Michael Bromwich: US Govt Has Authority To Regulate Contractors

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May 2, 2011

HOUSTON (Dow Jones)–The head of the U.S. agency that oversees offshore oil production said Monday that it would seek to pursue regulatory actions against offshore drilling contractors in case of serious offenses.

So far, the brunt of the regulatory oversight held by the Bureau of Ocean Energy Management, Regulation and Enforcement has been solely focused on so-called operators, the oil and gas companies that own the leases where fossil fuels are found.

But “we have broad legal authority over all activities relating to offshore leases, whether engaged in by lessees, operators or contractors,” said BOEMRE chief Michael Bromwich, in a speech to energy executives at the Offshore Technology Conference in Houston.

In most cases, operators will remain fully or solely responsible for the leases, but the agency retains the ability “to pursue regulatory actions against contractors for serious violations of agency rules and regulations.”

BOEMRE will be “careful and measured” in extending its authority to contractors, Bromwich said.

Bromwich also said that the agency is developing improvements to the current process for submitting and processing drilling permit applications. New recommended procedures to file these applications will be filed within few weeks, he added.

These guidelines are voluntary, but will help operators comply with rules and BOEMRE staff process applications; more details will be provided in coming weeks, Bromwich said

The guiding principles of the recommendations will be “greater clarity, transparency and consistency,” he said.

-By Angel Gonzalez, Dow Jones Newswires

Photo: Transocean’s Discoverer Enterprise currently contracted with BP in the U.S. Gulf of Mexico

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