ENSCO Files Suit Against Drilling Moratorium, New Regulations

Drilling contractor ENSCO International has filed a lawsuit claiming that the U.S. Department of Interior and Bureau of Ocean Energy Management violated the U.S. Administrative Procedures Act (APA) and Outer Continental Shelf Lands Act (OCSLA) with its two proposed deepwater drilling moratoriums and "onerous" new requirements for deep and shallow water drilling that lack proper legislative, regulatory and procedural authorization.

ENSCO filed an amended complaint in U.S. District Court in New Orleans on July 20, calling the second moratorium "a thinly-veiled and impermissible attempt to rectify procedural and substantive problems with the original moratorium."

In its complaint, ENSCO alleges that Interior and BOEM are delaying the approval of deepwater and shallow water drilling applications and are requiring, without proper authorization from Congress, submission and approval of planning documents called "Development Operations Coordination Documents" for development and production activities in certain areas of the U.S. Gulf. ENSCO also claims that Interior and BOEM are requiring drilling permits for development and production activities with authorization from Congress.

ENSCO is seeking a better-defined regulatory process for instituting new safety measures and permitting requirements for shallow and deepwater drilling in the Gulf of Mexico.

ENSCO's first claim that Interior and BOEM violated the Administrative Procedures Act and the Outer Continental Shelf Lands Act by imposing a six-month moratorium on deepwater drilling in the outer Continental Shelf in late May is similar to Hornbeck Offshore's claim pending before the District Court.

The court ruled that Hornbeck's allegation has a considerable likelihood of success and has entered a preliminary injunction prohibiting enforcement of the moratorium, a ruling that is currently under review by the Fifth Circuit.

"In addition, [the] Defendants did not analyze the situation anew and with an open mind when deciding to impose the second moratorium. Instead, it was a pre-ordained result that was announced on the very same afternoon this Court enjoined the first moratorium," ENSCO said.