(Reuters) - The Obama administration is tightening the reins on offshore drilling companies in the wake of a relentless oil spill ravaging the Gulf coast.
New deepwater exploratory drilling will be on hold for six months pending the findings and recommendations of a presidential commission investigating the causes of the explosion that sank Transocean’s Deepwater Horizon rig leased by BP Plc.
Such a lengthy moratorium could impact future U.S. oil and natural gas output. U.S. Gulf offshore oil operations produced 1.6 million barrels of oil per day in 2009, accounting for 8 percent of U.S. liquid fuel consumption, according to the U.S. Energy Information Administration.
In addition to the deepwater drilling moratorium, the Interior Department has also outlined a series of potentially costly new safety rules and standards that oil companies will have to contend with.
Here some details about the drilling ban and safety measures:
DEEPWATER DRILLING MORATORIUM
* The six-month moratorium will apply to all new exploratory drilling at depths more than 500 feet.
* Thirty-three exploratory rigs in the Gulf of Mexico will have to stop drilling operations as soon as safely possible and remain out of action for six months.
* Companies that have an approved permit to conduct exploratory drilling in deepwater, but have not started their project, will not be allowed to start drilling during the moratorium.
* Shallow water drilling and wells already in production will be able to continue work under the moratorium.
* As part of the ban, Royal Dutch Shell’s proposal to drill exploration wells in the Arctic this summer has been postponed until 2011.
* Upcoming lease sales in the Gulf of Mexico and off Virginia have been canceled.
* Blow-out preventers (BOPs) on floating drilling operations need to certified by an independent third party. The department will also develop formal equipment certification standards for BOPs.
* Within a year, BOPs on all operations will be required to have two sets of blind shear rams spaced at least four feet apart.
* Subsea BOPs will require remote operated vehicles that are able to close all shear and pipe rams, close choke and kill valves and unlatch the lower marine riser package.
* Interior will develop surface and subsea methods to test capabilities of remotely operated vehicles and BOPs.
* Interior will conduct more in depth safety inspections that will include witnessing actual tests of BOP equipment.
* Rig operators will be required to undergo a series of procedures and checks before displacing kill-weight drilling fluid from the wellbore.
* All well casing and cement designs for new floating drilling operations will have to be certified by a professional engineer.
* Interior will develop specific cementing requirements.
* Interior will expand safety and training programs for rig workers.
Reporting by Ayesha Rascoe; Editing by Sofina Mirza-Reid
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