights
of the Federal government and objecting lessees or operators of adjacent
leases or units.
Post-Approval Requirements for the EP, DPP, and DOCD
Sec. 250.282 Do I have to conduct post-approval monitoring?
The Regional Supervisor may direct you to conduct monitoring
programs. You must retain copies of all monitoring data obtained or
derived from your monitoring programs and make
[[Page 90]]
them available to BSEE upon request. The Regional Supervisor may require
you to:
(a) Monitoring plans. Submit monitoring plans for approval before
you begin work; and
(b) Monitoring reports. Prepare and submit reports that summarize
and analyze data and information obtained or derived from your
monitoring programs. The Regional Supervisor will specify requirements
for preparing and submitting these reports.
Deepwater Operations Plan (DWOP)
Sec. 250.286 What is a DWOP?
(a) A DWOP is a plan that provides sufficient information for BSEE
to review a deepwater development project, and any other project that
uses non-conventional production or completion technology, from a total
system approach. The DWOP does not replace, but supplements other
submittals required by the regulations such as BOEM Exploration Plans,
Development and Production Plans, and Development Operations
Coordination Documents. BSEE will use the information in your DWOP to
determine whether the project will be developed in an acceptable manner,
particularly with respect to operational safety and environmental
protection issues involved with non-conventional production or
completion technology.
(b) The DWOP process consists of two parts: a Conceptual Plan and
the DWOP. Section 250.289 prescribes what the Conceptual Plan must
contain, and Sec. 250.292 prescribes what the DWOP must contain.
Sec. 250.287 For what development projects must I submit a DWOP?
You must submit a DWOP for each development project in which you
will use non-conventional production or completion technology,
regardless of water depth. If you are unsure whether BSEE considers the
technology of your project non-conventional, you must contact the
Regional Supervisor for guidance.
Sec. 250.288 When and how must I submit the Conceptual Plan?
You must submit four copies, or one hard copy and one electronic
version, of the Conceptual Plan to the Regional Director after you have
decided on the general concept(s) for development and before you begin
engineering design of the well safety control system or subsea
production systems to be used after well completion.
Sec. 250.289 What must the Conceptual Plan contain?
In the Conceptual Plan, you must explain the general design basis
and philosophy that you will use to develop the field. You must include
the following information:
(a) An overview of the development concept(s);
(b) A well location plat;
(c) The system control type (i.e., direct hydraulic or electro-
hydraulic); and
(d) The distance from each of the wells to the host platform.
Sec. 250.290 What operations require approval of the Conceptual Plan?
You may not complete any production well or install the subsea
wellhead and well safety control system (often called the tree) before
BSEE has approved the Conceptual Plan.
Sec. 250.291 When and how must I submit the DWOP?
You must submit four copies, or one hard copy and one electronic
version, of the DWOP to the Regional Director after you have
substantially completed safety system design and before you begin to
procure or fabricate the safety and operational systems (other than the
tree), production platforms, pipelines, or other parts of the production
system.
Sec. 250.292 What must the DWOP contain?
You must include the following information in your DWOP:
(a) A description and schematic of the typical wellbore, casing, and
completion;
(b) Structural design, fabrication, and installation information for
each
[[Page 91]]
surface system, including host facilities;
(c) Design, fabrication, and installation information on the mooring
systems for each surface system;
(d) Information on any active stationkeeping system(s) involving
thrusters or other means of propulsion used with a surface system;
(e) Information concerning the drilling and completion systems;
(f) Design and fabrication information for each riser system (e.g.,
drilling, workover, production, and injection);
(g) Pipeline information;
(h) Information about the design, fabrication, and operation of an
offtake system for transferring produced hydrocarbons to a transport
vessel;
(i) Information about subsea wells and associated systems that
constitute all or part of a single project development covered by the
DWOP;
(j) Flow schematics and Safety Analysis Function Evaluation (SAFE)
charts (API RP 14C, subsection 4.3c, incorporated by reference in Sec.
250.198) of the production system from the Surface Controlled Subsurface
Safety Valve (SCSSV) downstream to the first item of separation
equipment;
(k) A description of the surface/subsea safety system and emergency
support systems to include a table that depicts what valves will close,
at what times, and for what events or reasons;
(l) A general description of the operating procedures, including a
table summarizing the curtailment of production and offloading based on
operational considerations;
(m) A description of the facility installation and commissioning
procedure;
(n) A discussion of any new technology that affects hydrocarbon
recovery systems;
(o) A list of any alternate compliance procedures or departures for
which you anticipate requesting approval;
(p) If you propose to use a pipeline free standing hybrid riser
(FSHR) on a permanent installation that utilizes a critical chain, wire
rope, or synthetic tether to connect the top of the riser to a buoyancy
air can, provide the following information in your DWOP in the
discussions required by paragraphs (f) and (g) of this section:
(1) A detailed description and drawings of the FSHR, buoy and the
tether system;
(2) Detailed information on the design, fabrication, and
installation of the FSHR, buoy and tether system, including pressure
ratings, fatigue life, and yield strengths;
(3) A description of how you met the design requirements, load
cases, and allowable stresses for each load case according to API RP 2RD
(as incorporated by reference in Sec. 250.198);
(4) Detailed information regarding the tether system used to connect
the FSHR to a buoyancy air can;
(5) Descriptions of your monitoring system and monitoring plan to
monitor the pipeline FSHR and tether for fatigue, stress, and any other
abnormal condition (e.g., corrosion) that may negatively impact the
riser or tether; and
(6) Documentation that the tether system and connection accessories
for the pipeline FSHR have been certified by an approved classification
society or equivalent and verified by the CVA required in subpart I of
this part; and
(q) Payment of the service fee listed in Sec. 250.125.
[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 26017, Apr. 29, 2016]
Sec. 250.293 What operations require approval of the DWOP?
You may not begin production until BSEE approves your DWOP.
Sec. 250.294 May I combine the Conceptual Plan and the DWOP?
If your development project meets the following criteria, you may
submit a combined Conceptual Plan/DWOP on or before the deadline for
submitting the Conceptual Plan.
(a) The project is located in water depths of less than 400 meters
(1,312 feet); and
(b) The project is similar to projects involving non-conventional
production or completion technology for which you have obtained approval
previously.
[[Page 92]]
Sec. 250.295 When must I revise my DWOP?
You must revise either the Conceptual Plan or your DWOP to reflect
changes in your development project that materially alter the
facilities, equipment, and systems described in your plan. You must
submit the revision within 60 days after any material change to the
information required for that part of your plan.
Subpart C_Pollution Prevention and Control
Sec. 250.300 Pollution prevention.
(a) During the exploration, development, production, and
transportation of oil and gas or sulphur, the lessee shall take measures
to prevent unauthorized discharge of pollutants into the offshore
waters. The lessee shall not create conditions that will pose
unreasonable risk to public health, life, property, aquatic life,
wildlife, recreation, navigation, commercial fishing, or other uses of
the ocean.
(1) When pollution occurs as a result of operations conducted by or
on behalf of the lessee and the pollution damages or threatens to damage
life (including fish and other aquatic life), property, any mineral
deposits (in areas leased or not leased), or the marine, coastal, or
human environment, the control and removal of the pollution to the
satisfaction of the District Manager shall be at the expense of the
lessee. Immediate corrective action shall be taken in all cases where
pollution has occurred. Corrective action shall be subject to
modification when directed by the District Manager.
(2) If the lessee fails to control and remove the pollution, the
Director, in cooperation with other appropriate Agencies of Federal,
State, and local governments, or in cooperation with the lessee, or
both, shall have the right to control and remove the pollution at the
lessee's expense. Such action shall not relieve the lessee of any
responsibility provided for by law.
(b)(1) The District Manager may restrict the rate of drilling fluid
discharges or prescribe alternative discharge methods. The District
Manager may also restrict the use of components that could cause
unreasonable degradation to the marine environment. No petroleum-based
substances, including diesel fuel, may be added to the drilling mud
system without prior approval of the District Manager. For Arctic OCS
exploratory drilling, you must capture all petroleum-based mud to
prevent its discharge into the marine environment. The Regional
Supervisor may also require you to capture, during your Arctic OCS
exploratory drilling operations, all water-based mud from operations
after completion of the hole for the conductor casing to prevent its
discharge into the marine environment, based on various factors
including, but not limited to:
(i) The proximity of your exploratory drilling operation to
subsistence hunting and fishing locations;
(ii) The extent to which discharged mud may cause marine mammals to
alter their migratory patterns in a manner that impedes subsistence
users' access to, or use of, those resources, or increases the risk of
injury to subsistence users; or
(iii) The extent to which discharged mud may adversely affect marine
mammals, fish, or their habitat.
(2) You must obtain approval from the District Manager of the method
you plan to use to dispose of drill cuttings, sand, and other well
solids. For Arctic OCS exploratory drilling, you must capture all
cuttings from operations that utilize petroleum-based mud to prevent
their discharge into the marine environment. The Regional Supervisor may
also require you to capture, during your Arctic OCS exploratory drilling
operations, all cuttings from operations that utilize water-based mud
after completion of the hole for the conductor casing to prevent their
discharge into the marine environment, based on various factors
including, but not limited to:
(i) The proximity of your exploratory drilling operation to
subsistence hunting and fishing locations;
(ii) The extent to which discharged cuttings may cause marine
mammals to alter their migratory patterns in a manner that impedes
subsistence users' access to, or use of, those resources, or increases
the risk of injury to subsistence users; or
[[Page 93]]
(iii) The extent to which discharged cuttings may adversely affect
marine mammals, fish, or their habitat.
(3) All hydrocarbon-handling equipment for testing and production
such as separators, tanks, and treaters shall be designed, installed,
and operated to prevent pollution. Maintenance or repairs which are
necessary to prevent pollution of offshore waters shall be undertaken
immediately.
(4) Curbs, gutters, drip pans, and drains shall be installed in deck
areas in a manner necessary to collect all contaminants not authorized
for discharge. Oil drainage shall be piped to a properly designed,
operated, and maintained sump system which will automatically maintain
the oil at a level sufficient to prevent discharge of oil into offshore
waters. All gravity drains shall be equipped with a water trap or other
means to prevent gas in the sump system from escaping through the
drains. Sump piles shall not be used as processing devices to treat or
skim liquids but may be used to collect treated-produced water, treated-
produced sand, or liquids from drip pans and deck drains and as a final
trap for hydrocarbon liquids in the event of equipment upsets.
Improperly designed, operated, or maintained sump piles which do not
prevent the discharge of oil into offshore waters shall be replaced or
repaired.
(5) On artificial islands, all vessels containing hydrocarbons shall
be placed inside an impervious berm or otherwise protected to contain
spills. Drainage shall be directed away from the drilling rig to a sump.
Drains and sumps shall be constructed to prevent seepage.
(6) Disposal of equipment, cables, chains, containers, or other
materials into offshore waters is prohibited.
(c) Materials, equipment, tools, containers, and other items used in
the Outer Continental Shelf (OCS) which are of such shape or
configuration that they are likely to snag or damage fishing devices
shall be handled and marked as follows:
(1) All loose material, small tools, and other small objects shall
be kept in a suitable storage area or a marked container when not in use
and in a marked container before transport over offshore waters;
(2) All cable, chain, or wire segments shall be recovered after use
and securely stored until suitable disposal is accomplished;
(3) Skid-mounted equipment, portable containers, spools or reels,
and drums shall be marked with the owner's name prior to use or
transport over offshore waters; and
(4) All markings must clearly identify the owner and must be durable
enough to resist the effects of the environmental conditions to which
they may be exposed.
(d) Any of the items described in paragraph (c) of this section that
are lost overboard shall be recorded on the facility's daily operations
report, as appropriate, and reported to the District Manager.
[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 46560, July 15, 2016]
Sec. 250.301 Inspection of facilities.
Drilling and production facilities shall be inspected daily or at
intervals approved or prescribed by the District Manager to determine if
pollution is occurring. Necessary maintenance or repairs shall be made
immediately. Records of such inspections and repairs shall be maintained
at the facility or at a nearby manned facility for 2 years.
Subpart D_Oil and Gas Drilling Operations
General Requirements
Sec. 250.400 General requirements.
Drilling operations must be conducted in a safe manner to protect
against harm or damage to life (including fish and other aquatic life),
property, natural resources of the Outer Continental Shelf (OCS),
including any mineral deposits (in areas leased and not leased), the
National security or defense, or the marine, coastal, or human
environment. In addition to the requirements of this subpart, you must
also follow the applicable requirements of subpart G of this part.
[81 FR 26017, Apr. 29, 2016]
[[Page 94]]
Sec. Sec. 250.401-250.403 [Reserved]
Sec. 250.404 What are the requirements for the crown block?
You must have a crown block safety device that prevents the
traveling block from striking the crown block. You must check the device
for proper operation at least once per week and after each drill-line
slipping operation and record the results of this operational check in
the driller's report.
Sec. 250.405 What are the safety requirements for diesel engines
used on a drilling rig?
You must equip each diesel engine with an air intake device to shut
down the diesel engine in the event of a runaway.
(a) For a diesel engine that is not continuously manned, you must
equip the engine with an automatic shutdown device;
(b) For a diesel engine that is continuously manned, you may equip
the engine with either an automatic or remote manual air intake shutdown
device;
(c) You do not have to equip a diesel engine with an air intake
device if it meets one of the following criteria:
(1) Starts a larger engine;
(2) Powers a firewater pump;
(3) Powers an emergency generator;
(4) Powers a BOP accumulator system;
(5) Provides air supply to divers or confined entry personnel;
(6) Powers temporary equipment on a nonproducing platform;
(7) Powers an escape capsule; or
(8) Powers a portable single-cylinder rig washer.
[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 36149, June 6, 2016]
Sec. 250.406 [Reserved]
Sec. 250.407 What tests must I conduct to determine
reservoir characteristics?
You must determine the presence, quantity, quality, and reservoir
characteristics of oil, gas, sulphur, and water in the formations
penetrated by logging, formation sampling, or well testing.
Sec. 250.408 May I use alternative procedures or equipment during
drilling operations?
You may use alternative procedures or equipment during drilling
operations after receiving approval from the District Manager. You must
identify and discuss your proposed alternative procedures or equipment
in your Application for Permit to Drill (APD) (Form BSEE-0123) (see
Sec. 250.414(h)). Procedures for obtaining approval are described in
Sec. 250.141 of this part.
Sec. 250.409 May I obtain departures from these drilling requirements?
The District Manager may approve departures from the drilling
requirements specified in this subpart. You may apply for a departure
from drilling requirements by writing to the District Manager. You
should identify and discuss the departure you are requesting in your APD
(see Sec. 250.414(h)).
Applying for a Permit To Drill
Sec. 250.410 How do I obtain approval to drill a well?
You must obtain written approval from the District Manager before
you begin drilling any well or before you sidetrack, bypass, or deepen a
well. To obtain approval, you must:
(a) Submit the information required by Sec. Sec. 250.411 through
250.418;
(b) Include the well in your approved Exploration Plan (EP),
Development and Production Plan (DPP), or Development Operations
Coordination Document (DOCD);
(c) Meet the oil spill financial responsibility requirements for
offshore facilities as required by 30 CFR part 553; and
(d) Submit the following to the District Manager:
(1) An original and two complete copies of Form BSEE-0123,
Application for Permit to Drill (APD), and Form BSEE-0123S, Supplemental
APD Information Sheet;
(2) A separate public information copy of forms BSEE-0123 and BSEE-
0123S that meets the requirements of Sec. 250.186; and
(3) Payment of the service fee listed in Sec. 250.125.
[[Page 95]]
Sec. 250.411 What information must I submit with my application?
In addition to forms BSEE-0123 and BSEE-0123S, you must include the
information required in this subpart and subpart G of this part,
including the following:
----------------------------------------------------------------------------------------------------------------
Information that you must include with an APD Where to find a description
----------------------------------------------------------------------------------------------------------------
(a) Plat that shows locations of the proposed Sec. 250.412.
well,.
(b) Design criteria used for the proposed well,.. Sec. 250.413.
(c) Drilling prognosis,.......................... Sec. 250.414.
(d) Casing and cementing programs,............... Sec. 250.415.
(e) Diverter systems descriptions,............... Sec. 250.416.
(f) BOP system descriptions,..................... Sec. 250.731.
(g) Requirements for using a MODU, and........... Sec. 250.713.
(h) Additional information....................... Sec. 250.418.
----------------------------------------------------------------------------------------------------------------
[81 FR 26017, Apr. 29, 2016]
Sec. 250.412 What requirements must the location plat meet?
The location plat must:
(a) Have a scale of 1:24,000 (1 inch = 2,000 feet);
(b) Show the surface and subsurface locations of the proposed well
and all the wells in the vicinity;
(c) Show the surface and subsurface locations of the proposed well
in feet or meters from the block line;
(d) Contain the longitude and latitude coordinates, and either
Universal Transverse Mercator grid-system coordinates or state plane
coordinates in the Lambert or Transverse Mercator Projection system for
the surface and subsurface locations of the proposed well; and
(e) State the units and geodetic datum (including whether the datum
is North American Datum 27 or 83) for these coordinates. If the datum
was converted, you must state the method used for this conversion, since
the various methods may produce different values.
Sec. 250.413 What must my description of well drilling design
criteria address?
Your description of well drilling design criteria must address:
(a) Pore pressures;
(b) Formation fracture gradients, adjusted for water depth;
(c) Potential lost circulation zones;
(d) Drilling fluid weights;
(e) Casing setting depths;
(f) Maximum anticipated surface pressures. For this section, maximum
anticipated surface pressures are the pressures that you reasonably
expect to be exerted upon a casing string and its related wellhead
equipment. In calculating maximum anticipated surface pressures, you
must consider: drilling, completion, and producing conditions; drilling
fluid densities to be used below various casing strings; fracture
gradients of the exposed formations; casing setting depths; total well
depth; formation fluid types; safety margins; and other pertinent
conditions. You must include the calculations used to determine the
pressures for the drilling and the completion phases, including the
anticipated surface pressure used for designing the production string;
(g) A single plot containing curves for estimated pore pressures,
formation fracture gradients, proposed drilling fluid weights, planned
safe drilling margin, and casing setting depths in true vertical
measurements;
(h) A summary report of the shallow hazards site survey that
describes the geological and manmade conditions if not previously
submitted; and
(i) Permafrost zones, if applicable.
[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 26017, Apr. 29, 2016]
Sec. 250.414 What must my drilling prognosis include?
Your drilling prognosis must include a brief description of the
procedures you will follow in drilling the well. This prognosis includes
but is not limited to the following:
(a) Projected plans for coring at specified depths;
(b) Projected plans for logging;
(c) Planned safe drilling margin that is between the estimated pore
pressure and the lesser of estimated fracture
[[Page 96]]
gradients or casing shoe pressure integrity test and that is based on a
risk assessment consistent with expected well conditions and operations.
(1) Your safe drilling margin must also include use of equivalent
downhole mud weight that is:
(i) Greater than the estimated pore pressure; and
(ii) Except as provided in paragraph (c)(2) of this section, a
minimum of 0.5 pound per gallon below the lower of the casing shoe
pressure integrity test or the lowest estimated fracture gradient.
(2) In lieu of meeting the criteria in paragraph (c)(1)(ii) of this
section, you may use an equivalent downhole mud weight as specified in
your APD, provided that you submit adequate documentation (such as risk
modeling data, off-set well data, analog data, seismic data) to justify
the alternative equivalent downhole mud weight.
(3) When determining the pore pressure and lowest estimated fracture
gradient for a specific interval, you must consider related off-set well
behavior observations.
(d) Estimated depths to the top of significant marker formations;
(e) Estimated depths to significant porous and permeable zones
containing fresh water, oil, gas, or abnormally pressured formation
fluids;
(f) Estimated depths to major faults;
(g) Estimated depths of permafrost, if applicable;
(h) A list and description of all requests for using alternate
procedures or departures from the requirements of this subpart in one
place in the APD. You must explain how the alternate procedures afford
an equal or greater degree of protection, safety, or performance, or why
the departures are requested;
(i) Projected plans for well testing (refer to Sec. 250.460);
(j) The type of wellhead system and liner hanger system to be
installed and a descriptive schematic, which includes but is not limited
to pressure ratings, dimensions, valves, load shoulders, and locking
mechanisms, if applicable; and
(k) Any additional information required by the District Manager
needed to clarify or evaluate your drilling prognosis.
[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 26017, Apr. 29, 2016]
Sec. 250.415 What must my casing and cementing programs include?
Your casing and cementing programs must include:
(a) The following well design information:
(1) Hole sizes;
(2) Bit depths (including measured and true vertical depth (TVD));
(3) Casing information, including sizes, weights, grades, collapse
and burst values, types of connection, and setting depths (measured and
TVD) for all sections of each casing interval; and
(4) Locations of any installed rupture disks (indicate if burst or
collapse and rating);
(b) Casing design safety factors for tension, collapse, and burst
with the assumptions made to arrive at these values;
(c) Type and amount of cement (in cubic feet) planned for each
casing string;
(d) In areas containing permafrost, setting depths for conductor and
surface casing based on the anticipated depth of the permafrost. Your
program must provide protection from thaw subsidence and freezeback
effect, proper anchorage, and well control;
(e) A statement of how you evaluated the best practices included in
API RP 65, Recommended Practice for Cementing Shallow Water Flow Zones
in Deep Water Wells (as incorporated by reference in Sec. 250.198), if
you drill a well in water depths greater than 500 feet and are in either
of the following two areas:
(1) An ``area with an unknown shallow water flow potential'' is a
zone or geologic formation where neither the presence nor absence of
potential for a shallow water flow has been confirmed.
(2) An ``area known to contain a shallow water flow hazard'' is a
zone or geologic formation for which drilling has confirmed the presence
of shallow water flow; and
(f) A written description of how you evaluated the best practices
included in API Standard 65--Part 2, Isolating
[[Page 97]]
Potential Flow Zones During Well Construction, Second Edition (as
incorporated by reference in Sec. 250.198). Your written description
must identify the mechanical barriers and cementing practices you will
use for each casing string (reference API Standard 65--Part 2, Sections
4 and 5).
[76 FR 64462, Oct. 18, 2011, as amended at 77 FR 50891, Aug. 22, 2012;
81 FR 26018, Apr. 29, 2016]
Sec. 250.416 What must I include in the diverter description?
You must include in the diverter description:
(a) A description of the diverter system and its operating
procedures;
(b) A schematic drawing of the diverter system (plan and elevation
views) that shows:
(1) The size of the element installed in the diverter housing;
(2) Spool outlet internal diameter(s);
(3) Diverter-line lengths and diameters; burst strengths and radius
of curvature at each turn; and
(4) Valve type, size, working pressure rating, and location.
[81 FR 26018, Apr. 29, 2016]
Sec. 250.417 [Reserved]
Sec. 250.418 What additional information must I submit with my APD?
You must include the following with the APD:
(a) Rated capacities of the drilling rig and major drilling
equipment, if not already on file with the appropriate District office;
(b) A drilling fluids program that includes the minimum quantities
of drilling fluids and drilling fluid materials, including weight
materials, to be kept at the site;
(c) A proposed directional plot if the well is to be directionally
drilled;
(d) A Hydrogen Sulfide Contingency Plan (see Sec. 250.490), if
applicable, and not previously submitted;
(e) A welding plan (see Sec. Sec. 250.109 to 250.113) if not
previously submitted;
(f) In areas subject to subfreezing conditions, evidence that the
drilling equipment, BOP systems and components, diverter systems, and
other associated equipment and materials are suitable for operating
under such conditions;
(g) A request for approval, if you plan to wash out or displace
cement to facilitate casing removal upon well abandonment. Your request
must include a description of how far below the mudline you propose to
displace cement and how you will visually monitor returns;
(h) Certification of your casing and cementing program as required
in Sec. 250.420(a)(7); and
(i) Such other information as the District Manager may require.
(j) For Arctic OCS exploratory drilling operations, you must provide
the information required by Sec. 250.470.
[76 FR 64462, Oct. 18, 2011, as amended at 77 FR 50892, Aug. 22, 2012;
81 FR 26018, Apr. 29, 2016; 81 FR 46561, July 15, 2016]
Casing and Cementing Requirements
Sec. 250.420 What well casing and cementing requirements must I meet?
You must case and cement all wells. Your casing and cementing
programs must meet the applicable requirements of this subpart and of
subpart G of this part.
(a) Casing and cementing program requirements. Your casing and
cementing programs must:
(1) Properly control formation pressures and fluids;
(2) Prevent the direct or indirect release of fluids from any
stratum through the wellbore into offshore waters;
(3) Prevent communication between separate hydrocarbon-bearing
strata;
(4) Protect freshwater aquifers from contamination;
(5) Support unconsolidated sediments;
(6) Provide adequate centralization to ensure proper cementation;
and
(7)(i) Include a certification signed by a registered professional
engineer that the casing and cementing design is appropriate for the
purpose for which it is intended under expected wellbore conditions, and
is sufficient to satisfy the tests and requirements of this section and
Sec. 250.423. Submit this certification with your APD (Form BSEE-0123).
[[Page 98]]
(ii) You must have the registered professional engineer involved in
the casing and cementing design process.
(iii) The registered professional engineer must be registered in a
state of the United States and have sufficient expertise and experience
to perform the certification.
(b) Casing requirements. (1) You must design casing (including
liners) to withstand the anticipated stresses imposed by tensile,
compressive, and buckling loads; burst and collapse pressures; thermal
effects; and combinations thereof.
(2) The casing design must include safety measures that ensure well
control during drilling and safe operations during the life of the well.
(3) On all wells that use subsea BOP stacks, you must include two
independent barriers, including one mechanical barrier, in each annular
flow path (examples of barriers include, but are not limited to, primary
cement job and seal assembly). For the final casing string (or liner if
it is your final string), you must install one mechanical barrier in
addition to cement to prevent flow in the event of a failure in the
cement. A dual float valve, by itself, is not considered a mechanical
barrier. These barriers cannot be modified prior to or during completion
or abandonment operations. The BSEE District Manager may approve
alternative options under Sec. 250.141. You must submit documentation
of this installation to BSEE in the End-of-Operations Report (Form BSEE-
0125).
(4) If you need to substitute a different size, grade, or weight of
casing than what was approved in your APD, you must contact the District
Manager for approval prior to installing the casing.
(c) Cementing requirements. (1) You must design and conduct your
cementing jobs so that cement composition, placement techniques, and
waiting times ensure that the cement placed behind the bottom 500 feet
of casing attains a minimum compressive strength of 500 psi before
drilling out the casing or before commencing completion operations. (If
a liner is used refer to Sec. 250.421(f)).
(2) You must use a weighted fluid during displacement to maintain an
overbalanced hydrostatic pressure during the cement setting time, except
when cementing casings or liners in riserless hole sections.
[76 FR 64462, Oct. 18, 2011, as amended at 77 FR 50892, Aug. 22, 2012;
81 FR 26018, Apr. 29, 2016]
Sec. 250.421 What are the casing and cementing requirements
by type of casing string?
The table in this section identifies specific design, setting, and
cementing requirements for casing strings and liners. For the purposes
of subpart D, the casing strings in order of normal installation are as
follows: drive or structural, conductor, surface, intermediate, and
production casings (including liners). The District Manager may approve
or prescribe other casing and cementing requirements where appropriate.
------------------------------------------------------------------------
Cementing
Casing type Casing requirements requirements
------------------------------------------------------------------------
(a) Drive or Structural..... Set by driving, If you drilled a
jetting, or portion of this
drilling to the hole, you must use
minimum depth as enough cement to
approved or fill the annular
prescribed by the space back to the
District Manager. mudline.
(b) Conductor............... Design casing and Use enough cement to
select setting fill the calculated
depths based on annular space back
relevant to the mudline.
engineering and Verify annular fill
geologic factors. by observing cement
These factors returns. If you
include the cannot observe
presence or absence cement returns, use
of hydrocarbons, additional cement
potential hazards, to ensure fill-back
and water depths. to the mudline.
Set casing For drilling on an
immediately before artificial island
drilling into or when using a
formations known to well cellar, you
contain oil or gas. must discuss the
If you encounter cement fill level
oil or gas or with the District
unexpected Manager.
formation pressure
before the planned
casing point, you
must set casing
immediately and set
it above the
encountered zone.
[[Page 99]]
(c) Surface................. Design casing and Use enough cement to
select setting fill the calculated
depths based on annular space to at
relevant least 200 feet
engineering and inside the
geologic factors. conductor casing.
These factors When geologic
include the conditions such as
presence or absence near-surface
of hydrocarbons, fractures and
potential hazards, faulting exist, you
and water depths. must use enough
cement to fill the
calculated annular
space to the
mudline.
(d) Intermediate............ Design casing and Use enough cement to
select setting cover and isolate
depth based on all hydrocarbon-
anticipated or bearing zones and
encountered isolate abnormal
geologic pressure intervals
characteristics or from normal
wellbore conditions. pressure intervals
in the well.
As a minimum, you
must cement the
annular space 500
feet above the
casing shoe and 500
feet above each
zone to be
isolated.
(e) Production.............. Design casing and Use enough cement to
select setting cover or isolate
depth based on all hydrocarbon-
anticipated or bearing zones above
encountered the shoe.
geologic As a minimum, you
characteristics or must cement the
wellbore conditions. annular space at
least 500 feet
above the casing
shoe and 500 feet
above the uppermost
hydrocarbon-bearing
zone.
(f) Liners.................. If you use a liner Same as cementing
as surface casing, requirements for
you must set the specific casing
top of the liner at types. For example,
least 200 feet a liner used as
above the previous intermediate casing
casing/liner shoe. must be cemented
If you use a liner according to the
as an intermediate cementing
string below a requirements for
surface string or intermediate
production casing casing. If you have
below an a liner lap and are
intermediate unable to cement
string, you must 500 feet above the
set the top of the previous shoe, as
liner at least 100 provided by
feet above the paragraphs (d) and
previous casing (e) of this
shoe. section, you must
You may not use a submit and receive
liner as conductor approval from the
casing. District Manager on
A subsea well casing a case-by-case
string whose top is basis.
above the mudline
and that has been
cemented back to
the mudline will
not be considered a
liner.
------------------------------------------------------------------------
[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 26018, Apr. 29, 2016]
Sec. 250.422 When may I resume drilling after cementing?
(a) After cementing surface, intermediate, or production casing (or
liners), you may resume drilling after the cement has been held under
pressure for 12 hours. For conductor casing, you may resume drilling
after the cement has been held under pressure for 8 hours. One
acceptable method of holding cement under pressure is to use float
valves to hold the cement in place.
(b) If you plan to nipple down your diverter or BOP stack during the
8- or 12-hour waiting time, you must determine, before nippling down,
when it will be safe to do so. You must base your determination on a
knowledge of formation conditions, cement composition, effects of
nippling down, presence of potential drilling hazards, well conditions
during drilling, cementing, and post cementing, as well as past
experience.
Sec. 250.423 What are the requirements for casing and liner installation?
You must ensure proper installation of casing in the subsea wellhead
or liner in the liner hanger.
(a) You must ensure that the latching mechanisms or lock down
mechanisms are engaged upon successfully installing and cementing the
casing string. If there is an indication of an inadequate cement job,
you must comply with Sec. 250.428(c).
(b) If you run a liner that has a latching mechanism or lock down
mechanism, you must ensure that the latching mechanisms or lock down
mechanisms are engaged upon successfully installing and cementing the
liner. If there is an indication of an inadequate cement job, you must
comply with Sec. 250.428(c).
(c) You must perform a pressure test on the casing seal assembly to
ensure proper installation of casing or liner. You must perform this
test for the intermediate and production casing strings or liners.
(1) You must submit for approval with your APD, test procedures and
criteria for a successful test.
[[Page 100]]
(2) You must document all your test results and make them available
to BSEE upon request.
[81 FR 26019, Apr. 29, 2016]
Sec. Sec. 250.424-250.426 [Reserved]
Sec. 250.427 What are the requirements for pressure integrity tests?
You must conduct a pressure integrity test below the surface casing
or liner and all intermediate casings or liners. The District Manager
may require you to run a pressure-integrity test at the conductor casing
shoe if warranted by local geologic conditions or the planned casing
setting depth. You must conduct each pressure integrity test after
drilling at least 10 feet but no more than 50 feet of new hole below the
casing shoe. You must test to either the formation leak-off pressure or
to an equivalent drilling fluid weight if identified in an approved APD.
(a) You must use the pressure integrity test and related hole-
behavior observations, such as pore-pressure test results, gas-cut
drilling fluid, and well kicks to adjust the drilling fluid program and
the setting depth of the next casing string. You must record all test
results and hole-behavior observations made during the course of
drilling related to formation integrity and pore pressure in the
driller's report.
(b) While drilling, you must maintain the safe drilling margins
identified in Sec. 250.414. When you cannot maintain the safe margins,
you must suspend drilling operations and remedy the situation.
[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 26019, Apr. 29, 2016]
Sec. 250.428 What must I do in certain cementing and casing situations?
The table in this section describes actions that lessees must take
when certain situations occur during casing and cementing activities.
------------------------------------------------------------------------
If you encounter the following situation: Then you must . . .
------------------------------------------------------------------------
(a) Have unexpected formation pressures or Submit a revised casing
conditions that warrant revising your program to the District
casing design, Manager for approval.
(b) Need to change casing setting depths Submit those changes to the
or hole interval drilling depth (for a District Manager for
BHA with an under-reamer, this means bit approval and include a
depth) more than 100 feet true vertical certification by a
depth (TVD) from the approved APD due to professional engineer (PE)
conditions encountered during drilling that he or she reviewed and
operations, approved the proposed
changes.
(c) Have indication of inadequate cement (1) Locate the top of cement
job (such as lost returns, no cement by:
returns to mudline or expected height, (i) Running a temperature
cement channeling, or failure of survey;
equipment), (ii) Running a cement
evaluation log; or
(iii) Using a combination of
these techniques.
(2) Determine if your cement
job is inadequate. If your
cement job is determined to
be inadequate, refer to
paragraph (d) of this
section.
(3) If your cement job is
determined to be adequate,
report the results to the
District Manager in your
submitted WAR.
(d) Inadequate cement job, Take remedial actions. The
District Manager must
review and approve all
remedial actions before you
may take them, unless
immediate actions must be
taken to ensure the safety
of the crew or to prevent a
well-control event. If you
complete any immediate
action to ensure the safety
of the crew or to prevent a
well-control event, submit
a description of the action
to the District Manager
when that action is
complete. Any changes to
the well program will
require submittal of a
certification by a
professional engineer (PE)
certifying that he or she
reviewed and approved the
proposed changes, and must
meet any other requirements
of the District Manager.
(e) Primary cement job that did not Isolate those intervals from
isolate abnormal pressure intervals, normal pressures by squeeze
cementing before you
complete; suspend
operations; or abandon the
well, whichever occurs
first.
(f) Decide to produce a well that was not Have at least two cemented
originally contemplated for production, casing strings (does not
include liners) in the
well. Note: All producing
wells must have at least
two cemented casing
strings.
(g) Want to drill a well without setting Submit geologic data and
conductor casing, information to the District
Manager that demonstrates
the absence of shallow
hydrocarbons or hazards.
This information must
include logging and
drilling fluid-monitoring
from wells previously
drilled within 500 feet of
the proposed well path down
to the next casing point.
[[Page 101]]
(h) Need to use less than required cement Submit information to the
for the surface casing during floating District Manager that
drilling operations to provide protection demonstrates the use of
from burst and collapse pressures, less cement is necessary.
(i) Cement across a permafrost zone, Use cement that sets before
it freezes and has a low
heat of hydration.
(j) Leave the annulus opposite a Fill the annulus with a
permafrost zone uncemented, liquid that has a freezing
point below the minimum
permafrost temperature and
minimizes opposite a
corrosion.
(k) Plan to use a valve(s) on the drive Include a description of the
pipe during cementing operations for the plan in your APD. Your
conductor casing, surface casing, or description must include a
liner, schematic of the valve and
height above the water
line. The valve must be
remotely operated and full
opening with visual
observation while taking
returns. The person in
charge of observing returns
must be in communication
with the drill floor. You
must record in your daily
report and in the WAR if
cement returns were
observed. If cement returns
are not observed, you must
contact the District
Manager and obtain approval
of proposed plans to locate
the top of cement before
continuing with operations.
------------------------------------------------------------------------
[76 FR 64462, Oct. 18, 2011, as amended at 77 FR 50892, Aug. 22, 2012;
81 FR 26019, Apr. 29, 2016]
Diverter System Requirements
Sec. 250.430 When must I install a diverter system?
You must install a diverter system before you drill a conductor or
surface hole. The diverter system consists of a diverter sealing
element, diverter lines, and control systems. You must design, install,
use, maintain, and test the diverter system to ensure proper diversion
of gases, water, drilling fluid, and other materials away from
facilities and personnel.
Sec. 250.431 What are the diverter design and installation requirements?
You must design and install your diverter system to:
(a) Use diverter spool outlets and diverter lines that have a
nominal diameter of at least 10 inches for surface wellhead
configurations and at least 12 inches for floating drilling operations;
(b) Use dual diverter lines arranged to provide for downwind
diversion capability;
(c) Use at least two diverter control stations. One station must be
on the drilling floor. The other station must be in a readily accessible
location away from the drilling floor;
(d) Use only remote-controlled valves in the diverter lines. All
valves in the diverter system must be full-opening. You may not install
manual or butterfly valves in any part of the diverter system;
(e) Minimize the number of turns (only one 90-degree turn allowed
for each line for bottom-founded drilling units) in the diverter lines,
maximize the radius of curvature of turns, and target all right angles
and sharp turns;
(f) Anchor and support the entire diverter system to prevent
whipping and vibration; and
(g) Protect all diverter-control instruments and lines from possible
damage by thrown or falling objects.
Sec. 250.432 How do I obtain a departure to diverter design
and installation requirements?
The table below describes possible departures from the diverter
requirements and the conditions required for each departure. To obtain
one of these departures, you must have discussed the departure in your
APD and received approval from the District Manager.
------------------------------------------------------------------------
If you want a departure to: Then you must . . .
------------------------------------------------------------------------
(a) Use flexible hose for diverter lines Use flexible hose that has
instead of rigid pipe, integral end couplings.
(b) Use only one spool outlet for your (1) Have branch lines that
diverter system, meet the minimum internal
diameter requirements; and
(2) Provide downwind
diversion capability.
(c) Use a spool with an outlet with an Use a spool that has dual
internal diameter of less than 10 inches outlets with an internal
on a surface wellhead, diameter of at least 8
inches.
[[Page 102]]
(d) Use a single diverter line for Maintain an appropriate
floating drilling operations on a vessel heading to provide
dynamically positioned drillship, for downwind diversion.
------------------------------------------------------------------------
Sec. 250.433 What are the diverter actuation and testing requirements?
When you install the diverter system, you must actuate the diverter
sealing element, diverter valves, and diverter-control systems and
control stations. You must also flow-test the vent lines.
(a) For drilling operations with a surface wellhead configuration,
you must actuate the diverter system at least once every 24-hour period
after the initial test. After you have nippled up on conductor casing,
you must pressure-test the diverter-sealing element and diverter valves
to a minimum of 200 psi. While the diverter is installed, you must
conduct subsequent pressure tests within 7 days after the previous test.
(b) For floating drilling operations with a subsea BOP stack, you
must actuate the diverter system within 7 days after the previous
actuation.
(c) You must alternate actuations and tests between control
stations.
Sec. 250.434 What are the recordkeeping requirements for diverter
actuations and tests?
You must record the time, date, and results of all diverter
actuations and tests in the driller's report. In addition, you must:
(a) Record the diverter pressure test on a pressure chart;
(b) Require your onsite representative to sign and date the pressure
test chart;
(c) Identify the control station used during the test or actuation;
(d) Identify problems or irregularities observed during the testing
or actuations and record actions taken to remedy the problems or
irregularities; and
(e) Retain all pressure charts and reports pertaining to the
diverter tests and actuations at the facility for the duration of
drilling the well.
Sec. Sec. 250.440--250.451 [Reserved]
Sec. 250.452 What are the real-time monitoring requirements
for Arctic OCS exploratory drilling operations?
(a) When conducting exploratory drilling operations on the Arctic
OCS, you must gather and monitor real-time data using an independent,
automatic, and continuous monitoring system capable of recording,
storing, and transmitting data regarding the following:
(1) The BOP control system;
(2) The well's fluid handling systems on the rig; and
(3) The well's downhole conditions as monitored by a downhole
sensing system, when such a system is installed.
(b) During well operations, you must transmit the data identified in
paragraph (a) of this section as they are gathered, barring
unforeseeable or unpreventable interruptions in transmission, and have
the capability to monitor the data onshore, using qualified personnel.
Onshore personnel who monitor real-time data must have the capability to
contact rig personnel during operations. After well operations, you must
store the data at a designated location for recordkeeping purposes as
required in Sec. Sec. 250.740 and 250.741. You must provide BSEE with
access to your real-time monitoring data onshore upon request.
[81 FR 46561, July 15, 2016]
Drilling Fluid Requirements
Sec. 250.455 What are the general requirements for a drilling fluid program?
You must design and implement your drilling fluid program to prevent
the loss of well control. This program must address drilling fluid safe
practices, testing and monitoring equipment, drilling fluid quantities,
and drilling fluid-handling areas.
Sec. 250.456 What safe practices must the drilling fluid program follow?
Your drilling fluid program must include the following safe
practices:
[[Page 103]]
(a) Before starting out of the hole with drill pipe, you must
properly condition the drilling fluid. You must circulate a volume of
drilling fluid equal to the annular volume with the drill pipe just off-
bottom. You may omit this practice if documentation in the driller's
report shows:
(1) No indication of formation fluid influx before starting to pull
the drill pipe from the hole;
(2) The weight of returning drilling fluid is within 0.2 pounds per
gallon (1.5 pounds per cubic foot) of the drilling fluid entering the
hole; and
(3) Other drilling fluid properties are within the limits
established by the program approved in the APD.
(b) Record each time you circulate drilling fluid in the hole in the
driller's report;
(c) When coming out of the hole with drill pipe, you must fill the
annulus with drilling fluid before the hydrostatic pressure decreases by
75 psi, or every five stands of drill pipe, whichever gives a lower
decrease in hydrostatic pressure. You must calculate the number of
stands of drill pipe and drill collars that you may pull before you must
fill the hole. You must also calculate the equivalent drilling fluid
volume needed to fill the hole. Both sets of numbers must be posted near
the driller's station. You must use a mechanical, volumetric, or
electronic device to measure the drilling fluid required to fill the
hole;
(d) You must run and pull drill pipe and downhole tools at
controlled rates so you do not swab or surge the well;
(e) When there is an indication of swabbing or influx of formation
fluids, you must take appropriate measures to control the well. You must
circulate and condition the well, on or near-bottom, unless well or
drilling-fluid conditions prevent running the drill pipe back to the
bottom;
(f) You must calculate and post near the driller's console the
maximum pressures that you may safely contain under a shut-in BOP for
each casing string. The pressures posted must consider the surface
pressure at which the formation at the shoe would break down, the rated
working pressure of the BOP stack, and 70 percent of casing burst (or
casing test as approved by the District Manager). As a minimum, you must
post the following two pressures:
(1) The surface pressure at which the shoe would break down. This
calculation must consider the current drilling fluid weight in the hole;
and
(2) The lesser of the BOP's rated working pressure or 70 percent of
casing-burst pressure (or casing test otherwise approved by the District
Manager);
(g) You must install an operable drilling fluid-gas separator and
degasser before you begin drilling operations. You must maintain this
equipment throughout the drilling of the well;
(h) Before pulling drill-stem test tools from the hole, you must
circulate or reverse-circulate the test fluids in the hole. If
circulating out test fluids is not feasible, you may bullhead test
fluids out of the drill-stem test string and tools with an appropriate
kill weight fluid;
(i) When circulating, you must test the drilling fluid at least once
each tour, or more frequently if conditions warrant. Your tests must
conform to industry-accepted practices and include density, viscosity,
and gel strength; hydrogenion concentration; filtration; and any other
tests the District Manager requires for monitoring and maintaining
drilling fluid quality, prevention of downhole equipment problems and
for kick detection. You must record the results of these tests in the
drilling fluid report; and
(j) In areas where permafrost and/or hydrate zones are present or
may be present, you must control drilling fluid temperatures to drill
safely through those zones.
[76 FR 64462, Oct. 18, 2011, as amended at 77 FR 50894, Aug. 22, 2012;
81 FR 26020, Apr. 29, 2016]
Sec. 250.457 What equipment is required to monitor drilling fluids?
Once you establish drilling fluid returns, you must install and
maintain the following drilling fluid-system monitoring equipment
throughout subsequent drilling operations. This equipment must have the
following indicators on the rig floor:
(a) Pit level indicator to determine drilling fluid-pit volume gains
and
[[Page 104]]
losses. This indicator must include both a visual and an audible warning
device;
(b) Volume measuring device to accurately determine drilling fluid
volumes required to fill the hole on trips;
(c) Return indicator devices that indicate the relationship between
drilling fluid-return flow rate and pump discharge rate. This indicator
must include both a visual and an audible warning device; and
(d) Gas-detecting equipment to monitor the drilling fluid returns.
The indicator may be located in the drilling fluid-logging compartment
or on the rig floor. If the indicators are only in the logging
compartment, you must continually man the equipment and have a means of
immediate communication with the rig floor. If the indicators are on the
rig floor only, you must install an audible alarm.
Sec. 250.458 What quantities of drilling fluids are required?
(a) You must use, maintain, and replenish quantities of drilling
fluid and drilling fluid materials at the drill site as necessary to
ensure well control. You must determine those quantities based on known
or anticipated drilling conditions, rig storage capacity, weather
conditions, and estimated time for delivery.
(b) You must record the daily inventories of drilling fluid and
drilling fluid materials, including weight materials and additives in
the drilling fluid report.
(c) If you do not have sufficient quantities of drilling fluid and
drilling fluid material to maintain well control, you must suspend
drilling operations.
Sec. 250.459 What are the safety requirements for drilling
fluid-handling areas?
You must classify drilling fluid-handling areas according to API RP
500, Recommended Practice for Classification of Locations for Electrical
Installations at Petroleum Facilities, Classified as Class I, Division 1
and Division 2 (as incorporated by reference in Sec. 250.198); or API
RP 505, Recommended Practice for Classification of Locations for
Electrical Installations at Petroleum Facilities, Classified as Class 1,
Zone 0, Zone 1, and Zone 2 (as incorporated by reference in Sec.
250.198). In areas where dangerous concentrations of combustible gas may
accumulate, you must install and maintain a ventilation system and gas
monitors. Drilling fluid-handling areas must have the following safety
equipment:
(a) A ventilation system capable of replacing the air once every 5
minutes or 1.0 cubic feet of air-volume flow per minute, per square foot
of area, whichever is greater. In addition:
(1) If natural means provide adequate ventilation, then a mechanical
ventilation system is not necessary;
(2) If a mechanical system does not run continuously, then it must
activate when gas detectors indicate the presence of 1 percent or more
of combustible gas by volume; and
(3) If discharges from a mechanical ventilation system may be
hazardous, then you must maintain the drilling fluid-handling area at a
negative pressure. You must protect the negative pressure area by using
at least one of the following: a pressure-sensitive alarm, open-door
alarms on each access to the area, automatic door-closing devices, air
locks, or other devices approved by the District Manager;
(b) Gas detectors and alarms except in open areas where adequate
ventilation is provided by natural means. You must test and recalibrate
gas detectors quarterly. No more than 90 days may elapse between tests;
(c) Explosion-proof or pressurized electrical equipment to prevent
the ignition of explosive gases. Where you use air for pressuring
equipment, you must locate the air intake outside of and as far as
practicable from hazardous areas; and
(d) Alarms that activate when the mechanical ventilation system
fails.
Other Drilling Requirements
Sec. 250.460 What are the requirements for conducting a well test?
(a) If you intend to conduct a well test, you must include your
projected plans for the test with your APD (form BSEE-0123) or in an
Application for Permit to Modify (APM) (form BSEE-0124). Your plans must
include at least the following information:
[[Page 105]]
(1) Estimated flowing and shut-in tubing pressures;
(2) Estimated flow rates and cumulative volumes;
(3) Time duration of flow, buildup, and drawdown periods;
(4) Description and rating of surface and subsurface test equipment;
(5) Schematic drawing, showing the layout of test equipment;
(6) Description of safety equipment, including gas detectors and
fire-fighting equipment;
(7) Proposed methods to handle or transport produced fluids; and
(8) Description of the test procedures.
(b) You must give the District Manager at least 24-hours notice
before starting a well test.
Sec. 250.461 What are the requirements for directional
and inclination surveys?
For this subpart, BSEE classifies a well as vertical if the
calculated average of inclination readings does not exceed 3 degrees
from the vertical.
(a) Survey requirements for a vertical well. (1) You must conduct
inclination surveys on each vertical well and record the results. Survey
intervals may not exceed 1,000 feet during the normal course of
drilling;
(2) You must also conduct a directional survey that provides both
inclination and azimuth, and digitally record the results in electronic
format:
(i) Within 500 feet of setting surface or intermediate casing;
(ii) Within 500 feet of setting any liner; and
(iii) When you reach total depth.
(b) Survey requirements for directional well. You must conduct
directional surveys on each directional well and digitally record the
results. Surveys must give both inclination and azimuth at intervals not
to exceed 500 feet during the normal course of drilling. Intervals
during angle-changing portions of the hole may not exceed 100 feet.
(c) Measurement while drilling. You may use measurement-while-
drilling technology if it meets the requirements of this section.
(d) Composite survey requirements. (1) Your composite directional
survey must show the interval from the bottom of the conductor casing to
total depth. In the absence of conductor casing, the survey must show
the interval from the bottom of the drive or structural casing to total
depth; and
(2) You must correct all surveys to Universal-Transverse-Mercator-
Grid-north or Lambert-Grid-north after making the magnetic-to-true-north
correction. Surveys must show the magnetic and grid corrections used and
include a listing of the directionally computed inclinations and
azimuths.
(e) If you drill within 500 feet of an adjacent lease, the Regional
Supervisor may require you to furnish a copy of the well's directional
survey to the affected leaseholder. This could occur when the adjoining
leaseholder requests a copy of the survey for the protection of
correlative rights.
Sec. 250.462 What are the source control, containment,
and collocated equipment requirements?
For drilling operations using a subsea BOP or surface BOP on a
floating facility, you must have the ability to control or contain a
blowout event at the sea floor.
(a) To determine your required source control and containment
capabilities you must do the following:
(1) Consider a scenario of the wellbore fully evacuated to reservoir
fluids, with no restrictions in the well.
(2) Evaluate the performance of the well as designed to determine if
a full shut-in can be achieved without having reservoir fluids broach to
the sea floor. If your evaluation indicates that the well can only be
partially shut-in, then you must determine your ability to flow and
capture the residual fluids to a surface production and storage system.
(b) You must have access to and the ability to deploy Source Control
and Containment Equipment (SCCE) and all other necessary supporting and
collocated equipment to regain control of the well. SCCE means the
capping stack, cap-and-flow system, containment dome, and/or other
subsea and surface devices, equipment, and vessels, which have the
collective purpose to control a spill source and stop the flow of fluids
into the environment or
[[Page 106]]
to contain fluids escaping into the environment. This SCCE, supporting
equipment, and collocated equipment must include, but is not limited to,
the following:
(1) Subsea containment and capture equipment, including containment
domes and capping stacks;
(2) Subsea utility equipment including hydraulic power sources and
hydrate control equipment;
(3) Collocated equipment including dispersant injection equipment;
(4) Riser systems;
(5) Remotely operated vehicles (ROVs);
(6) Capture vessels;
(7) Support vessels; and
(8) Storage facilities.
(c) You must submit a description of your source control and
containment capabilities to the Regional Supervisor and receive approval
before BSEE will approve your APD, Form BSEE-0123. The description of
your containment capabilities must contain the following:
(1) Your source control and containment capabilities for controlling
and containing a blowout event at the seafloor;
(2) A discussion of the determination required in paragraph (a) of
this section; and
(3) Information showing that you have access to and the ability to
deploy all equipment required by paragraph (b) of this section.
(d) You must contact the District Manager and Regional Supervisor
for reevaluation of your source control and containment capabilities if
your:
(1) Well design changes; or
(2) Approved source control and containment equipment is out of
service.
(e) You must maintain, test, and inspect the source control,
containment, and collocated equipment identified in the following table
according to these requirements:
------------------------------------------------------------------------
Requirements, you Additional
Equipment must: information
------------------------------------------------------------------------
(1) Capping stacks,......... (i) Function test Pressure containing
all pressure critical components
containing critical are those
components on a components that
quarterly frequency will experience
(not to exceed 104 wellbore pressure
days between during a shut-in
tests), after being
functioned.
(ii) Pressure test Pressure containing
pressure containing critical components
critical components are those
on a bi-annual components that
basis, but not will experience
later than 210 days wellbore pressure
from the last during a shut-in.
pressure test. All These components
pressure testing include, but are
must be witnessed not limited to: All
by BSEE (if blind rams,
available) and a wellhead
BSEE-approved connectors, and
verification outlet valves.
organization.
(iii) Notify BSEE at
least 21 days prior
to commencing any
pressure testing.
(2) Production safety (i) Meet or exceed
systems used for flow and the requirements
capture operations, set forth in Sec.
Sec. 250.800
through 250.808,
excluding required
equipment that
would be installed
below the wellhead
or that is not
applicable to the
cap and flow
system.
(ii) Have all
equipment unique to
containment
operations
available for
inspection at all
times.
(3) Subsea utility Have all referenced Subsea utility
equipment,. containment equipment includes,
equipment available but is not limited
for inspection at to: Hydraulic power
all times. sources, debris
removal, and
hydrate control
equipment.
(4) Collocated equipment,... Have equipment Collocated equipment
available for includes, but is
inspection at all not limited to,
times. dispersant
injection equipment
and other subsea
control equipment.
------------------------------------------------------------------------
[81 FR 26020, Apr. 29, 2016]
Sec. 250.463 Who establishes field drilling rules?
(a) The District Manager may establish field drilling rules
different from the requirements of this subpart when geological and
engineering information shows that specific operating requirements are
appropriate. You must comply with field drilling rules and
nonconflicting requirements of this subpart. The District Manager may
amend or cancel field drilling rules at any time.
(b) You may request the District Manager to establish, amend, or
cancel field drilling rules.
[[Page 107]]
Applying for a Permit To Modify and Well Records
Sec. 250.465 When must I submit an Application for Permit to Modify (APM)
or an End of Operations Report to BSEE?
(a) You must submit an APM (form BSEE-0124) or an End of Operations
Report (form BSEE-0125) and other materials to the Regional Supervisor
as shown in the following table. You must also submit a public
information copy of each form.
------------------------------------------------------------------------
When you . . . Then you must . . . And . . .
------------------------------------------------------------------------
(1) Intend to revise Submit form BSEE-0124 Receive written or oral
your drilling plan, or request oral approval from the
change major drilling approval, District Manager before
equipment, or you begin the intended
plugback, operation. If you get an
approval, you must
submit form BSEE-0124 no
later than the end of
the 3rd business day
following the oral
approval. In all cases,
or you must meet the
additional requirements
in paragraph (b) of this
section.
(2) Determine a well's Immediately Submit a Submit a plat certified
final surface form BSEE-0124, by a registered land
location, water surveyor that meets the
depth, and the rotary requirements of Sec.
kelly bushing 250.412.
elevation,
(3) Move a drilling Submit forms BSEE- Submit appropriate copies
unit from a wellbore 0124 and BSEE-0125 of the well records.
before completing a within 30 days after
well, the suspension of
wellbore operations,
------------------------------------------------------------------------
(b) If you intend to perform any of the actions specified in
paragraph (a)(1) of this section, you must meet the following additional
requirements:
(1) Your APM (Form BSEE-0124) must contain a detailed statement of
the proposed work that would materially change from the approved APD.
The submission of your APM must be accompanied by payment of the service
fee listed in Sec. 250.125;
(2) Your form BSEE-0124 must include the present status of the well,
depth of all casing strings set to date, well depth, present production
zones and productive capability, and all other information specified;
and
(3) Within 30 days after completing this work, you must submit an
End of Operations Report (EOR), Form BSEE-0125, as required under Sec.
250.744.
[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 26021, Apr. 29, 2016]
Sec. Sec. 250.466--250.469 [Reserved]
Additional Arctic OCS Requirements
Source: 81 FR 46561, July 15, 2016, unless otherwise noted.
Sec. 250.470 What additional information must I submit with my APD
for Arctic OCS exploratory drilling operations?
In addition to complying with all other applicable requirements
included in this part, you must provide with your APD all of the
following information pertaining to your proposed Arctic OCS exploratory
drilling:
(a) A detailed description of:
(1) The environmental, meteorological, and oceanic conditions you
expect to encounter at the well site(s);
(2) How you will prepare your equipment, materials, and drilling
unit for service in the conditions identified in paragraph (a)(1) of
this section, and how your drilling unit will be in compliance with the
requirements of Sec. 250.713.
(b) A detailed description of all operations necessary in Arctic OCS
conditions to transition the rig from being under way to conducting
drilling operations and from ending drilling operations to being under
way, as well as any anticipated repair and maintenance plans for the
drilling unit and equipment. You should include, among other things, a
description of how you plan to:
(1) Recover the subsea equipment, including the marine riser and the
lower marine riser package;
[[Page 108]]
(2) Recover the BOP;
(3) Recover the auxiliary sub-sea controls and template;
(4) Lay down the drill pipe and secure the drill pipe and marine
riser;
(5) Secure the drilling equipment;
(6) Transfer the fluids for transport or disposal;
(7) Secure ancillary equipment like the draw works and lines;
(8) Refuel or transfer fuel;
(9) Offload waste;
(10) Recover the Remotely Operated Vehicles;
(11) Pick up the oil spill prevention booms and equipment; and
(12) Offload the drilling crew.
(c) A description of well-specific drilling objectives, timelines,
and updated contingency plans for temporary abandonment of the well,
including but not limited to the following:
(1) When you will spud the particular well (i.e., begin drilling
operations at the well site) identified in the APD;
(2) How long you will take to drill the well;
(3) Anticipated depths and geologic targets, with timelines;
(4) When you expect to set and cement each string of casing;
(5) When and how you would log the well;
(6) Your plans to test the well;
(7) When and how you intend to abandon the well, including
specifically addressing your plans for how to move the rig off location
and how you will meet the requirements of Sec. 250.720(c);
(8) A description of what equipment and vessels will be involved in
the process of temporarily abandoning the well due to ice; and
(9) An explanation of how you will integrate these elements into
your overall program.
(d) A detailed description of your weather and ice forecasting
capability for all phases of the drilling operation, including:
(1) How you will ensure your continuous awareness of potential
weather and ice hazards at, and during transition between, wells;
(2) Your plans for managing ice hazards and responding to weather
events; and
(3) Verification that you have the capabilities described in your
BOEM-approved EP.
(e) A detailed description of how you will comply with the
requirements of Sec. 250.472.
(f) A statement that you own, or have a contract with a provider
for, source control and containment equipment (SCCE), which is capable
of controlling and/or containing a worst case discharge, as described in
your BOEM-approved EP, when proposing to use a MODU to conduct
exploratory drilling operations on the Arctic OCS. The following
information must be included in your SCCE submittal:
(1) A detailed description of your or your contractor's SCCE
capability to stop or contain flow from an out-of-control well,
including your operating assumptions and limitations; your access to and
ability to deploy, in accordance with Sec. 250.471, all necessary SCCE;
and your ability to evaluate the performance of the well design to
determine how you can achieve a full shut-in without having reservoir
fluids discharged into the environment;
(2) An inventory of the local and regional SCCE, supplies, and
services that you own or for which you have a contract with a provider.
You must identify each supplier of such equipment and services and
provide their locations and telephone numbers;
(3) Where applicable, proof of contracts or membership agreements
with cooperatives, service providers, or other contractors who will
provide you with the necessary SCCE or related supplies and services if
you do not possess them. The contract or membership agreement must
include provisions for ensuring the availability of the personnel and/or
equipment on a 24-hour per day basis while you are drilling below or
working below the surface casing;
(4) A detailed description of the procedures you plan to use to
inspect, test, and maintain your SCCE; and
(5) A detailed description of your plan to ensure that all members
of your operating team, who are responsible for operating the SCCE, have
received the necessary training to deploy and operate such equipment in
Arctic
[[Page 109]]
OCS conditions and demonstrate ongoing proficiency in source control
operations. You must also identify and include the dates of prior and
planned training.
(g) Where it does not conflict with other requirements of this
subpart, and except as provided in paragraphs (g)(1) through (11) of
this section, you must comply with the requirements of API RP 2N, Third
Edition ``Planning, Designing, and Constructing Structures and Pipelines
for Arctic Conditions'' (incorporated by reference as specified in Sec.
250.198), and provide a detailed description of how you will utilize the
best practices included in API RP 2N during your exploratory drilling
operations. You are not required to incorporate the following sections
of API RP 2N into your drilling operations:
(1) Sections 6.6.3 through 6.6.4;
(2) The foundation recommendations in Section 8.4;
(3) Section 9.6;
(4) The recommendations for permanently moored systems in Section
9.7;
(5) The recommendations for pile foundations in Section 9.10;
(6) Section 12;
(7) Section 13.2.1;
(8) Sections 13.8.1.1, 13.8.2.1, 13.8.2.2, 13.8.2.4 through
13.8.2.7;
(9) Sections 13.9.1, 13.9.2, 13.9.4 through 13.9.8;
(10) Sections 14 through 16; and
(11) Section 18.
Sec. 250.471 What are the requirements for Arctic OCS source
control and containment?
You must meet the following requirements for all exploration wells
drilled on the Arctic OCS:
(a) If you use a MODU when drilling below or working below the
surface casing, you must have access to the following SCCE capable of
stopping or capturing the flow of an out-of-control well:
(1) A capping stack, positioned to ensure that it will arrive at the
well location within 24 hours after a loss of well control and can be
deployed as directed by the Regional Supervisor pursuant to paragraph
(h) of this section;
(2) A cap and flow system, positioned to ensure that it will arrive
at the well location within 7 days after a loss of well control and can
be deployed as directed by the Regional Supervisor pursuant to paragraph
(h) of this section. The cap and flow system must be designed to capture
at least the amount of hydrocarbons equivalent to the calculated worst
case discharge rate referenced in your BOEM-approved EP; and
(3) A containment dome, positioned to ensure that it will arrive at
the well location within 7 days after a loss of well control and can be
deployed as directed by the Regional Supervisor pursuant to paragraph
(h) of this section. The containment dome must have the capacity to pump
fluids without relying on buoyancy.
(b) You must conduct a monthly stump test of dry-stored capping
stacks. If you use a pre-positioned capping stack, you must conduct a
stump test prior to each installation on each well.
(c) As required by Sec. 250.465(a), if you propose to change your
well design, you must submit an APM. For Arctic OCS operations, your APM
must include a reevaluation of your SCCE capabilities for any new Worst
Case Discharge (WCD) rate, and a demonstration that your SCCE
capabilities will meet the criteria in Sec. 250.470(f) under the
changed well design.
(d) You must conduct tests or exercises of your SCCE, including
deployment of your SCCE, when directed by the Regional Supervisor.
(e) You must maintain records pertaining to testing, inspection, and
maintenance of your SCCE for at least 10 years and make the records
available to any authorized BSEE representative upon request.
(f) You must maintain records pertaining to the use of your SCCE
during testing, training, and deployment activities for at least 3 years
and make the records available to any authorized BSEE representative
upon request.
(g) Upon a loss of well control, you must initiate transit of all
SCCE identified in paragraph (a) of this section to the well.
(h) You must deploy and use SCCE when directed by the Regional
Supervisor.
(i) Operators may request approval of alternate procedures or
equipment to
[[Page 110]]
the SCCE requirements of subparagraph (a) of this section in accordance
with Sec. 250.141. The operator must show and document that the
alternate procedures or equipment will provide a level of safety and
environmental protection that will meet or exceed the level of safety
and environmental protection required by BSEE regulations, including
demonstrating that the alternate procedures or equipment will be capable
of stopping or capturing the flow of an out-of-control well.
Sec. 250.472 What are the relief rig requirements for the Arctic OCS?
(a) In the event of a loss of well control, the Regional Supervisor
may direct you to drill a relief well using the relief rig able to kill
and permanently plug an out-of-control well as described in your APD.
Your relief rig must comply with all other requirements of this part
pertaining to drill rig characteristics and capabilities, and it must be
able to drill a relief well under anticipated Arctic OCS conditions.
(b) When you are drilling below or working below the surface casing
during Arctic OCS exploratory drilling operations, you must have access
to a relief rig, different from your primary drilling rig, staged in a
location such that it can arrive on site, drill a relief well, kill and
abandon the original well, and abandon the relief well prior to expected
seasonal ice encroachment at the drill site, but no later than 45 days
after the loss of well control.
(c) Operators may request approval of alternative compliance
measures to the relief rig requirement in accordance with Sec. 250.141.
The operator must show and document that the alternate compliance
measure will meet or exceed the level of safety and environmental
protection required by BSEE regulations, including demonstrating that
the alternate compliance measure will be able to kill and permanently
plug an out-of-control well.
Sec. 250.473 What must I do to protect health, safety, property,
and theenvironment while operating on the Arctic OCS?
In addition to the requirements set forth in Sec. 250.107, when
conducting exploratory drilling operations on the Arctic OCS, you must
protect health, safety, property, and the environment by using the
following:
(a) Equipment and materials that are rated or de-rated for service
under conditions that can be reasonably expected during your operations;
and
(b) Measures to address human factors associated with weather
conditions that can be reasonably expected during your operations
including, but not limited to, provision of proper attire and equipment,
construction of protected work spaces, and management of shifts.
Hydrogen Sulfide
Sec. 250.490 Hydrogen sulfide.
(a) What precautions must I take when operating in an H2S area? You
must:
(1) Take all necessary and feasible precautions and measures to
protect personnel from the toxic effects of H2S and to
mitigate damage to property and the environment caused by
H2S. You must follow the requirements of this section when
conducting drilling, well-completion/well-workover, and production
operations in zones with H2S present and when conducting
operations in zones where the presence of H2S is unknown. You
do not need to follow these requirements when operating in zones where
the absence of H2S has been confirmed; and
(2) Follow your approved contingency plan.
(b) Definitions. Terms used in this section have the following
meanings:
Facility means a vessel, a structure, or an artificial island used
for drilling, well-completion, well-workover, and/or production
operations.
H2S absent means:
(1) Drilling, logging, coring, testing, or producing operations have
confirmed the absence of H2S in concentrations that could
potentially result in atmospheric concentrations of 20 ppm or more of
H2S; or
(2) Drilling in the surrounding areas and correlation of geological
and seismic data with equivalent stratigraphic units have confirmed an
absence of H2S throughout the area to be drilled.
H2S present means that drilling, logging, coring, testing, or
producing operations have confirmed the presence
[[Page 111]]
of H2S in concentrations and volumes that could potentially
result in atmospheric concentrations of 20 ppm or more of
H2S.
H2S unknown means the designation of a zone or geologic formation
where neither the presence nor absence of H2S has been
confirmed.
Well-control fluid means drilling mud and completion or workover
fluid as appropriate to the particular operation being conducted.
(c) Classifying an area for the presence of H2S. You must:
(1) Request and obtain an approved classification for the area from
the Regional Supervisor before you begin operations. Classifications are
``H2S absent,'' H2S present,'' or ``H2S
unknown'';
(2) Submit your request with your application for permit to drill;
(3) Support your request with available information such as geologic
and geophysical data and correlations, well logs, formation tests, cores
and analysis of formation fluids; and
(4) Submit a request for reclassification of a zone when additional
data indicate a different classification is needed.
(d) What do I do if conditions change? If you encounter
H2S that could potentially result in atmospheric
concentrations of 20 ppm or more in areas not previously classified as
having H2S present, you must immediately notify BSEE and
begin to follow requirements for areas with H2S present.
(e) What are the requirements for conducting simultaneous
operations? When conducting any combination of drilling, well-
completion, well-workover, and production operations simultaneously, you
must follow the requirements in the section applicable to each
individual operation.
(f) Requirements for submitting an H2S Contingency Plan. Before you
begin operations, you must submit an H2S Contingency Plan to
the District Manager for approval. Do not begin operations before the
District Manager approves your plan. You must keep a copy of the
approved plan in the field, and you must follow the plan at all times.
Your plan must include:
(1) Safety procedures and rules that you will follow concerning
equipment, drills, and smoking;
(2) Training you provide for employees, contractors, and visitors;
(3) Job position and title of the person responsible for the overall
safety of personnel;
(4) Other key positions, how these positions fit into your
organization, and what the functions, duties, and responsibilities of
those job positions are;
(5) Actions that you will take when the concentration of
H2S in the atmosphere reaches 20 ppm, who will be responsible
for those actions, and a description of the audible and visual alarms to
be activated;
(6) Briefing areas where personnel will assemble during an H2S
alert. You must have at least two briefing areas on each facility and
use the briefing area that is upwind of the H2S source at any
given time;
(7) Criteria you will use to decide when to evacuate the facility
and procedures you will use to safely evacuate all personnel from the
facility by vessel, capsule, or lifeboat. If you use helicopters during
H2S alerts, describe the types of H2S emergencies
during which you consider the risk of helicopter activity to be
acceptable and the precautions you will take during the flights;
(8) Procedures you will use to safely position all vessels attendant
to the facility. Indicate where you will locate the vessels with respect
to wind direction. Include the distance from the facility and what
procedures you will use to safely relocate the vessels in an emergency;
(9) How you will provide protective-breathing equipment for all
personnel, including contractors and visitors;
(10) The agencies and facilities you will notify in case of a
release of H2S (that constitutes an emergency), how you will
notify them, and their telephone numbers. Include all facilities that
might be exposed to atmospheric concentrations of 20 ppm or more of
H2S;
(11) The medical personnel and facilities you will use if needed,
their addresses, and telephone numbers;
(12) H2S detector locations in production facilities
producing gas containing
[[Page 112]]
20 ppm or more of H2S. Include an ``H2S Detector
Location Drawing'' showing:
(i) All vessels, flare outlets, wellheads, and other equipment
handling production containing H2S;
(ii) Approximate maximum concentration of H2S in the gas
stream; and
(iii) Location of all H2S sensors included in your
contingency plan;
(13) Operational conditions when you expect to flare gas containing
H2S including the estimated maximum gas flow rate,
H2S concentration, and duration of flaring;
(14) Your assessment of the risks to personnel during flaring and
what precautionary measures you will take;
(15) Primary and alternate methods to ignite the flare and
procedures for sustaining ignition and monitoring the status of the
flare (i.e., ignited or extinguished);
(16) Procedures to shut off the gas to the flare in the event the
flare is extinguished;
(17) Portable or fixed sulphur dioxide (SO2)-detection
system(s) you will use to determine SO2 concentration and
exposure hazard when H2S is burned;
(18) Increased monitoring and warning procedures you will take when
the SO2 concentration in the atmosphere reaches 2 ppm;
(19) Personnel protection measures or evacuation procedures you will
initiate when the SO2 concentration in the atmosphere reaches
5 ppm;
(20) Engineering controls to protect personnel from SO2;
and
(21) Any special equipment, procedures, or precautions you will use
if you conduct any combination of drilling, well-completion, well-
workover, and production operations simultaneously.
(g) Training program: (1) When and how often do employees need to be
trained? All operators and contract personnel must complete an
H2S training program to meet the requirements of this
section:
(i) Before beginning work at the facility; and
(ii) Each year, within 1 year after completion of the previous
class.
(2) What training documentation do I need? For each individual
working on the platform, either:
(i) You must have documentation of this training at the facility
where the individual is employed; or
(ii) The employee must carry a training completion card.
(3) What training do I need to give to visitors and employees
previously trained on another facility?
(i) Trained employees or contractors transferred from another
facility must attend a supplemental briefing on your H2S
equipment and procedures before beginning duty at your facility;
(ii) Visitors who will remain on your facility more than 24 hours
must receive the training required for employees by paragraph (g)(4) of
this section; and
(iii) Visitors who will depart before spending 24 hours on the
facility are exempt from the training required for employees, but they
must, upon arrival, complete a briefing that includes:
(A) Information on the location and use of an assigned respirator;
practice in donning and adjusting the assigned respirator; information
on the safe briefing areas, alarm system, and hazards of H2S
and SO2; and
(B) Instructions on their responsibilities in the event of an
H2S release.
(4) What training must I provide to all other employees? You must
train all individuals on your facility on the:
(i) Hazards of H2S and of SO2 and the
provisions for personnel safety contained in the H2S
Contingency Plan;
(ii) Proper use of safety equipment which the employee may be
required to use;
(iii) Location of protective breathing equipment, H2S
detectors and alarms, ventilation equipment, briefing areas, warning
systems, evacuation procedures, and the direction of prevailing winds;
(iv) Restrictions and corrective measures concerning beards,
spectacles, and contact lenses in conformance with ANSI Z88.2, American
National Standard for Respiratory Protection (as specified in Sec.
250.198);
(v) Basic first-aid procedures applicable to victims of
H2S exposure. During all drills and training sessions, you
must address procedures for rescue and first aid for H2S
victims;
(vi) Location of:
[[Page 113]]
(A) The first-aid kit on the facility;
(B) Resuscitators; and
(C) Litter or other device on the facility.
(vii) Meaning of all warning signals.
(5) Do I need to post safety information? You must prominently post
safety information on the facility and on vessels serving the facility
(i.e., basic first-aid, escape routes, instructions for use of life
boats, etc.).
(h) Drills. (1) When and how often do I need to conduct drills on
H2S safety discussions on the facility? You must:
(i) Conduct a drill for each person at the facility during normal
duty hours at least once every 7-day period. The drills must consist of
a dry-run performance of personnel activities related to assigned jobs.
(ii) At a safety meeting or other meetings of all personnel, discuss
drill performance, new H2S considerations at the facility,
and other updated H2S information at least monthly.
(2) What documentation do I need? You must keep records of
attendance for:
(i) Drilling, well-completion, and well-workover operations at the
facility until operations are completed; and
(ii) Production operations at the facility or at the nearest field
office for 1 year.
(i) Visual and audible warning systems: (1) How must I install wind
direction equipment? You must install wind-direction equipment in a
location visible at all times to individuals on or in the immediate
vicinity of the facility.
(2) When do I need to display operational danger signs, display
flags, or activate visual or audible alarms?
(i) You must display warning signs at all times on facilities with
wells capable of producing H2S and on facilities that process
gas containing H2S in concentrations of 20 ppm or more.
(ii) In addition to the signs, you must activate audible alarms and
display flags or activate flashing red lights when atmospheric
concentration of H2S reaches 20 ppm.
(3) What are the requirements for signs? Each sign must be a high-
visibility yellow color with black lettering as follows:
------------------------------------------------------------------------
Letter height Wording
------------------------------------------------------------------------
12 inches................................. Danger.
Poisonous Gas.
Hydrogen Sulfide.
7 inches.................................. Do not approach if red flag
is flying.
(Use appropriate wording at right)........ Do not approach if red
lights are flashing.
------------------------------------------------------------------------
(4) May I use existing signs? You may use existing signs containing
the words ``Danger-Hydrogen Sulfide-H2S,'' provided the words
``Poisonous Gas. Do Not Approach if Red Flag is Flying'' or ``Red Lights
are Flashing'' in lettering of a minimum of 7 inches in height are
displayed on a sign immediately adjacent to the existing sign.
(5) What are the requirements for flashing lights or flags? You must
activate a sufficient number of lights or hoist a sufficient number of
flags to be visible to vessels and aircraft. Each light must be of
sufficient intensity to be seen by approaching vessels or aircraft any
time it is activated (day or night). Each flag must be red, rectangular,
a minimum width of 3 feet, and a minimum height of 2 feet.
(6) What is an audible warning system? An audible warning system is
a public address system or siren, horn, or other similar warning device
with a unique sound used only for H2S.
(7) Are there any other requirements for visual or audible warning
devices? Yes, you must:
(i) Illuminate all signs and flags at night and under conditions of
poor visibility; and
(ii) Use warning devices that are suitable for the electrical
classification of the area.
(8) What actions must I take when the alarms are activated? When the
warning devices are activated, the designated responsible persons must
inform personnel of the level of danger and issue instructions on the
initiation of appropriate protective measures.
(j) H2S-detection and H2S monitoring
equipment: (1) What are the requirements for an H2S detection
system? An H2S detection system must:
(i) Be capable of sensing a minimum of 10 ppm of H2S in
the atmosphere; and
(ii) Activate audible and visual alarms when the concentration of
H2S in the atmosphere reaches 20 ppm.
[[Page 114]]
(2) Where must I have sensors for drilling, well-completion, and
well-workover operations? You must locate sensors at the:
(i) Bell nipple;
(ii) Mud-return line receiver tank (possum belly);
(iii) Pipe-trip tank;
(iv) Shale shaker;
(v) Well-control fluid pit area;
(vi) Driller's station;
(vii) Living quarters; and
(viii) All other areas where H2S may accumulate.
(3) Do I need mud sensors? The District Manager may require mud
sensors in the possum belly in cases where the ambient air sensors in
the mud-return system do not consistently detect the presence of
H2S.
(4) How often must I observe the sensors? During drilling, well-
completion and well-workover operations, you must continuously observe
the H2S levels indicated by the monitors in the work areas
during the following operations:
(i) When you pull a wet string of drill pipe or workover string;
(ii) When circulating bottoms-up after a drilling break;
(iii) During cementing operations;
(iv) During logging operations; and
(v) When circulating to condition mud or other well-control fluid.
(5) Where must I have sensors for production operations? On a
platform where gas containing H2S of 20 ppm or greater is
produced, processed, or otherwise handled:
(i) You must have a sensor in rooms, buildings, deck areas, or low-
laying deck areas not otherwise covered by paragraph (j)(2) of this
section, where atmospheric concentrations of H2S could reach
20 ppm or more. You must have at least one sensor per 400 square feet of
deck area or fractional part of 400 square feet;
(ii) You must have a sensor in buildings where personnel have their
living quarters;
(iii) You must have a sensor within 10 feet of each vessel,
compressor, wellhead, manifold, or pump, which could release enough
H2S to result in atmospheric concentrations of 20 ppm at a
distance of 10 feet from the component;
(iv) You may use one sensor to detect H2S around multiple
pieces of equipment, provided the sensor is located no more than 10 feet
from each piece, except that you need to use at least two sensors to
monitor compressors exceeding 50 horsepower;
(v) You do not need to have sensors near wells that are shut in at
the master valve and sealed closed;
(vi) When you determine where to place sensors, you must consider:
(A) The location of system fittings, flanges, valves, and other
devices subject to leaks to the atmosphere; and
(B) Design factors, such as the type of decking and the location of
fire walls; and
(vii) The District Manager may require additional sensors or other
monitoring capabilities, if warranted by site specific conditions.
(6) How must I functionally test the H2S Detectors? (i) Personnel
trained to calibrate the particular H2S detector equipment
being used must test detectors by exposing them to a known concentration
in the range of 10 to 30 ppm of H2S.
(ii) If the results of any functional test are not within 2 ppm or
10 percent, whichever is greater, of the applied concentration,
recalibrate the instrument.
(7) How often must I test my detectors? (i) When conducting
drilling, drill stem testing, well-completion, or well-workover
operations in areas classified as H2S present or
H2S unknown, test all detectors at least once every 24 hours.
When drilling, begin functional testing before the bit is 1,500 feet
(vertically) above the potential H2S zone.
(ii) When conducting production operations, test all detectors at
least every 14 days between tests.
(iii) If equipment requires calibration as a result of two
consecutive functional tests, the District Manager may require that
H2S-detection and H2S-monitoring equipment be
functionally tested and calibrated more frequently.
(8) What documentation must I keep? (i) You must maintain records of
testing and calibrations (in the drilling or production operations
report, as applicable) at the facility to show the present status and
history of each device, including dates and details concerning:
[[Page 115]]
(A) Installation;
(B) Removal;
(C) Inspection;
(D) Repairs;
(E) Adjustments; and
(F) Reinstallation.
(ii) Records must be available for inspection by BSEE personnel.
(9) What are the requirements for nearby vessels? If vessels are
stationed overnight alongside facilities in areas of H2S
present or H2S unknown, you must equip vessels with an
H2S-detection system that activates audible and visual alarms
when the concentration of H2S in the atmosphere reaches 20
ppm. This requirement does not apply to vessels positioned upwind and at
a safe distance from the facility in accordance with the positioning
procedure described in the approved H2S Contingency Plan.
(10) What are the requirements for nearby facilities? The District
Manager may require you to equip nearby facilities with portable or
fixed H2S detector(s) and to test and calibrate those
detectors. To invoke this requirement, the District Manager will
consider dispersion modeling results from a possible release to
determine if 20 ppm H2S concentration levels could be
exceeded at nearby facilities.
(11) What must I do to protect against SO2 if I burn gas containing
H2S? You must:
(i) Monitor the SO2concentration in the air with portable
or strategically placed fixed devices capable of detecting a minimum of
2 ppm of SO2;
(ii) Take readings at least hourly and at any time personnel detect
SO2 odor or nasal irritation;
(iii) Implement the personnel protective measures specified in the
H2S Contingency Plan if the SO2 concentration in
the work area reaches 2 ppm; and
(iv) Calibrate devices every 3 months if you use fixed or portable
electronic sensing devices to detect SO2.
(12) May I use alternative measures? You may follow alternative
measures instead of those in paragraph (j)(11) of this section if you
propose and the Regional Supervisor approves the alternative measures.
(13) What are the requirements for protective-breathing equipment?
In an area classified as H2S present or H2S
unknown, you must:
(i) Provide all personnel, including contractors and visitors on a
facility, with immediate access to self-contained pressure-demand-type
respirators with hoseline capability and breathing time of at least 15
minutes.
(ii) Design, select, use, and maintain respirators in conformance
with ANSI Z88.2 (as specified in Sec. 250.198).
(iii) Make available at least two voice-transmission devices, which
can be used while wearing a respirator, for use by designated personnel.
(iv) Make spectacle kits available as needed.
(v) Store protective-breathing equipment in a location that is
quickly and easily accessible to all personnel.
(vi) Label all breathing-air bottles as containing breathing-quality
air for human use.
(vii) Ensure that vessels attendant to facilities carry appropriate
protective-breathing equipment for each crew member. The District
Manager may require additional protective-breathing equipment on certain
vessels attendant to the facility.
(viii) During H2S alerts, limit helicopter flights to and
from facilities to the conditions specified in the H2S
Contingency Plan. During authorized flights, the flight crew and
passengers must use pressure-demand-type respirators. You must train all
members of flight crews in the use of the particular type(s) of
respirator equipment made available.
(ix) As appropriate to the particular operation(s), (production,
drilling, well-completion or well-workover operations, or any
combination of them), provide a system of breathing-air manifolds,
hoses, and masks at the facility and the briefing areas. You must
provide a cascade air-bottle system for the breathing-air manifolds to
refill individual protective-breathing apparatus bottles. The cascade
air-bottle system may be recharged by a high-pressure compressor
suitable for providing breathing-quality air, provided the compressor
suction is located in an uncontaminated atmosphere.
(k) Personnel safety equipment: (1) What additional personnel-safety
[[Page 116]]
equipment do I need? You must ensure that your facility has:
(i) Portable H2S detectors capable of detecting a 10 ppm
concentration of H2S in the air available for use by all
personnel;
(ii) Retrieval ropes with safety harnesses to retrieve incapacitated
personnel from contaminated areas;
(iii) Chalkboards and/or note pads for communication purposes
located on the rig floor, shale-shaker area, the cement-pump rooms,
well-bay areas, production processing equipment area, gas compressor
area, and pipeline-pump area;
(iv) Bull horns and flashing lights; and
(v) At least three resuscitators on manned facilities, and a number
equal to the personnel on board, not to exceed three, on normally
unmanned facilities, complete with face masks, oxygen bottles, and spare
oxygen bottles.
(2) What are the requirements for ventilation equipment? You must:
(i) Use only explosion-proof ventilation devices;
(ii) Install ventilation devices in areas where H2S or
SO2 may accumulate; and
(iii) Provide movable ventilation devices in work areas. The movable
ventilation devices must be multidirectional and capable of dispersing
H2S or SO2 vapors away from working personnel.
(3) What other personnel safety equipment do I need? You must have
the following equipment readily available on each facility:
(i) A first-aid kit of appropriate size and content for the number
of personnel on the facility; and
(ii) At least one litter or an equivalent device.
(l) Do I need to notify BSEE in the event of an H2S release? You
must notify BSEE without delay in the event of a gas release which
results in a 15-minute time-weighted average atmospheric concentration
of H2S of 20 ppm or more anywhere on the OCS facility. You
must report these gas releases to the District Manager immediately by
oral communication, with a written follow-up report within 15 days,
pursuant to Sec. Sec. 250.188 through 250.190.
(m) Do I need to use special drilling, completion and workover
fluids or procedures? When working in an area classified as
H2S present or H2S unknown:
(1) You may use either water- or oil-base muds in accordance with
Sec. 250.300(b)(1).
(2) If you use water-base well-control fluids, and if ambient air
sensors detect H2S, you must immediately conduct either the
Garrett-Gas-Train test or a comparable test for soluble sulfides to
confirm the presence of H2S.
(3) If the concentration detected by air sensors in over 20 ppm,
personnel conducting the tests must don protective-breathing equipment
conforming to paragraph (j)(13) of this section.
(4) You must maintain on the facility sufficient quantities of
additives for the control of H2S, well-control fluid pH, and
corrosion equipment.
(i) Scavengers. You must have scavengers for control of
H2S available on the facility. When H2S is
detected, you must add scavengers as needed. You must suspend drilling
until the scavenger is circulated throughout the system.
(ii) Control pH. You must add additives for the control of pH to
water-base well-control fluids in sufficient quantities to maintain pH
of at least 10.0.
(iii) Corrosion inhibitors. You must add additives to the well-
control fluid system as needed for the control of corrosion.
(5) You must degas well-control fluids containing H2S at
the optimum location for the particular facility. You must collect the
gases removed and burn them in a closed flare system conforming to
paragraph (q)(6) of this section.
(n) What must I do in the event of a kick? In the event of a kick,
you must use one of the following alternatives to dispose of the well-
influx fluids giving consideration to personnel safety, possible
environmental damage, and possible facility well-equipment damage:
(1) Contain the well-fluid influx by shutting in the well and
pumping the fluids back into the formation.
(2) Control the kick by using appropriate well-control techniques to
prevent formation fracturing in an open hole within the pressure limits
of the
[[Page 117]]
well equipment (drill pipe, work string, casing, wellhead, BOP system,
and related equipment). The disposal of H2S and other gases
must be through pressurized or atmospheric mud-separator equipment
depending on volume, pressure and concentration of H2S. The
equipment must be designed to recover well-control fluids and burn the
gases separated from the well-control fluid. The well-control fluid must
be treated to neutralize H2S and restore and maintain the
proper quality.
(o) Well testing in a zone known to contain H2S. When testing a well
in a zone with H2S present, you must do all of the following:
(1) Before starting a well test, conduct safety meetings for all
personnel who will be on the facility during the test. At the meetings,
emphasize the use of protective-breathing equipment, first-aid
procedures, and the Contingency Plan. Only competent personnel who are
trained and are knowledgeable of the hazardous effects of H2S
must be engaged in these tests.
(2) Perform well testing with the minimum number of personnel in the
immediate vicinity of the rig floor and with the appropriate test
equipment to safely and adequately perform the test. During the test,
you must continuously monitor H2S levels.
(3) Not burn produced gases except through a flare which meets the
requirements of paragraph (q)(6) of this section. Before flaring gas
containing H2S, you must activate SO2 monitoring
equipment in accordance with paragraph (j)(11) of this section. If you
detect SO2 in excess of 2 ppm, you must implement the
personnel protective measures in your H2S Contingency Plan,
required by paragraph (f) of this section. You must also follow the
requirements of Sec. 250.1164. You must pipe gases from stored test
fluids into the flare outlet and burn them.
(4) Use downhole test tools and wellhead equipment suitable for
H2S service.
(5) Use tubulars suitable for H2S service. You must not
use drill pipe for well testing without the prior approval of the
District Manager. Water cushions must be thoroughly inhibited in order
to prevent H2S attack on metals. You must flush the test
string fluid treated for this purpose after completion of the test.
(6) Use surface test units and related equipment that is designed
for H2S service.
(p) Metallurgical properties of equipment. When operating in a zone
with H2S present, you must use equipment that is constructed
of materials with metallurgical properties that resist or prevent
sulfide stress cracking (also known as hydrogen embrittlement, stress
corrosion cracking, or H2S embrittlement), chloride-stress
cracking, hydrogen-induced cracking, and other failure modes. You must
do all of the following:
(1) Use tubulars and other equipment, casing, tubing, drill pipe,
couplings, flanges, and related equipment that is designed for
H2S service.
(2) Use BOP system components, wellhead, pressure-control equipment,
and related equipment exposed to H2S-bearing fluids in
conformance with NACE Standard MR0175-03 (as specified in Sec.
250.198).
(3) Use temporary downhole well-security devices such as retrievable
packers and bridge plugs that are designed for H2S service.
(4) When producing in zones bearing H2S, use equipment
constructed of materials capable of resisting or preventing sulfide
stress cracking.
(5) Keep the use of welding to a minimum during the installation or
modification of a production facility. Welding must be done in a manner
that ensures resistance to sulfide stress cracking.
(q) General requirements when operating in an H2S zone: (1) Coring
operations. When you conduct coring operations in H2S-bearing
zones, all personnel in the working area must wear protective-breathing
equipment at least 10 stands in advance of retrieving the core barrel.
Cores to be transported must be sealed and marked for the presence of
H2S.
(2) Logging operations. You must treat and condition well-control
fluid in use for logging operations to minimize the effects of
H2S on the logging equipment.
(3) Stripping operations. Personnel must monitor displaced well-
control fluid returns and wear protective-
[[Page 118]]
breathing equipment in the working area when the atmospheric
concentration of H2S reaches 20 ppm or if the well is under
pressure.
(4) Gas-cut well-control fluid or well kick from H2S-bearing zone.
If you decide to circulate out a kick, personnel in the working area
during bottoms-up and extended-kill operations must wear protective-
breathing equipment.
(5) Drill- and workover-string design and precautions. Drill- and
workover-strings must be designed consistent with the anticipated depth,
conditions of the hole, and reservoir environment to be encountered. You
must minimize exposure of the drill- or workover-string to high stresses
as much as practical and consistent with well conditions. Proper
handling techniques must be taken to minimize notching and stress
concentrations. Precautions must be taken to minimize stresses caused by
doglegs, improper stiffness ratios, improper torque, whip, abrasive wear
on tool joints, and joint imbalance.
(6) Flare system. The flare outlet must be of a diameter that allows
easy nonrestricted flow of gas. You must locate flare line outlets on
the downside of the facility and as far from the facility as is
feasible, taking into account the prevailing wind directions, the wake
effects caused by the facility and adjacent structure(s), and the height
of all such facilities and structures. You must equip the flare outlet
with an automatic ignition system including a pilot-light gas source or
an equivalent system. You must have alternate methods for igniting the
flare. You must pipe to the flare system used for H2S all
vents from production process equipment, tanks, relief valves, burst
plates, and similar devices.
(7) Corrosion mitigation. You must use effective means of monitoring
and controlling corrosion caused by acid gases (H2S and
CO2) in both the downhole and surface portions of a
production system. You must take specific corrosion monitoring and
mitigating measures in areas of unusually severe corrosion where
accumulation of water and/or higher concentration of H2S
exists.
(8) Wireline lubricators. Lubricators which may be exposed to fluids
containing H2S must be of H2S-resistant materials.
(9) Fuel and/or instrument gas. You must not use gas containing
H2S for instrument gas. You must not use gas containing
H2S for fuel gas without the prior approval of the District
Manager.
(10) Sensing lines and devices. Metals used for sensing line and
safety-control devices which are necessarily exposed to H2S-
bearing fluids must be constructed of H2S-corrosion resistant
materials or coated so as to resist H2S corrosion.
(11) Elastomer seals. You must use H2S-resistant
materials for all seals which may be exposed to fluids containing
H2S.
(12) Water disposal. If you dispose of produced water by means other
than subsurface injection, you must submit to the District Manager an
analysis of the anticipated H2S content of the water at the
final treatment vessel and at the discharge point. The District Manager
may require that the water be treated for removal of H2S. The
District Manager may require the submittal of an updated analysis if the
water disposal rate or the potential H2S content increases.
(13) Deck drains. You must equip open deck drains with traps or
similar devices to prevent the escape of H2S gas into the
atmosphere.
(14) Sealed voids. You must take precautions to eliminate sealed
spaces in piping designs (e.g., slip-on flanges, reinforcing pads) which
can be invaded by atomic hydrogen when H2S is present.
Subpart E_Oil and Gas Well-Completion Operations
Sec. 250.500 General requirements.
Well-completion operations must be conducted in a manner to protect
against harm or damage to life (including fish and other aquatic life),
property, natural resources of the OCS, including any mineral deposits
(in areas leased and not leased), the National security or defense, or
the marine, coastal, or human environment. In addition to the
requirements of this subpart,
[[Page 119]]
you must also follow the applicable requirements of subpart G of this
part.
[81 FR 26021, Apr. 29, 2016]
Sec. 250.501 Definition.
When used in this subpart, the following term shall have the meaning
given below:
Well-completion operations means the work conducted to establish the
production of a well after the production-casing string has been set,
cemented, and pressure-tested.
Sec. 250.502 [Reserved]
Sec. 250.503 Emergency shutdown system.
When well-completion operations are conducted on a platform where
there are other hydrocarbon-producing wells or other hydrocarbon flow,
an emergency shutdown system (ESD) manually controlled station shall be
installed near the driller's console or well-servicing unit operator's
work station.
Sec. 250.504 Hydrogen sulfide.
When a well-completion operation is conducted in zones known to
contain hydrogen sulfide (H2S) or in zones where the presence
of H2S is unknown (as defined in Sec. 250.490 of this part),
the lessee shall take appropriate precautions to protect life and
property on the platform or completion unit, including, but not limited
to operations such as blowing the well down, dismantling wellhead
equipment and flow lines, circulating the well, swabbing, and pulling
tubing, pumps, and packers. The lessee shall comply with the
requirements in Sec. 250.490 of this part as well as the appropriate
requirements of this subpart.
Sec. 250.505 Subsea completions.
No subsea well completion shall be commenced until the lessee
obtains written approval from the District Manager in accordance with
Sec. 250.513 of this part. That approval shall be based upon a case-by-
case determination that the proposed equipment and procedures will
adequately control the well and permit safe production operations.
Sec. Sec. 250.506-250.508 [Reserved]
Sec. 250.509 Well-completion structures on fixed platforms.
Derricks, masts, substructures, and related equipment shall be
selected, designed, installed, used, and maintained so as to be adequate
for the potential loads and conditions of loading that may be
encountered during the proposed operations. Prior to moving a well-
completion rig or equipment onto a platform, the lessee shall determine
the structural capability of the platform to safely support the
equipment and proposed operations, taking into consideration the
corrosion protection, age of platform, and previous stresses to the
platform.
Sec. 250.510 Diesel engine air intakes.
Diesel engine air intakes must be equipped with a device to shut
down the diesel engine in the event of runaway. Diesel engines that are
continuously attended must be equipped with either remote operated
manual or automatic-shutdown devices. Diesel engines that are not
continuously attended must be equipped with automatic-shutdown devices.
Sec. 250.511 Traveling-block safety device.
All units being used for well-completion operations that have both a
traveling block and a crown block must be equipped with a safety device
that is designed to prevent the traveling block from striking the crown
block. The device must be checked for proper operation weekly and after
each drill-line slipping operation. The results of the operational check
must be entered in the operations log.
Sec. 250.512 Field well-completion rules.
When geological and engineering information available in a field
enables the District Manager to determine specific operating
requirements, field well-completion rules may be established on the
District Manager's initiative or in response to a request from a lessee.
Such rules may modify the specific requirements of this subpart. After
field well-completion rules have been established, well-completion
operations in the field shall be conducted in
[[Page 120]]
accordance with such rules and other requirements of this subpart. Field
well-completion rules may be amended or canceled for cause at any time
upon the initiative of the District Manager or upon the request of a
lessee.
Sec. 250.513 Approval and reporting of well-completion operations.
(a) No well-completion operation may begin until the lessee receives
written approval from the District Manager. If completion is planned and
the data are available at the time you submit the Application for Permit
to Drill and Supplemental APD Information Sheet (Forms BSEE-0123 and
BSEE-0123S), you may request approval for a well-completion on those
forms (see Sec. Sec. 250.410 through 250.418 of this part). If the
District Manager has not approved the completion or if the completion
objective or plans have significantly changed, you must submit an
Application for Permit to Modify (Form BSEE-0124) for approval of such
operations.
(b) You must submit the following with Form BSEE-0124 (or with Form
BSEE-0123; Form BSEE-0123S):
(1) A brief description of the well-completion procedures to be
followed, a statement of the expected surface pressure, and type and
weight of completion fluids;
(2) A schematic drawing of the well showing the proposed producing
zone(s) and the subsurface well-completion equipment to be used;
(3) For multiple completions, a partial electric log showing the
zones proposed for completion, if logs have not been previously
submitted;
(4) All applicable information required in Sec. 250.731.
(5) When the well-completion is in a zone known to contain
H2S or a zone where the presence of H2S is
unknown, information pursuant to Sec. 250.490 of this part; and
(6) Payment of the service fee listed in Sec. 250.125.
(c) Within 30 days after completion, you must submit to the District
Manager an End of Operations Report (Form BSEE-0125), including a
schematic of the tubing and subsurface equipment.
(d) You must submit public information copies of Form BSEE-0125
according to Sec. 250.186.
[76 FR 64462, Oct. 18, 2011, as amended at 77 FR 50894, Aug. 22, 2012;
81 FR 26021, Apr. 29, 2016]
Sec. 250.514 Well-control fluids, equipment, and operations.
(a) Well-control fluids, equipment, and operations shall be
designed, utilized, maintained, and/or tested as necessary to control
the well in foreseeable conditions and circumstances, including
subfreezing conditions. The well shall be continuously monitored during
well-completion operations and shall not be left unattended at any time
unless the well is shut in and secured.
(b) The following well-control-fluid equipment shall be installed,
maintained, and utilized:
(1) A fill-up line above the uppermost BOP;
(2) A well-control, fluid-volume measuring device for determining
fluid volumes when filling the hole on trips; and
(3) A recording mud-pit-level indicator to determine mud-pit-volume
gains and losses. This indicator shall include both a visual and an
audible warning device.
(c) When coming out of the hole with drill pipe, the annulus shall
be filled with well-control fluid before the change in such fluid level
decreases the hydrostatic pressure 75 pounds per square inch (psi) or
every five stands of drill pipe, whichever gives a lower decrease in
hydrostatic pressure. The number of stands of drill pipe and drill
collars that may be pulled prior to filling the hole and the equivalent
well-control fluid volume shall be calculated and posted near the
operator's station. A mechanical, volumetric, or electronic device for
measuring the amount of well-control fluid required to fill the hole
shall be utilized.
[76 FR 64462, Oct. 18, 2011, as amended at 77 FR 50894, Aug. 22, 2012;
81 FR 26021, Apr. 29, 2016]
[[Page 121]]
Sec. Sec. 250.515-250.517 [Reserved]
Sec. 250.518 Tubing and wellhead equipment.
(a) No tubing string shall be placed in service or continue to be
used unless such tubing string has the necessary strength and pressure
integrity and is otherwise suitable for its intended use.
(b) When the tree is installed, you must equip wells to monitor for
casing pressure according to the following chart:
------------------------------------------------------------------------
If you . . . you must equip . . . so you can monitor . . .
------------------------------------------------------------------------
(1) fixed platform the wellhead, all annuli (A, B, C, D,
wells, etc., annuli).
(2) subsea wells, the tubing head, the production casing
annulus (A annulus).
(3) hybrid * wells, the surface wellhead, all annuli at the surface
(A and B riser annuli).
If the production casing
below the mudline and
the production casing
riser above the mudline
are pressure isolated
from each other,
provisions must be made
to monitor the
production casing below
the mudline for casing
pressure.
------------------------------------------------------------------------
* Characterized as a well drilled with a subsea wellhead and completed
with a surface casing head, a surface tubing head, a surface tubing
hanger, and a surface christmas tree.
(c) Wellhead, tree, and related equipment shall have a pressure
rating greater than the shut-in tubing pressure and shall be designed,
installed, used, maintained, and tested so as to achieve and maintain
pressure control. New wells completed as flowing or gas-lift wells shall
be equipped with a minimum of one master valve and one surface safety
valve, installed above the master valve, in the vertical run of the
tree.
(d) Subsurface safety equipment must be installed, maintained, and
tested in compliance with the applicable sections in Sec. Sec. 250.810
through 250.839.
(e) When installed, packers and bridge plugs must meet the
following:
(1) All permanently installed packers and bridge plugs must comply
with API Spec. 11D1 (as incorporated by reference in Sec. 250.198);
(2) The production packer must be set at a depth that will allow for
a column of weighted fluids to be placed above the packer that will
exert a hydrostatic force greater than or equal to the force created by
the reservoir pressure below the packer;
(3) The production packer must be set as close as practically
possible to the perforated interval; and
(4) The production packer must be set at a depth that is within the
cemented interval of the selected casing section.
(f) Your APM must include a description and calculations for how you
determined the production packer setting depth.
[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012;
81 FR 26021, Apr. 29, 2016; 81 FR 61918, Sept. 7, 2016]
Casing Pressure Management
Sec. 250.519 What are the requirements for casing pressure management?
Once you install your wellhead, you must meet the casing pressure
management requirements of API RP 90 (as incorporated by reference in
Sec. 250.198) and the requirements of Sec. Sec. 250.519 through
250.530. If there is a conflict between API RP 90 and the casing
pressure requirements of this subpart, you must follow the requirements
of this subpart.
[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012]
Sec. 250.520 How often do I have to monitor for casing pressure?
You must monitor for casing pressure in your well according to the
following table:
----------------------------------------------------------------------------------------------------------------
with a minimum one pressure data
If you have . . . you must monitor . . . point recorded per . . .
----------------------------------------------------------------------------------------------------------------
(a) fixed platform wells, monthly, month for each casing.
[[Page 122]]
(b) subsea wells, continuously, day for the production casing.
(c) hybrid wells, continuously, day for each riser and/or the
production casing.
(d) wells operating under a casing pressure daily, day for each casing.
request on a manned fixed platform,
(e) wells operating under a casing pressure weekly, week for each casing.
request on an unmanned fixed platform,
----------------------------------------------------------------------------------------------------------------
[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012]
Sec. 250.521 When do I have to perform a casing diagnostic test?
(a) You must perform a casing diagnostic test within 30 days after
first observing or imposing casing pressure according to the following
table:
------------------------------------------------------------------------
you must perform a casing
If you have a . . . diagnostic test if . . .
------------------------------------------------------------------------
(1) fixed platform well, the casing pressure is
greater than 100 psig.
(2) subsea well, the measurable casing
pressure is greater than
the external hydrostatic
pressure plus 100 psig
measured at the subsea
wellhead.
(3) hybrid well, a riser or the production
casing pressure is greater
than 100 psig measured at
the surface.
------------------------------------------------------------------------
(b) You are exempt from performing a diagnostic pressure test for
the production casing on a well operating under active gas lift.
[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012]
Sec. 250.522 How do I manage the thermal effects caused
by initial production on a newly completed or recompleted well?
A newly completed or recompleted well often has thermal casing
pressure during initial startup. Bleeding casing pressure during the
startup process is considered a normal and necessary operation to manage
thermal casing pressure; therefore, you do not need to evaluate these
operations as a casing diagnostic test. After 30 days of continuous
production, the initial production startup operation is complete and you
must perform casing diagnostic testing as required in Sec. Sec. 250.520
and 250.522.
[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012]
Sec. 250.523 When do I have to repeat casing diagnostic testing?
Casing diagnostic testing must be repeated according to the
following table:
------------------------------------------------------------------------
you must repeat diagnostic
When . . . testing . . .
------------------------------------------------------------------------
(a) your casing pressure request approved immediately.
term has expired,
(b) your well, previously on gas lift, has immediately on the
been shut-in or returned to flowing production casing (A
status without gas lift for more than 180 annulus). The production
days, casing (A annulus) of wells
on active gas lift are
exempt from diagnostic
testing.
(c) your casing pressure request becomes within 30 days.
invalid,
(d) a casing or riser has an increase in within 30 days.
pressure greater than 200 psig over the
previous casing diagnostic test,
(e) after any corrective action has been within 30 days.
taken to remediate undesirable casing
pressure, either as a result of a casing
pressure request denial or any other
action,
(f) your fixed platform well production once per year, not to exceed
casing (A annulus) has pressure exceeding 12 months between tests.
10 percent of its minimum internal yield
pressure (MIYP), except for production
casings on active gas lift,
(g) your fixed platform well's outer once every 5 years, at a
casing (B, C, D, etc., annuli) has a minimum.
pressure exceeding 20 percent of its
MIYP,
------------------------------------------------------------------------
[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012]
[[Page 123]]
Sec. 250.524 How long do I keep records of casing pressure
and diagnostic tests?
Records of casing pressure and diagnostic tests must be kept at the
field office nearest the well for a minimum of 2 years. The last casing
diagnostic test for each casing or riser must be retained at the field
office nearest the well until the well is abandoned.
[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012]
Sec. 250.525 When am I required to take action from
my casing diagnostic test?
You must take action if you have any of the following conditions:
(a) Any fixed platform well with a casing pressure exceeding its
maximum allowable wellhead operating pressure (MAWOP);
(b) Any fixed platform well with a casing pressure that is greater
than 100 psig and that cannot bleed to 0 psig through a \1/2\-inch
needle valve within 24 hours, or is not bled to 0 psig during a casing
diagnostic test;
(c) Any well that has demonstrated tubing/casing, tubing/riser,
casing/casing, riser/casing, or riser/riser communication;
(d) Any well that has sustained casing pressure (SCP) and is bled
down to prevent it from exceeding its MAWOP, except during initial
startup operations described in Sec. 250.521;
(e) Any hybrid well with casing or riser pressure exceeding 100
psig; or
(f) Any subsea well with a casing pressure 100 psig greater than the
external hydrostatic pressure at the subsea wellhead.
[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012]
Sec. 250.526 What do I submit if my casing diagnostic test requires action?
Within 14 days after you perform a casing diagnostic test requiring
action under Sec. 250.524:
----------------------------------------------------------------------------------------------------------------
You must submit either . . and it must include . . .
. to the appropriate . . . You must also . . .
----------------------------------------------------------------------------------------------------------------
(a) a notification of District Manager and copy requirements under Sec. submit an Application for
corrective action; or, the Regional Supervisor, 250.526, Permit to Modify or
Field Operations, Corrective Action Plan
within 30 days of the
diagnostic test.
(b) a casing pressure Regional Supervisor, Field requirements under Sec. .............................
request, Operations, 250.527.
----------------------------------------------------------------------------------------------------------------
[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012]
Sec. 250.527 What must I include in my notification of corrective action?
The following information must be included in the notification of
corrective action:
(a) Lessee or Operator name;
(b) Area name and OCS block number;
(c) Well name and API number; and
(d) Casing diagnostic test data.
[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012]
Sec. 250.528 What must I include in my casing pressure request?
The following information must be included in the casing pressure
request:
(a) API number;
(b) Lease number;
(c) Area name and OCS block number;
(d) Well number;
(e) Company name and mailing address;
(f) All casing, riser, and tubing sizes, weights, grades, and MIYP;
(g) All casing/riser calculated MAWOPs;
(h) All casing/riser pre-bleed down pressures;
(i) Shut-in tubing pressure;
(j) Flowing tubing pressure;
(k) Date and the calculated daily production rate during last well
test (oil, gas, basic sediment, and water);
(l) Well status (shut-in, temporarily abandoned, producing,
injecting, or gas lift);
(m) Well type (dry tree, hybrid, or subsea);
[[Page 124]]
(n) Date of diagnostic test;
(o) Well schematic;
(p) Water depth;
(q) Volumes and types of fluid bled from each casing or riser
evaluated;
(r) Type of diagnostic test performed:
(1) Bleed down/buildup test;
(2) Shut-in the well and monitor the pressure drop test;
(3) Constant production rate and decrease the annular pressure test;
(4) Constant production rate and increase the annular pressure test;
(5) Change the production rate and monitor the casing pressure test;
and
(6) Casing pressure and tubing pressure history plot;
(s) The casing diagnostic test data for all casing exceeding 100
psig;
(t) Associated shoe strengths for casing shoes exposed to annular
fluids;
(u) Concentration of any H2S that may be present;
(v) Whether the structure on which the well is located is manned or
unmanned;
(w) Additional comments; and
(x) Request date.
[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012]
Sec. 250.529 What are the terms of my casing pressure request?
Casing pressure requests are approved by the Regional Supervisor,
Field Operations, for a term to be determined by the Regional Supervisor
on a case-by-case basis. The Regional Supervisor may impose additional
restrictions or requirements to allow continued operation of the well.
[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012]
Sec. 250.530 What if my casing pressure request is denied?
(a) If your casing pressure request is denied, then the operating
company must submit plans for corrective action to the respective
District Manager within 30 days of receiving the denial. The District
Manager will establish a specific time period in which this corrective
action will be taken. You must notify the respective District Manager
within 30 days after completion of your corrected action.
(b) You must submit the casing diagnostic test data to the
appropriate Regional Supervisor, Field Operations, within 14 days of
completion of the diagnostic test required under Sec. 250.522(e).
[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012]
Sec. 250.531 When does my casing pressure request approval become invalid?
A casing pressure request becomes invalid when:
(a) The casing or riser pressure increases by 200 psig over the
approved casing pressure request pressure;
(b) The approved term ends;
(c) The well is worked-over, side-tracked, redrilled, recompleted,
or acid stimulated;
(d) A different casing or riser on the same well requires a casing
pressure request; or
(e) A well has more than one casing operating under a casing
pressure request and one of the casing pressure requests become invalid,
then all casing pressure requests for that well become invalid.
[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012]
Subpart F_Oil and Gas Well-Workover Operations
Sec. 250.600 General requirements.
Well-workover operations must be conducted in a manner to protect
against harm or damage to life (including fish and other aquatic life),
property, natural resources of the Outer Continental Shelf (OCS)
including any mineral deposits (in areas leased and not leased), the
National security or defense, or the marine, coastal, or human
environment. In addition to the requirements of this subpart, you must
also follow the applicable requirements of subpart G of this part.
[81 FR 26021, Apr. 29, 2016]
Sec. 250.601 Definitions.
When used in this subpart, the following terms shall have the
meanings given below:
Expected surface pressure means the highest pressure predicted to be
exerted upon the surface of a well. In calculating expected surface
pressure, you
[[Page 125]]
must consider reservoir pressure as well as applied surface pressure.
Routine operations mean any of the following operations conducted on
a well with the tree installed:
(a) Cutting paraffin;
(b) Removing and setting pump-through-type tubing plugs, gas-lift
valves, and subsurface safety valves which can be removed by wireline
operations;
(c) Bailing sand;
(d) Pressure surveys;
(e) Swabbing;
(f) Scale or corrosion treatment;
(g) Caliper and gauge surveys;
(h) Corrosion inhibitor treatment;
(i) Removing or replacing subsurface pumps;
(j) Through-tubing logging (diagnostics);
(k) Wireline fishing; and
(l) Setting and retrieving other subsurface flow-control devices.
Workover operations mean the work conducted on wells after the
initial completion for the purpose of maintaining or restoring the
productivity of a well.
Sec. 250.602 [Reserved]
Sec. 250.603 Emergency shutdown system.
When well-workover operations are conducted on a well with the tree
removed, an emergency shutdown system (ESD) manually controlled station
shall be installed near the driller's console or well-servicing unit
operator's work station, except when there is no other hydrocarbon-
producing well or other hydrocarbon flow on the platform.
Sec. 250.604 Hydrogen sulfide.
When a well-workover operation is conducted in zones known to
contain hydrogen sulfide (H2S) or in zones where the presence
of H2S is unknown (as defined in Sec. 250.490 of this part),
the lessee shall take appropriate precautions to protect life and
property on the platform or rig, including but not limited to operations
such as blowing the well down, dismantling wellhead equipment and flow
lines, circulating the well, swabbing, and pulling tubing, pumps and
packers. The lessee shall comply with the requirements in Sec. 250.490
of this part as well as the appropriate requirements of this subpart.
Sec. 250.605 Subsea workovers.
No subsea well-workover operation including routine operations shall
be commenced until the lessee obtains written approval from the District
Manager in accordance with Sec. 250.613 of this part. That approval
shall be based upon a case-by-case determination that the proposed
equipment and procedures will maintain adequate control of the well and
permit continued safe production operations.