Interior Secretary Tours Rig in U.S. Gulf

Secretary of the Interior Sally Jewell on Friday visited an offshore drilling rig and production platform in the Gulf of Mexico, capping a two-day visit to the Department's regional offices that oversee oil and gas development in federal waters. Earlier, Secretary Jewell met with Interior employees, praising them for their professionalism and commitment to their mission, including safe and responsible energy development and Gulf Coast restoration.

"Oil and gas production from the Gulf of Mexico plays an important role in powering our nation and strengthening our economy," said Jewell. "The Department of the Interior will continue to work with industry to ensure that these resources are developed safely and responsibly, while also delivering a fair return to the American taxpayer, businesses and communities."

Jewell was accompanied by Bureau of Safety and Environmental Enforcement (BSEE) Director Jim Watson and a BSEE Gulf Region inspector on the visits, which included seeing first-hand LLOG’s drilling operations onboard the ENSCO 8502 rig, approximately 120 miles southeast of New Orleans, LA. There she observed a cementing operation for a production well and was briefed on LLOG’s development plan for the area.

Jewell then visited Chevron’s deepest producing facility in 6,500 feet water depth, a semisubmersible platform approximately 125 miles southeast of New Orleans, LA. There she toured the production equipment and discussed Chevron’s deepwater strategy for exploration and development in the Gulf of Mexico.

In speaking to employees on Thursday, including Bureau of Ocean Energy Management (BOEM) and BSEE employees, the Secretary thanked them for their work to implement the most significant drilling and safety reforms in U.S. history following the 2010 Deepwater Horizon tragedy.

"Maintaining the public’s trust in the safety and environmental performance of oil and gas production is critically important as we continue to tap into the Gulf’s abundant resource potential," Jewell told the employees. "I have immense admiration and respect for your efforts to carry out aggressive restructuring and strengthening of the oil and gas regulatory system."

The Gulf of Mexico contributes about 25 percent of U.S. domestic oil and 11 percent of domestic gas production, providing the bulk of the $12.2 billion in revenue from energy production that Interior distributed last year. The Gulf is home to a number of world-class producing basins, including many in deepwater areas that are increasingly accessible with new technology.

In 2012, Interior approved 112 new deepwater well permits in the Gulf, the most since 2005, and more rigs are now operating there than before Deepwater Horizon. Under Interior’s new five-year program for offshore leasing, more than 75 percent of the total undiscovered, technically recoverable oil and gas resources estimated on the OCS were made available for exploration and development. Fifteen potential lease sales are scheduled for the 2012-2017 period, including 12 in the Gulf and three off the coasts of Alaska.

Two Gulf lease sales held under the five-year program have demonstrated industry’s continued strong interest, especially in the deepwater region. The most recent sale in March offered 39 million acres, attracting more than $1.2 billion in high bids. The 20- million-acre sale held last November netted nearly $134 million. A third sale in August will offer 21 million acres offshore Texas, making all unleased areas in the Western Planning Area available for development.

These sales include conditions, developed in tandem with safety and drilling reforms, to ensure both orderly resource development and protection of the human, marine and coastal environments. The economic terms for the leases include a range of incentives to encourage diligent development and ensure a fair return to American taxpayers.

A 2011 BOEM assessment estimated that the Central Gulf holds more than 30 billion barrels of oil and about 134 trillion cubic feet of natural gas yet to be discovered. The Western Gulf of Mexico is estimated to contain 12 billion barrels of oil and nearly 80 trillion cubic feet of natural gas.


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