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Government orders non-producing Gulf oil wells plugged
September 15, 2010 / 5:29 PM / 7 years ago

Government orders non-producing Gulf oil wells plugged

WASHINGTON (Reuters) - The U.S. Interior Department said on Wednesday it would require oil and gas companies operating in the Gulf of Mexico to plug nearly 3,500 non-producing wells permanently and dismantle about 650 oil and gas production platforms if no longer being used.

In a notice to offshore operators, the department said the risk that unused wells, platforms and pipelines could be damaged increased substantially during the hurricane season and they should be plugged and dismantled correctly.

“We have placed the industry on notice that they will be held to the highest standards of planning and operations in developing leases and today’s notice reiterates that mandate,” Interior Secretary Ken Salazar said.

Oil and gas producers have historically said such “idle iron” might one day be used again to support other active wells located in the same lease area. They were therefore reluctant to plug wells and remove infrastructure until they had to meet the government’s final decommissioning requirements.

Those regulations require decommissioning within one year after an offshore drilling lease expires or is ended, which is sometimes years after exploration and production facilities have not been used.

The new notice clarifies that any well with a subsurface safety valve that has not been used in five years must be plugged. Associated platforms and pipelines must be dismantled if no longer involved in seeking or producing oil or gas.

Companies will have 120 days to submit a company-wide plan for decommissioning the affected facilities and wells, the department said.

Reporting by Tom Doggett; Editing by Dale Hudson

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