Factbox: Deepwater drilling ban and new safety rules

(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:


* 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