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Title 30 – Mineral Resources–Volume 2

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Title 30 – Mineral Resources–Volume 2


Part


chapter ii – Bureau of Safety and Environmental Enforcement, Department of the Interior

203


chapter iv – Geological Survey, Department of the Interior

401


chapter v – Bureau of Ocean Energy Management, Department of the Interior

519

CHAPTER II – BUREAU OF SAFETY AND ENVIRONMENTAL ENFORCEMENT, DEPARTMENT OF THE INTERIOR

SUBCHAPTER A – MINERALS REVENUE MANAGEMENT

PARTS 200-202 [RESERVED]

PART 203 – RELIEF OR REDUCTION IN ROYALTY RATES


Authority:25 U.S.C. 396 et seq.; 25 U.S.C. 396a et seq.; 25 U.S.C. 2101 et seq.; 30 U.S.C. 181 et seq.; 30 U.S.C. 351 et seq.; 30 U.S.C. 1001 et seq.; 30 U.S.C. 1701 et seq.; 31 U.S.C. 9701; 42 U.S.C. 15903-15906; 43 U.S.C. 1301 et seq.; 43 U.S.C. 1331 et seq.; and 43 U.S.C. 1801 et seq.


Source:76 FR 64462, Oct. 18, 2011, unless otherwise noted.

Subpart A – General Provisions

§ 203.0 What definitions apply to this part?

Authorized field means a field:


(1) Located in a water depth of at least 200 meters and in the Gulf of Mexico (GOM) west of 87 degrees, 30 minutes West longitude;


(2) That includes one or more pre-Act leases; and


(3) From which no current pre-Act lease produced, other than test production, before November 28, 1995.


Certified unsuccessful well means an original well or a sidetrack with a sidetrack measured depth (i.e., length) of at least 10,000 feet, on your lease that:


(1) You begin drilling on or after March 26, 2003, and before May 3, 2009, on a lease that is located in water partly or entirely less than 200 meters deep and that is not a non-converted lease, or on or after May 18, 2007, and before May 3, 2013, on a lease that is located in water entirely more than 200 meters and entirely less than 400 meters deep;


(2) You begin drilling before your lease produces gas or oil from a well with a perforated interval the top of which is at least 18,000 feet true vertical depth subsea (TVD SS), (i.e., below the datum at mean sea level);


(3) You drill to at least 18,000 feet TVD SS with a target reservoir on your lease, identified from seismic and related data, deeper than that depth;


(4) Fails to meet the producibility requirements of 30 CFR part 550, subpart A, and does not produce gas or oil, or meets those producibility requirements and Bureau of Ocean Energy Management (BOEM) agrees it is not commercially producible; and


(5) For which you have provided the notices and information required under § 203.47.


Complete application means an original and two copies of the six reports consisting of the data specified in §§ 203.81, 203.83, and 203.85 through 203.89, along with one set of digital information, which Bureau of Safety and Environmental Enforcement (BSEE) has reviewed and found complete.


Deep well means either an original well or a sidetrack with a perforated interval the top of which is at least 15,000 feet TVD SS and less than 20,000 feet TVD SS. A deep well subsequently re-perforated at less than 15,000 feet TVD SS in the same reservoir is still a deep well.


Determination means the binding decision by BSEE on whether your field qualifies for relief or how large a royalty-suspension volume must be to make the field economically viable.


Development project means a project to develop one or more oil or gas reservoirs located on one or more contiguous leases that have had no production (other than test production) before the current application for royalty relief and are either:


(1) Located in a planning area offshore Alaska; or


(2) Located in the GOM in a water depth of at least 200 meters and wholly west of 87 degrees, 30 minutes West longitude, and were issued in a sale held after November 28, 2000.


Draft application means the preliminary set of information and assumptions you submit to seek a nonbinding assessment on whether a field could be expected to qualify for royalty relief.


Eligible lease means a lease that:


(1) Is issued as part of an OCS lease sale held after November 28, 1995, and before November 28, 2000;


(2) Is located in the Gulf of Mexico in water depths of 200 meters or deeper;


(3) Lies wholly west of 87 degrees, 30 minutes West longitude; and


(4) Is offered subject to a royalty suspension volume.


Expansion project means a project that meets the following requirements:


(1) You must propose the project in a (BOEM) Development and Production Plan, a BOEM Development Operations Coordination Document (DOCD), or a BOEM Supplement to a DOCD, approved by the Secretary of the Interior after November 28, 1995.


(2) The project must be located on either:


(i) A pre-Act lease in the GOM, or a lease in the GOM issued in a sale held after November 28, 2000, located wholly west of 87 degrees, 30 minutes West longitude; or


(ii) A lease in a planning area offshore Alaska.


(3) On a pre-Act lease in the GOM, the project:


(i) Must significantly increase the ultimate recovery of resources from one or more reservoirs that have not previously produced (extending recovery from reservoirs already in production does not constitute a significant increase); and


(ii) Must involve a substantial capital investment (e.g., fixed-leg platform, subsea template and manifold, tension-leg platform, multiple well project, etc.).


(4) For a lease issued in a planning area offshore Alaska, or in the GOM after November 28, 2000, the project must involve a new well drilled into a reservoir that has not previously produced.


(5) On a lease in the GOM, the project must not include a reservoir the production from which an RSV under §§ 203.30 through 203.36 or §§ 203.40 through 203.48 would be applied.


Fabrication (or start of construction) means evidence of an irreversible commitment to a concept and scale of development. Evidence includes copies of a binding contract between you (as applicant) and a fabrication yard, a letter from a fabricator certifying that continuous construction has begun, and a receipt for the customary down payment.


Field means an area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same general geological structural feature or stratigraphic trapping condition. Two or more reservoirs may be in a field, separated vertically by intervening impervious strata or laterally by local geologic barriers, or both.


Lease means a lease or unit.


New production means any production from a current pre-Act lease from which no royalties are due on production, other than test production, before November 28, 1995. Also, it means any additional production resulting from new lease-development activities on a lease issued in a sale after November 28, 2000, or a current pre-Act lease under a BOEM DOCD or a BOEM Supplement approved by the Secretary of the Interior after November 28, 1995.


Nonbinding assessment means an opinion by BSEE of whether your field could qualify for royalty relief. It is based on your draft application and does not entitle the field to relief.


Non-converted lease means a lease located partly or entirely in water less than 200 meters deep issued in a lease sale held after January 1, 2001, and before January 1, 2004, whose original lease terms provided for an RSV for deep gas production and the lessee has not exercised the option under § 203.49 to replace the lease terms for royalty relief with those in § 203.0 and §§ 203.40 through 203.48.


Original well means a well that is drilled without utilizing an existing wellbore. An original well includes all sidetracks drilled from the original wellbore either before the drilling rig moves off the well location or after a temporary rig move that BSEE agrees was forced by a weather or safety threat and drilling resumes within 1 year. A bypass from an original well (e.g., drilling around material blocking the hole or to straighten crooked holes) is part of the original well.


Participating area means that part of the unit area that BSEE determines is reasonably proven by drilling and completion of producible wells, geological and geophysical information, and engineering data to be capable of producing hydrocarbons in paying quantities.


Performance conditions mean minimum conditions you must meet, after we have granted relief and before production begins, to remain qualified for that relief. If you do not meet each one of these performance conditions, we consider it a change in material fact significant enough to invalidate our original evaluation and approval.


Phase 1 ultra-deep well means an ultra-deep well on a lease that is located in water partly or entirely less than 200 meters deep for which drilling began before May 18, 2007, and that begins production before May 3, 2009, or that meets the requirements to be a certified unsuccessful well.


Phase 2 ultra-deep well means an ultra-deep well for which drilling began on or after May 18, 2007; and that either meets the requirements to be a certified unsuccessful well or that begins production:


(1) Before the date which is 5 years after the lease issuance date on a non-converted lease; or


(2) Before May 3, 2009, on all other leases located in water partly or entirely less than 200 meters deep; or


(3) Before May 3, 2013, on a lease that is located in water entirely more than 200 meters and entirely less than 400 meters deep.


Phase 3 ultra-deep well means an ultra-deep well for which drilling began on or after May 18, 2007, and that begins production:


(1) On or after the date which is 5 years after the lease issuance date on a non-converted lease; or


(2) On or after May 3, 2009, on all other leases located in water partly or entirely less than 200 meters deep; or


(3) On or after May 3, 2013, on a lease that is located in water entirely more than 200 meters and entirely less than 400 meters deep.


Pre-Act lease means a lease that:


(1) Results from a sale held before November 28, 1995;


(2) Is located in the GOM in water depths of 200 meters or deeper; and


(3) Lies wholly west of 87 degrees, 30 minutes West longitude.


Production means all oil, gas, and other relevant products you save, remove, or sell from a tract or those quantities allocated to your tract under a unitization formula, as measured for the purposes of determining the amount of royalty payable to the United States.


Project means any activity that requires at least a permit to drill.


Qualified deep well means:


(1) On a lease that is located in water partly or entirely less than 200 meters deep that is not a non-converted lease, a deep well for which drilling began on or after March 26, 2003, that produces natural gas (other than test production), including gas associated with oil production, before May 3, 2009, and for which you have met the requirements prescribed in § 203.44;


(2) On a non-converted lease, a deep well that produces natural gas (other than test production) before the date which is 5 years after the lease issuance date from a reservoir that has not produced from a deep well on any lease; or


(3) On a lease that is located in water entirely more than 200 meters but entirely less than 400 meters deep, a deep well for which drilling began on or after May 18, 2007, that produces natural gas (other than test production), including gas associated with oil production before May 3, 2013, and for which you have met the requirements prescribed in § 203.44.


Qualified ultra-deep well means:


(1) On a lease that is located in water partly or entirely less than 200 meters deep that is not a non-converted lease, an ultra-deep well for which drilling began on or after March 26, 2003, that produces natural gas (other than test production), including gas associated with oil production, and for which you have met the requirements prescribed in § 203.35 or § 203.44, as applicable; or


(2) On a lease that is located in water entirely more than 200 meters and entirely less than 400 meters deep, or on a non-converted lease, an ultra-deep well for which drilling began on or after May 18, 2007, that produces natural gas (other than test production), including gas associated with oil production, and for which you have met the requirements prescribed in § 203.35.


Qualified well means either a qualified deep well or a qualified ultra-deep well.


Redetermination means our reconsideration of our determination on royalty relief because you request it after:


(1) We have rejected your application;


(2) We have granted relief but you want a larger suspension volume;


(3) We withdraw approval; or


(4) You renounce royalty relief.


Renounce means action you take to give up relief after we have granted it and before you start production.


Reservoir means an underground accumulation of oil or natural gas, or both, characterized by a single pressure system and segregated from other such accumulations.


Royalty suspension (RS) lease means a lease that:


(1) Is issued as part of an OCS lease sale held after November 28, 2000;


(2) Is in locations or planning areas specified in a particular Notice of OCS Lease Sale offering that lease; and


(3) Is offered subject to a royalty suspension specified in a Notice of OCS Lease Sale published in the Federal Register.


Royalty suspension supplement (RSS) means a royalty suspension volume resulting from drilling a certified unsuccessful well that is applied to future natural gas and oil production generated at any drilling depth on, or allocated under a BSEE-approved unit agreement to, the same lease.


Royalty suspension volume (RSV) means a volume of production from a lease that is not subject to royalty under the provisions of this part.


Sidetrack means, for the purpose of this subpart, a well resulting from drilling an additional hole to a new objective bottom-hole location by leaving a previously drilled hole. A sidetrack also includes drilling a well from a platform slot reclaimed from a previously drilled well or re-entering and deepening a previously drilled well. A bypass from a sidetrack (e.g., drilling around material blocking the hole, or to straighten crooked holes) is part of the sidetrack.


Sidetrack measured depth means the actual distance or length in feet a sidetrack is drilled beginning where it exits a previously drilled hole to the bottom hole of the sidetrack, that is, to its total depth.


Sunk costs for an authorized field means the after-tax eligible costs that you (not third parties) incur for exploration, development, and production from the spud date of the first discovery on the field to the date we receive your complete application for royalty relief. The discovery well must be qualified as producible under 30 CFR part 550, subpart A. Sunk costs include the rig mobilization and material costs for the discovery well that you incurred before its spud date.


Sunk costs for an expansion or development project means the after-tax eligible costs that you (not third parties) incur for only the first well that encounters hydrocarbons in the reservoir(s) included in the application and that meets the producibility requirements under 30 CFR part 550, subpart A on each lease participating in the application. Sunk costs include rig mobilization and material costs for the discovery wells that you incurred before their spud dates.


Ultra-deep well means either an original well or a sidetrack completed with a perforated interval the top of which is at least 20,000 feet TVD SS. An ultra-deep well subsequently re-perforated less than 20,000 feet TVD SS in the same reservoir is still an ultra-deep well.


Withdraw means action we take on a field that has qualified for relief if you have not met one or more of the performance conditions.


§ 203.1 What is BSEE’s authority to grant royalty relief?

The Outer Continental Shelf (OCS) Lands Act, 43 U.S.C. 1337, as amended by the OCS Deep Water Royalty Relief Act (DWRRA), Public Law 104-58 and the Energy Policy Act of 2005, Public Law 109-058 authorizes us to grant royalty relief in four situations.


(a) Under 43 U.S.C. 1337(a)(3)(A), we may reduce or eliminate any royalty or a net profit share specified for an OCS lease to promote increased production.


(b) Under 43 U.S.C. 1337(a)(3)(B), we may reduce, modify, or eliminate any royalty or net profit share to promote development, increase production, or encourage production of marginal resources on certain leases or categories of leases. This authority is restricted to leases in the GOM that are west of 87 degrees, 30 minutes West longitude, and in the planning areas offshore Alaska.


(c) Under 43 U.S.C. 1337(a)(3)(C), we may suspend royalties for designated volumes of new production from any lease if:


(1) Your lease is in deep water (water at least 200 meters deep);


(2) Your lease is in designated areas of the GOM (west of 87 degrees, 30 minutes West longitude);


(3) Your lease was acquired in a lease sale held before the DWRRA (before November 28, 1995);


(4) We find that your new production would not be economic without royalty relief; and


(5) Your lease is on a field that did not produce before enactment of the DWRRA, or if you propose a project to significantly expand production under a Development Operations Coordination Document (DOCD) or a supplementary DOCD, that the Bureau of Ocean Energy Management (BOEM) approved after November 28, 1995.


(d) Under 42 U.S.C. 15904-15905, we may suspend royalties for designated volumes of gas production from deep and ultra-deep wells on a lease if:


(1) Your lease is in shallow water (water less than 400 meters deep) and you produce from an ultra-deep well (top of the perforated interval is at least 20,000 feet TVD SS) or your lease is in waters entirely more than 200 meters and entirely less than 400 meters deep and you produce from a deep well (top of the perforated interval is at least 15,000 feet TVD SS);


(2) Your lease is in the designated area of the GOM (wholly west of 87 degrees, 30 minutes west longitude); and


(3) Your lease is not eligible for deep water royalty relief.


§ 203.2 How can I obtain royalty relief?

We may reduce or suspend royalties for Outer Continental Shelf (OCS) leases or projects that meet the criteria in the following table.


If you have a lease . . .
And if you . . .
Then we may grant you . . .
(a) With earnings that cannot sustain production (i.e., End-of-life lease),Would abandon otherwise potentially recoverable resources but seek to increase production by operating beyond the point at which the lease is economic under the existing royalty rate,A reduced royalty rate on current monthly production and a higher royalty rate on additional monthly production (see §§ 203.50 through 203.56).
(b) Located in a designated GOM deep water area (i.e., 200 meters or greater) and acquired in a lease sale held before November 28, 1995, or after November 28, 2000,Propose an expansion project and can demonstrate your project is uneconomic without royalty relief,A royalty suspension for a minimum production volume plus any additional production large enough to make the project economic (see §§ 203.60 through 203.79).
(c) Located in a designated GOM deep water area and acquired in a lease sale held before November 28, 1995 (Pre-Act lease),Are on a field from which no current pre-Act lease produced (other than test production) before November 28, 1995, (Authorized field,)A royalty suspension for a minimum production volume plus any additional volume needed to make the field economic (see §§ 203.60 through 203.79).
(d) Located in a designated GOM deep water area and acquired in a lease sale held after November 28, 2000,Propose a development project and can demonstrate that the suspension volume, if any, for your lease is not enough to make development economic,A royalty suspension for a minimum production volume plus any additional volume needed to make your project economic (see §§ 203.60 through 203.79).
(e) Where royalty relief would recover significant additional resources or, offshore Alaska or in certain areas of the GOM, would enable development,Are not eligible to apply for end-of-life or deep water royalty relief, but show us you meet certain eligibility conditions,A royalty modification in size, duration, or form that makes your lease or project economic (see § 203.80).
(f) Located in a designated GOM shallow water area and acquired in a lease sale held before January 1, 2001, or after January 1, 2004, or have exercised an option to substitute for royalty relief in your lease terms,Drill a deep well on a lease that is not eligible for deep water royalty relief and you have not previously produced oil or gas from a deep well or an ultra-deep well,A royalty suspension for a volume of gas produced from successful deep and ultra-deep wells, or, for certain unsuccessful deep and ultra-deep wells, a smaller royalty suspension for a volume of gas or oil produced by all wells on your lease (see §§ 203.40 through 203.49).
(g) Located in a designated GOM shallow water area,Drill and produce gas from an ultra-deep well on a lease that is not eligible for deep water royalty relief and you have not previously produced oil or gas from an ultra-deep well,A royalty suspension for a volume of gas produced from successful ultra-deep and deep wells on your lease (see §§ 203.30 through 203.36).
(h) Located in planning areas offshore Alaska,Propose an expansion project or propose a development project and can demonstrate that the project is uneconomic without relief or that the suspension volume, if any, for your lease is not enough to make development economic,A royalty suspension for a minimum production volume plus any additional volume needed to make your project economic (see §§ 203.60, 203.62, 203.67 through 203.70, 203.73, and 203.76 through 203.79).

§ 203.3 Do I have to pay a fee to request royalty relief?

When you submit an application or ask for a preview assessment, you must include a fee to reimburse us for our costs of processing your application or assessment. Federal policy and law require us to recover the cost of services that confer special benefits to identifiable non-Federal recipients. The Independent Offices Appropriation Act (31 U.S.C. 9701), Office of Management and Budget Circular A-25, and the Omnibus Appropriations Bill (Pub. L. 104-134, 110 Stat. 1321, April 26, 1996) authorize us to collect these fees.


(a) We will specify the necessary fees for each of the types of royalty relief applications and possible BSEE audits in a Notice to Lessees. We will periodically update the fees to reflect changes in costs, as well as provide other information necessary to administer royalty relief.


(b) You must file all payments electronically through the Fees for Services page on the BSEE Web site at http://www.bsee.gov, and you must include a copy of the Pay.gov confirmation receipt page with your application or assessment.


[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 36148, June 6, 2016]


§ 203.4 How do the provisions in this part apply to different types of leases and projects?

The tables in this section summarize the similar application and approval provisions for the discretionary end-of-life and deep water royalty relief programs in §§ 203.50 to 203.91. Because royalty relief for deep gas on leases not subject to deep water royalty relief, as provided for under §§ 203.40 to 203.48, does not involve an application, its provisions do not parallel the other two royalty relief programs and are not summarized in this section.


(a) We require the information elements indicated by an X in the following table and described in §§ 203.51, 203.62, and 203.81 through 203.89 for applications for royalty relief.


Information elements
End-of-life

lease
Deep water
Expansion project
Pre-act lease
Development project
(1) Administrative information reportXXXX
(2) Net revenue and relief justification report (prescribed format)X
(3) Economic viability and relief justification report (Royalty Suspension Viability Program (RSVP) model inputs justified with Geological and Geophysical (G&G), Engineering, Production, & Cost reports)XXX
(4) G&G reportXXX
(5) Engineering reportXXX
(6) Production reportXXX
(7) Deep water cost reportXXX

(b) We require the confirmation elements indicated by an X in the following table and described in §§ 203.70, 203.81, 203.90 and 203.91 to retain royalty relief.


Confirmation elements
End-of-life

lease
Deep water
Expansion

project
Pre-act

lease
Development

project
(1) Fabricator’s confirmation reportXXX
(2) Post-production development report approved by an independent certified public accountant (CPA) * * *XXX

(c) The following table indicates by an X, and §§ 203.50, 203.52, 203.60 and 203.67 describe, the prerequisites for our approval of your royalty relief application.


Approval conditions
End-of-life

lease
Deep water
Expansion
Pre-act

lease
Development

project
(1) At least 12 of the last 15 months have the required level of productionX
(2) Already producingX
(3) A producible well into a reservoir that has not produced beforeXXX
(4) Royalties for qualifying months exceed 75 percent of net revenue (NR)X
(5) Substantial investment on a pre-Act lease (e.g., platform, subsea template)
(6) Determined to be economic only with reliefXXX

(d) The following table indicates by an X, and §§ 203.52, 203.74, and 203.75 describe, the prerequisites for a redetermination of our royalty relief decision.


Redetermination conditions
End-of-life

lease
Deep water
Expansion

project
Pre-act

lease
Development

project
(1) After 12 months under current rate, criteria same as for approvalX
(2) For material change in geologic data, prices, costs, or available technologyXXX

(e) The following table indicates by an X, and §§ 203.53 and 203.69 describe, the characteristics of approved royalty relief.


Relief rate and volume, subject to certain conditions
End-of-life

lease
Deep water
Expansion project
Pre-act

lease
Development

project
(1) One-half pre-application effective lease rate on the qualifying amount, 1.5 times pre-application effective lease rate on additional production up to twice the qualifying amount, and the pre-application effective lease rate for any larger volumesX
(2) Qualifying amount is the average monthly production for 12 qualifying monthsX
(3) Zero royalty rate on the suspension volume and the original lease rate on additional productionXXX
(4) Suspension volume is at least 17.5, 52.5 or 87.5 million barrels of oil equivalent (MMBOE)X
(5) Suspension volume is at least the minimum set in the Notice of Sale, the lease, or the regulationsXX
(6) Amount needed to become economicXXX

(f) The following table indicates by an X, and §§ 203.54 and 203.78 describe, circumstances under which we discontinue your royalty relief.


Full royalty resumes when
End-of-life

lease
Deep water
Expansion project
Pre-act

lease
Development

project
(1) Average NYMEX price for last 12 months is at least 25 percent above the average for the qualifying months.X
(2) Average NYMEX price for last calendar year exceeds $28/bbl or $3.50/mcf, escalated by the gross domestic product (GDP) deflator since 1994XX
(3) Average prices for designated periods exceed levels we specify in the Notice of Sale or the leaseXX

(g) The following table indicates by an X, and §§ 203.55, 203.76, and 203.77 describe, circumstances under which we end or reduce royalty relief.


Relief withdrawn or reduced
End-of-life

lease
Deep water
Expansion project
Pre-act

lease
Development

project
(1) If recipient requestsXXXX
(2) Lease royalty rate is at the effective rate for 12 consecutive monthsX
(3) Conditions occur that we specified in the approval letter in individual casesX
(4) Recipient does not submit post-production report that compares expected to actual costsXXX
(5) Recipient changes development systemXXX
(6) Recipient excessively delays starting fabricationXXX
(7) Recipient spends less than 80 percent of proposed pre-production costs prior to start of productionXXX
(8) Amount of relief volume is producedXXX

§ 203.5 What is BSEE’s authority to collect information?

(a) The Office of Management and Budget (OMB) has approved the information collection requirements in this part under 44 U.S.C. 3501 et seq., and assigned OMB Control Number 1014-0005. The title of this information collection is “30 CFR part 203, Relief or Reduction in Royalty Rates.”


(b) BSEE collects this information to make decisions on the economic viability of leases requesting a suspension or elimination of royalty or net profit share. Responses are required to obtain a benefit or are mandatory according to 43 U.S.C. 1331 et seq. BSEE will protect information considered proprietary under applicable law and under regulations at § 203.61, “How do I assess my chances for getting relief?” and 30 CFR 250.197, “Data and information to be made available to the public or for limited inspection.”


(c) An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.


(d) Send comments regarding any aspect of the collection of information under this part, including suggestions for reducing the burden, to the Information Collection Clearance Officer, Bureau of Safety and Environmental Enforcement, 45600 Woodland Road, Sterling, VA 20166.


[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 36148, June 6, 2016]


Subpart B – OCS Oil, Gas, and Sulfur General

Royalty Relief for Drilling Ultra-Deep Wells on Leases Not Subject to Deep Water Royalty Relief

§ 203.30 Which leases are eligible for royalty relief as a result of drilling a phase 2 or phase 3 ultra-deep well?

Your lease may receive a royalty suspension volume (RSV) under §§ 203.31 through 203.36 if the lease meets all the requirements of this section.


(a) The lease is located in the GOM wholly west of 87 degrees, 30 minutes West longitude in water depths entirely less than 400 meters deep.


(b) The lease has not produced gas or oil from a deep well or an ultra-deep well, except as provided in § 203.31(b).


(c) If the lease is located entirely in more than 200 meters and entirely less than 400 meters of water, it must either:


(1) Have been issued before November 28, 1995, and not been granted deep water royalty relief under 43 U.S.C. 1337(a)(3)(C), added by section 302 of the Deep Water Royalty Relief Act; or


(2) Have been issued after November 28, 2000, and not been granted deep water royalty relief under §§ 203.60 through 203.79.


§ 203.31 If I have a qualified phase 2 or qualified phase 3 ultra-deep well, what royalty relief would that well earn for my lease?

(a) Subject to the administrative requirements of § 203.35 and the price conditions in § 203.36, your qualified well earns your lease an RSV shown in the following table in billions of cubic feet (BCF) or in thousands of cubic feet (MCF) as prescribed in § 203.33:


If you have a qualified phase 2 or qualified phase 3 ultra-deep well

that is:
Then your lease earns an RSV on this volume of gas production:
(1) An original well,35 BCF.
(2) A sidetrack with a sidetrack measured depth of at least 20,000 feet,35 BCF.
(3) An ultra-deep short sidetrack that is a phase 2 ultra-deep well,4 BCF plus 600 MCF times

sidetrack measured depth (rounded to the nearest 100 feet) but no more than 25 BCF.
(4) An ultra-deep short sidetrack that is a phase 3 ultra-deep well,0 BCF.

(b)(1) This paragraph applies if your lease:


(i) Has produced gas or oil from a deep well with a perforated interval the top of which is less than 18,000 feet TVD SS;


(ii) Was issued in a lease sale held between January 1, 2004, and December 31, 2005; and


(iii) The terms of your lease expressly incorporate the provisions of §§ 203.41 through 203.47 as they existed at the time the lease was issued.


(2) Subject to the administrative requirements of § 203.35 and the price conditions in § 203.36, your qualified well earns your lease an RSV shown in the following table in BCF or MCF as prescribed in § 203.33:


If you have a qualified phase 2 ultra-deep well that is . . .
Then your lease earns an RSV on this volume of gas production:
(i) An original well or a sidetrack with a sidetrack measured depth of at least 20,000 feet TVD SS,10 BCF.
(ii) An ultra-deep short sidetrack,4 BCF plus 600 MCF times sidetrack measured depth (rounded to the nearest 100 feet) but no more than 10 BCF.

(c) Lessees may request a refund of or recoup royalties paid on production from qualified phase 2 or phase 3 ultra-deep wells that:


(1) Occurs before December 18, 2008, and


(2) Is subject to application of an RSV under either § 203.31 or § 203.41.


(d) The following examples illustrate how this section applies. These examples assume that your lease is located in the GOM west of 87 degrees, 30 minutes West longitude and in water less than 400 meters deep (see § 203.30(a)), has no existing deep or ultra-deep wells and that the price thresholds prescribed in § 203.36 have not been exceeded.



Example 1:In 2008, you drill and begin producing from an ultra-deep well with a perforated interval the top of which is 25,000 feet TVD SS, and your lease has had no prior production from a deep or ultra-deep well. Assuming your lease has no deepwater royalty relief (see § 203.30(c)), your lease is eligible (according to § 203.30(b)) to earn an RSV under § 203.31 because it has not yet produced from a deep well. Your lease earns an RSV of 35 BCF under this section when this well begins producing. According to § 203.31(a), your 25,000 foot well qualifies your lease for this RSV because the well was drilled after the relief authorized here became effective (when the proposed version of this rule was published on May 18, 2007) and produced from an interval that meets the criteria for an ultra-deep well (i.e., is a phase 2 ultra-deep well as defined in § 203.0). Then in 2014, you drill and produce from another ultra-deep well with a perforated interval the top of which is 29,000 feet TVD SS. Your lease earns no additional RSV under this section when this second ultra-deep well produces, because your lease no longer meets the condition in (§ 203.30(b)) of no production from a deep well. However, any remaining RSV earned by the first ultra-deep well on your lease would be applied to production from both the first and the second ultra-deep wells as prescribed in § 203.33(a)(2), or § 203.33(b)(2) if your lease is part of a unit.


Example 2:In 2005, you spudded and began producing from an ultra-deep well with a perforated interval the top of which is 23,000 feet TVD SS. Your lease earns no RSV under this section from this phase 1 ultra-deep well (as defined in § 203.0) because you spudded the well before the publication date (May 18, 2007) of the proposed rule when royalty relief under § 203.31(a) became effective. However, this ultra-deep well may earn an RSV of 25 BCF for your lease under § 203.41 (that became effective May 3, 2004), if the lease is located in water depths partly or entirely less than 200 meters and has not previously produced from a deep well (§ 203.30(b)).


Example 3:In 2000, you began producing from a deep well with a perforated interval the top of which is 16,000 feet TVD SS and your lease is located in water 100 meters deep. Then in 2008, you drill and produce from a new ultra-deep well with a perforated interval the top of which is 24,000 feet TVD SS. Your lease earns no RSV under either this section or § 203.41 because the 16,000-foot well was drilled before we offered any way to earn an RSV for producing from a deep well (see dates in the definition of qualified well in § 203.0) and because the existence of the 16,000-foot well means the lease is not eligible (see § 203.30(b)) to earn an RSV for the 24,000-foot well. Because the lease existed in the year 2000, it cannot be eligible for the exception to this eligibility condition provided in § 203.31(b).


Example 4:In 2008, you spud and produce from an ultra-deep well with a perforated interval the top of which is 22,000 feet TVD SS, your lease is located in water 300 meters deep, and your lease has had no previous production from a deep or ultra-deep well. Your lease earns an RSV of 35 BCF under this section when this well begins producing because your lease meets the conditions in § 203.30 and the well fits the definition of a phase 2 ultra-deep well (in § 203.0). Then in 2010, you spud and produce from a deep well with a perforated interval the top of which is 16,000 feet TVD SS. Your 16,000-foot well earns no RSV because it is on a lease that already has a producing well at least 18,000 feet subsea (see § 203.42(a)), but any remaining RSV earned by the ultra-deep well would also be applied to production from the deep well as prescribed in § 203.33(a)(2), or § 203.33(b)(2) if your lease is part of a unit and § 203.43(a)(2), or § 203.43(b)(2) if your lease is part of a unit. However, if the 16,000-foot deep well does not begin production until 2016 (or if your lease were located in water less than 200 meters deep), then the 16,000-foot well would not be a qualified deep well because this well does not begin production within the interval specified in the definition of a qualified well in § 203.0, and the RSV earned by the ultra-deep well would not be applied to production from this (unqualified) deep well.


Example 5:In 2008, you spud a deep well with a perforated interval the top of which is 17,000 feet TVD SS that becomes a qualified well and earns an RSV of 15 BCF under § 203.41 when it begins producing. Then in 2011, you spud an ultra-deep well with a perforated interval the top of which is 26,000 feet TVD SS. Your 26,000-foot well becomes a qualified ultra-deep well because it meets the date and depth conditions in this definition under § 203.0 when it begins producing, but your lease earns no additional RSV under this section or § 203.41 because it is on a lease that already has production from a deep well (see § 203.30(b)). Both the qualified deep well and the qualified ultra-deep well would share your lease’s total RSV of 15 BCF in the manner prescribed in §§ 203.33 and 203.43.


Example 6:In 2008, you spud a qualified ultra-deep well that is a sidetrack with a sidetrack measured depth of 21,000 feet and a perforated interval the top of which is 25,000 feet TVD SS. This well meets the definition of an ultra-deep well but is too long to be classified an ultra-deep short sidetrack in § 203.0. If your lease is located in 150 meters of water and has not previously produced from a deep well, your lease earns an RSV of 35 BCF because it was drilled after the effective date for earning this RSV. Further, this RSV applies to gas production from this and any future qualified deep and qualified ultra-deep wells on your lease, as prescribed in § 203.33. The absence of an expiration date for earning an RSV on an ultra-deep well means this long sidetrack well becomes a qualified well whenever it starts production. If your sidetrack has a sidetrack measured depth of 14,000 feet and begins production in March 2009, it earns an RSV of 12.4 BCF under this section because it meets the definitions of a phase 2 ultra-deep well (production begins before the expiration date for the pre-existing relief in its water depth category) and an ultra-deep short sidetrack in § 203.0. However, if it does not begin production until 2010, it earns no RSV because it is too short as a phase 3 ultra-deep well to be a qualified ultra-deep well.


Example 7:Your lease was issued in June 2004 and expressly incorporates the provisions of §§ 203.41 through 203.47 as they existed at that time. In January 2005, you spud a deep well (well no. 1) with a perforated interval the top of which is 16,800 feet TVD SS that becomes a qualified well and earns an RSV of 15 BCF under § 203.41 when it begins producing. Then in February 2008, you spud an ultra-deep well (well no. 2) with a perforated interval the top of which is 22,300 feet that begins producing in November 2008, after well no. 1 has started production. Well no. 2 earns your lease an additional RSV of 10 BCF under paragraph (b) of this section because it begins production in time to be classified as a phase 2 ultra-deep well. If, on the other hand, well no. 2 had begun producing in June 2009, it would earn no additional RSV for the lease because it would be classified as a phase 3 ultra-deep well and thus is not entitled to the exception under paragraph (b) of this section.

§ 203.32 What other requirements or restrictions apply to royalty relief for a qualified phase 2 or phase 3 ultra-deep well?

(a) If a qualified ultra-deep well on your lease is within a unitized portion of your lease, the RSV earned by that well under this section applies only to your lease and not to other leases within the unit or to the unit as a whole.


(b) If your qualified ultra-deep well is a directional well (either an original well or a sidetrack) drilled across a lease line, then either:


(1) The lease with the perforated interval that initially produces earns the RSV or


(2) If the perforated interval crosses a lease line, the lease where the surface of the well is located earns the RSV.


(c) Any RSV earned under § 203.31 is in addition to any royalty suspension supplement (RSS) for your lease under § 203.45 that results from a different wellbore.


(d) If your lease earns an RSV under § 203.31 and later produces from a deep well that is not a qualified well, the RSV is not forfeited or terminated, but you may not apply the RSV earned under § 203.31 to production from the non-qualified well.


(e) You owe minimum royalties or rentals in accordance with your lease terms notwithstanding any RSVs allowed under paragraphs (a) and (b) of § 203.31.


(f) Unused RSVs transfer to a successor lessee and expire with the lease.


§ 203.33 To which production do I apply the RSV earned by qualified phase 2 and phase 3 ultra-deep wells on my lease or in my unit?

(a) You must apply the RSV allowed in § 203.31(a) and (b) to gas volumes produced from qualified wells on or after May 18, 2007, reported on the Oil and Gas Operations Report, Part A (OGOR-A) for your lease under 30 CFR 1210.102. All gas production from qualified wells reported on the OGOR-A, including production not subject to royalty, counts toward the total lease RSV earned by both deep or ultra-deep wells on the lease.


(b) This paragraph applies to any lease with a qualified phase 2 or phase 3 ultra-deep well that is not within a BSEE-approved unit. Subject to the price conditions of § 203.36, you must apply the RSV prescribed in § 203.31 as required under the following paragraphs (b)(1) and (b)(2) of this section.


(1) You must apply the RSV to the earliest gas production occurring on and after the later of May 18, 2007, or the date the first qualified phase 2 or phase 3 ultra-deep well that earns your lease the RSV begins production (other than test production).


(2) You must apply the RSV to only gas production from qualified wells on your lease, regardless of their depth, for which you have met the requirements in § 203.35 or § 203.44.


(c) This paragraph applies to any lease with a qualified phase 2 or phase 3 ultra-deep well where all or part of the lease is within a BSEE-approved unit. Under the unit agreement, a share of the production from all the qualified wells in the unit participating area would be allocated to your lease each month according to the participating area percentages. Subject to the price conditions of § 203.36, you must apply the RSV prescribed in § 203.31 as follows:


(1) You must apply the RSV to the earliest gas production occurring on and after the later of May 18, 2007, or the date that the first qualified phase 2 or phase 3 ultra-deep well that earns your lease the RSV begins production (other than test production).


(2) You must apply the RSV to only gas production:


(i) From qualified wells on the non-unitized area of your lease, regardless of their depth, for which you have met the requirements in § 203.35 or § 203.44; and


(ii) Allocated to your lease under a BSEE-approved unit agreement from qualified wells on unitized areas of your lease and on other leases in participating areas of the unit, regardless of their depth, for which the requirements in § 203.35 or § 203.44 have been met. The allocated share under paragraph (a)(2)(ii) of this section does not increase the RSV for your lease.



Example:The east half of your lease A is unitized with all of lease B. There is one qualified phase 2 ultra-deep well on the non-unitized portion of lease A that earns lease A an RSV of 35 BCF under § 203.31, one qualified deep well on the unitized portion of lease A (drilled after the ultra-deep well on the non-unitized portion of that lease) and a qualified phase 2 ultra-deep well on lease B that earns lease B a 35 BCF RSV under § 203.31. The participating area percentages allocate 40 percent of production from both of the unit qualified wells to lease A and 60 percent to lease B. If the non-unitized qualified phase 2 ultra-deep well on lease A produces 12 BCF, and the unitized qualified well on lease A produces 18 BCF, and the qualified well on lease B produces 37 BCF, then the production volume from and allocated to lease A to which the lease A RSV applies is 34 BCF [12 + (18 + 37)(0.40)]. The production volume allocated to lease B to which the lease B RSV applies is 33 BCF [(18 + 37)(0.60)]. None of the volumes produced from a well that is not within a unit participating area may be allocated to other leases in the unit.

(d) You must begin paying royalties when the cumulative production of gas from all qualified wells on your lease, or allocated to your lease under paragraph (b) of this section, reaches the applicable RSV allowed under § 203.31 or § 203.41. For the month in which cumulative production reaches this RSV, you owe royalties on the portion of gas production from or allocated to your lease that exceeds the RSV remaining at the beginning of that month.


§ 203.34 To which production may an RSV earned by qualified phase 2 and phase 3 ultra-deep wells on my lease not be applied?

You may not apply an RSV earned under § 203.31:


(a) To production from completions less than 15,000 feet TVD SS, except in cases where the qualified well is re-perforated in the same reservoir previously perforated deeper than 15,000 feet TVD SS;


(b) To production from a deep well or ultra-deep well on any other lease, except as provided in paragraph (c) of § 203.33;


(c) To any liquid hydrocarbon (oil and condensate) volumes; or


(d) To production from a deep well or ultra-deep well that commenced drilling before:


(1) March 26, 2003, on a lease that is located entirely or partly in water less than 200 meters deep; or


(2) May 18, 2007, on a lease that is located entirely in water more than 200 meters deep.


§ 203.35 What administrative steps must I take to use the RSV earned by a qualified phase 2 or phase 3 ultra-deep well?

To use an RSV earned under § 203.31:


(a) You must notify the BSEE Regional Supervisor for Production and Development in writing of your intent to begin drilling operations on all your ultra-deep wells.


(b) Before beginning production, you must meet any production measurement requirements that the BSEE Regional Supervisor for Production and Development has determined are necessary under 30 CFR part 250, subpart L.


(c)(1) Within 30 days of the beginning of production from any wells that would become qualified phase 2 or phase 3 ultra-deep wells by satisfying the requirements of this section:


(i) Provide written notification to the BSEE Regional Supervisor for Production and Development that production has begun; and


(ii) Request confirmation of the size of the RSV earned by your lease.


(2) If you produced from a qualified phase 2 or phase 3 ultra-deep well before December 18, 2008, you must provide the information in paragraph (c)(1) of this section no later than January 20, 2009.


(d) If you cannot produce from a well that otherwise meets the criteria for a qualified phase 2 ultra-deep well that is an ultra-deep short sidetrack before May 3, 2009, on a lease that is located entirely or partly in water less than 200 meters deep, or before May 3, 2013, on a lease that is located entirely in water more than 200 meters but less than 400 meters deep, the BSEE Regional Supervisor for Production and Development may extend the deadline for beginning production for up to 1 year, based on the circumstances of the particular well involved, if it meets all the following criteria.


(1) The delay occurred after drilling reached the total depth in your well.


(2) Production (other than test production) was expected to begin from the well before May 3, 2009, on a lease that is located entirely or partly in water less than 200 meters deep or before May 3, 2013, on a lease that is located entirely in water more than 200 meters but less than 400 meters deep. You must provide a credible activity schedule with supporting documentation.


(3) The delay in beginning production is for reasons beyond your control, such as adverse weather and accidents which BSEE deems were unavoidable.


§ 203.36 Do I keep royalty relief if prices rise significantly?

(a) You must pay the Office of Natural Resources Revenue royalties on all gas production to which an RSV otherwise would be applied under § 203.33 for any calendar year in which the average daily closing New York Mercantile Exchange (NYMEX) natural gas price exceeds the applicable threshold price shown in the following table.


A price threshold in year 2007 dollars of . . .
Applies to . . .
(1) $10.15 per MMBtu,(i) The first 25 BCF of RSV earned under § 203.31(a) by a phase 2 ultra-deep well on a lease that is located in water partly or entirely less than 200 meters deep issued before December 18, 2008; and
(ii) Any RSV earned under § 203.31(b) by a phase 2 ultra-deep well.
(2) $4.55 per MMBtu,(i) Any RSV earned under § 203.31(a) by a phase 3 ultra-deep well unless the lease terms prescribe a different price threshold;
(ii) The last 10 BCF of the 35 BCF of RSV earned under § 203.31(a) by a phase 2 ultra-deep well on a lease that is located in water partly or entirely less than 200 meters deep issued before December 18, 2008, and that is not a non-converted lease;
(iii) The last 15 BCF of the 35 BCF of RSV earned under § 203.31(a) by a phase 2 ultra-deep well on a non-converted lease;
(iv) Any RSV earned under § 203.31(a) by a phase 2 ultra-deep well on a lease in water partly or entirely less than 200 meters deep issued on or after December 18, 2008, unless the lease terms prescribe a different price threshold; and
(v) Any RSV earned under § 203.31(a) by a phase 2 ultra-deep well on a lease in water entirely more than 200 meters deep and entirely less than 400 meters deep.
(3) $4.08 per MMBtu,(i) The first 20 BCF of RSV earned by a well that is located on a non-converted lease issued in OCS Lease Sale 178.
(4) $5.83 per MMBtu,(i) The first 20 BCF of RSV earned by a well that is located on a non-converted lease issued in OCS Lease Sales 180, 182, 184, 185, or 187.

(b) For purposes of paragraph (a) of this section, determine the threshold price for any calendar year after 2007 by:


(1) Determining the percentage of change during the year in the Department of Commerce’s implicit price deflator for the gross domestic product; and


(2) Adjusting the threshold price for the previous year by that percentage.


(c) The following examples illustrate how this section applies.



Example 1:Assume that a lessee drills and begins producing from a qualified phase 2 ultra-deep well in 2008 on a lease issued in 2004 in less than 200 meters of water that earns the lease an RSV of 35 BCF. Further, assume the well produces a total of 18 BCF by the end of 2009 and in both of those years, the average daily NYMEX closing natural gas price is less than $10.15 (adjusted for inflation after 2007). The lessee does not pay royalty on the 18 BCF because the gas price threshold under paragraph (a)(1) of this section applies to the first 25 BCF of this RSV earned by this phase 2 ultra-deep well. In 2010, the well produces another 13 BCF. In that year, the average daily closing NYMEX natural gas price is greater than $4.55 per MMBtu (adjusted for inflation after 2007), but less than $10.15 per MMBtu (adjusted for inflation after 2007). The first 7 BCF produced in 2010 will exhaust the first 25 BCF (that is subject to the $10.15 threshold) of the 35 BCF RSV that the well earned. The lessee must pay royalty on the remaining 6 BCF produced in 2010, because it is subject to the $4.55 per MMBtu threshold under paragraph (a)(2)(ii) of this section which was exceeded.


Example 2:Assume that a lessee:

(1) Drills and produces from well no.1, a qualified deep well in 2008 to a depth of 15,500 feet TVD SS that earns a 15 BCF RSV for the lease under § 203.41, which would be subject to a price threshold of $10.15 per MMBtu (adjusted for inflation after 2007), meaning the lease is partly or entirely in less than 200 meters of water;

(2) Later in 2008, drills and produces from well no. 2, a second qualified deep well to a depth of 17,000 feet TVD SS that earns no additional RSV (see § 203.41(c)(1)); and

(3) In 2015, drills and produces from well no. 3, a qualified phase 3 ultra-deep well that earns no additional RSV since the lease already has an RSV established by prior deep well production. Further assume that in 2015, the average daily closing NYMEX natural gas price exceeds $4.55 per MMBtu (adjusted for inflation after 2007) but does not exceed $10.15 per MMBtu (adjusted for inflation after 2007). In 2015, any remaining RSV earned by well no. 1 (which would have been applied to production from well nos. 1 and 2 in the intervening years), would be applied to production from all three qualified wells. Because the price threshold applicable to that RSV was not exceeded, the production from all three qualified wells would be royalty-free until the 15 BCF RSV earned by well no. 1 is exhausted.



Example 3:Assume the same initial facts regarding the three wells as in Example 2. Further assume that well no. 1 stopped producing in 2011 after it had produced 8 BCF, and that well no. 2 stopped producing in 2012 after it had produced 5 BCF. Two BCF of the RSV earned by well no. 1 remain. That RSV would be applied to production from well no. 3 until it is exhausted, and the lessee therefore would not pay royalty on those 2 BCF produced in 2015, because the $10.15 per MMBtu (adjusted for inflation after 2007) price threshold is not exceeded. The determination of which price threshold applies to deep gas production depends on when the first qualified well earned the RSV for the lease, not on which wells use the RSV.


Example 4:Assume that in February 2010, a lessee completes and begins producing from an ultra-deep well (at a depth of 21,500 feet TVD SS) on a lease located in 325 meters of water with no prior production from any deep well and no deep water royalty relief. The ultra-deep well would be a phase 2 ultra-deep well (see definition in § 203.0), and would earn the lease an RSV of 35 BCF under §§ 203.30 and 203.31. Further assume that the average daily closing NYMEX natural gas price exceeds $4.55 per MMBtu (adjusted for inflation after 2007) but does not exceed $10.15 per MMBtu (adjusted for inflation after 2007) during 2010. Because the lease is located in more than 200 but less than 400 meters of water, the $4.55 per MMBtu price threshold applies to the whole RSV (see paragraph (a)(2)(v) of this section), and the lessee will owe royalty on all gas produced from the ultra-deep well in 2010.

(d) You must pay any royalty due under this section no later than March 31 of the year following the calendar year for which you owe royalty. If you do not pay by that date, you must pay late payment interest under 30 CFR 1218.54 from April 1 until the date of payment.


(e) Production volumes on which you must pay royalty under this section count as part of your RSV.


Royalty Relief for Drilling Deep Gas Wells on Leases Not Subject to Deep Water Royalty Relief

§ 203.40 Which leases are eligible for royalty relief as a result of drilling a deep well or a phase 1 ultra-deep well?

Your lease may receive an RSV under §§ 203.41 through 203.44, and may receive an RSS under §§ 203.45 through 203.47, if it meets all the requirements of this section.


(a) The lease is located in the GOM wholly west of 87 degrees, 30 minutes West longitude in water depths entirely less than 400 meters deep.


(b) The lease has not produced gas or oil from a well with a perforated interval the top of which is 18,000 feet TVD SS or deeper that commenced drilling either:


(1) Before March 26, 2003, on a lease that is located partly or entirely in water less than 200 meters deep; or


(2) Before May 18, 2007, on a lease that is located in water entirely more than 200 meters and entirely less than 400 meters deep.


(c) In the case of a lease located partly or entirely in water less than 200 meters deep, the lease was issued in a lease sale held either:


(1) Before January 1, 2001;


(2) On or after January 1, 2001, and before January 1, 2004, and, in cases where the original lease terms provided for an RSV for deep gas production, the lessee has exercised the option provided for in § 203.49; or


(3) On or after January 1, 2004, and the lease terms provide for royalty relief under §§ 203.41 through 203.47. (Note: Because the original § 203.41 has been divided into new §§ 203.41 and 203.42 and subsequent sections have been redesignated as §§ 203.43 through 203.48, royalty relief in lease terms for leases issued on or after January 1, 2004, should be read as referring to §§ 203.41 through 203.48.)


(d) If the lease is located entirely in more than 200 meters and less than 400 meters of water, it must either:


(1) Have been issued before November 28, 1995, and not been granted deep water royalty relief under 43 U.S.C. 1337(a)(3)(C), added by section 302 of the Deep Water Royalty Relief Act; or


(2) Have been issued after November 28, 2000, and not been granted deep water royalty relief under §§ 203.60 through 203.79.


§ 203.41 If I have a qualified deep well or a qualified phase 1 ultra-deep well, what royalty relief would my lease earn?

(a) To qualify for a suspension volume under paragraphs (b) or (c) of this section, your lease must meet the requirements in § 203.40 and the requirements in the following table.


If your lease has not . . .
And if it later . . .
Then your lease . . .
(1) produced gas or oil from any deep well or ultra-deep well,Has a qualified deep well or qualified phase 1 ultra-deep well,earns an RSV specified in paragraph (b) of this section.
(2) produced gas or oil from a well with a perforated interval whose top is 18,000 feet TVD SS or deeper,Has a qualified deep well with a perforated interval whose top is 18,000 feet TVD SS or deeper or a qualified phase 1 ultra-deep well,earns an RSV specified in paragraph (c) of this section.

(b) If your lease meets the requirements in paragraph (a)(1) of this section, it earns the RSV prescribed in the following table:


If you have a qualified deep well or a qualified phase 1 ultra-deep well that is:
Then your lease earns an RSV on this volume of gas production:
(1) An original well with a perforated interval the top of which is from 15,000 to less than 18,000 feet TVD SS,15 BCF.
(2) A sidetrack with a perforated interval the top of which is from 15,000 to less than 18,000 feet TVD SS,4 BCF plus 600 MCF times sidetrack measured depth (rounded to the nearest 100 feet) but no more than 15 BCF.
(3) An original well with a perforated interval the top of which is at least 18,000 feet TVD SS,25 BCF.
(4) A sidetrack with a perforated interval the top of which is at least 18,000 feet TVD SS,4 BCF plus 600 MCF times sidetrack measured depth (rounded to the nearest 100 feet) but no more than 25 BCF.

(c) If your lease meets the requirements in paragraph (a)(2) of this section, it earns the RSV prescribed in the following table. The RSV specified in this paragraph is in addition to any RSV your lease already may have earned from a qualified deep well with a perforated interval whose top is from 15,000 feet to less than 18,000 feet TVD SS.


If you have a qualified deep well or a qualified phase 1 ultra-deep well that is . . .
Then you earn an RSV on this amount of gas production:
(1) An original well or a sidetrack with a perforated interval the top of which is from 15,000 to less than 18,000 feet TVD SS,0 BCF.
(2) An original well with a perforated interval the top of which is 18,000 feet TVD SS or deeper,10 BCF.
(3) A sidetrack with a perforated interval the top of which is 18,000 feet TVD SS or deeper,4 BCF plus 600 MCF times sidetrack measured depth (rounded to the nearest 100 feet) but no more than 10 BCF.

(d) Lessees may request a refund of or recoup royalties paid on production from qualified wells on a lease that is located in water entirely deeper than 200 meters but entirely less than 400 meters deep that:


(1) Occurs before December 18, 2008; and


(2) Is subject to application of an RSV under either § 203.31 or § 203.41.


(e) The following examples illustrate how this section applies, assuming your lease meets the location, prior production, and lease issuance conditions in § 203.40 and paragraph (a) of this section:



Example 1:If you have a qualified deep well that is an original well with a perforated interval the top of which is 16,000 feet TVD SS, your lease earns an RSV of 15 BCF under paragraph (b)(1) of this section. This RSV must be applied to gas production from all qualified wells on your lease, as prescribed in §§ 203.43 and 203.48. However, if the top of the perforated interval is 18,500 feet TVD SS, the RSV is 25 BCF according to paragraph (b)(3) of this section.


Example 2:If you have a qualified deep well that is a sidetrack, with a perforated interval the top of which is 16,000 feet TVD SS and a sidetrack measured depth of 6,789 feet, we round the measured depth to 6,800 feet and your lease earns an RSV of 8.08 BCF under paragraph (b)(2) of this section. This RSV would be applied to gas production from all qualified wells on your lease, as prescribed in §§ 203.43 and 203.48.


Example 3:If you have a qualified deep well that is a sidetrack, with a perforated interval the top of which is 16,000 feet TVD SS and a sidetrack measured depth of 19,500 feet, your lease earns an RSV of 15 BCF. This RSV would be applied to gas production from all qualified wells on your lease, as prescribed in §§ 203.43 and 203.48, even though 4 BCF plus 600 MCF per foot of sidetrack measured depth equals 15.7 BCF because paragraph (b)(2) of this section limits the RSV for a sidetrack at the amount an original well to the same depth would earn.


Example 4:If you have drilled and produced a deep well with a perforated interval the top of which is 16,000 feet TVD SS before March 26, 2003 (and the well therefore is not a qualified well and has earned no RSV under this section), and later drill:

(i) A deep well with a perforated interval the top of which is 17,000 feet TVD SS, your lease earns no RSV (see paragraph (c)(1) of this section);

(ii) A qualified deep well that is an original well with a perforated interval the top of which is 19,000 feet TVD SS, your lease earns an RSV of 10 BCF under paragraph (c)(2) of this section. This RSV would be applied to gas production from qualified wells on your lease, as prescribed in §§ 203.43 and 203.48; or

(iii) A qualified deep well that is a sidetrack with a perforated interval the top of which is 19,000 feet TVD SS, that has a sidetrack measured depth of 7,000 feet, your lease earns an RSV of 8.2 BCF under paragraph (c)(3) of this section. This RSV would be applied to gas production from qualified wells on your lease, as prescribed in §§ 203.43 and 203.48.



Example 5:If you have a qualified deep well that is an original well with a perforated interval the top of which is 16,000 feet TVD SS, and later drill a second qualified well that is an original well with a perforated interval the top of which is 19,000 feet TVD SS, we increase the total RSV for your lease from 15 BCF to 25 BCF under paragraph (c)(2) of this section. We will apply that RSV to gas production from all qualified wells on your lease, as prescribed in §§ 203.43 and 203.48. If the second well has a perforated interval the top of which is 22,000 feet TVD SS (instead of 19,000 feet), the total RSV for your lease would increase to 25 BCF only in 2 situations: (1) If the second well was a phase 1 ultra-deep well, i.e., if drilling began before May 18, 2007, or (2) the exception in § 203.31(b) applies. In both situations, your lease must be partly or entirely in less than 200 meters of water and production must begin on this well before May 3, 2009. If drilling of the second well began on or after May 18, 2007, the second well would be qualified as a phase 2 or phase 3 ultra-deep well and, unless the exception in § 203.31(b) applies, would not earn any additional RSV (as prescribed in § 203.30), so the total RSV for your lease would remain at 15 BCF.


Example 6:If you have a qualified deep well that is a sidetrack, with a perforated interval the top of which is 16,000 feet TVD SS and a sidetrack measured depth of 4,000 feet, and later drill a second qualified well that is a sidetrack, with a perforated interval the top of which is 19,000 feet TVD SS and a sidetrack measured depth of 8,000 feet, we increase the total RSV for your lease from 6.4 BCF [4 + (600 * 4,000)/1,000,000] to 15.2 BCF {6.4 + [4 + (600 * 8,000)/1,000,000)]} under paragraphs (b)(2) and (c)(3) of this section. We would apply that RSV to gas production from all qualified wells on your lease, as prescribed in §§ 203.43 and 203.48. The difference of 8.8 BCF represents the RSV earned by the second sidetrack that has a perforated interval the top of which is deeper than 18,000 feet TVD SS.

§ 203.42 What conditions and limitations apply to royalty relief for deep wells and phase 1 ultra-deep wells?

The conditions and limitations in the following table apply to royalty relief under § 203.41.


If . . .
Then . . .
(a) Your lease has produced gas or oil from a well with a perforated interval the top of which is 18,000 feet TVD SS or deeper,your lease cannot earn an RSV under § 203.41 as a result of drilling any subsequent deep wells or phase 1 ultra-deep wells.
(b) You determine RSV under § 203.41 for the first qualified deep well or qualified phase 1 ultra-deep well on your lease (whether an original well or a sidetrack) because you drilled and produced it within the time intervals set forth in the definitions for qualified wells,that determination establishes the total RSV available for that drilling depth interval on your lease (i.e., either 15,000-18,000 feet TVD SS, or 18,000 feet TVD SS and deeper), regardless of the number of subsequent qualified wells you drill to that depth interval.
(c) A qualified deep well or qualified phase 1 ultra-deep well on your lease is within a unitized portion of your lease,the RSV earned by that well under § 203.41 applies only to production from qualified wells on or allocated to your lease and not to other leases within the unit.
(d) Your qualified deep well or qualified phase 1 ultra-deep well is a directional well (either an original well or a sidetrack) drilled across a lease line,the lease with the perforated interval that initially produces earns the RSV. However, if the perforated interval crosses a lease line, the lease where the surface of the well is located earns the RSV.
(e) You earn an RSV under § 203.41,that RSV is in addition to any RSS for your lease under § 203.45 that results from a different wellbore.
(f) Your lease earns an RSV under § 203.41 and later produces from a well that is not a qualified well,the RSV is not forfeited or terminated, but you may not apply the RSV under § 203.41 to production from the non-qualified well.
(g) You qualify for an RSV under paragraphs (b) or (c) of § 203.41,you still owe minimum royalties or rentals in accordance with your lease terms.
(h) You transfer your lease,unused RSVs transfer to a successor lessee and expire with the lease.


Example to paragraph (b):If your first qualified deep well is a sidetrack with a perforated interval whose top is 16,000 feet TVD SS and earns an RSV of 12.5 BCF, and you later drill a qualified original deep well to 17,000 feet TVD SS, the RSV for your lease remains at 12.5 BCF and does not increase to 15 BCF. However, under paragraph (c) of § 203.41, if you subsequently drill a qualified deep well to a depth of 18,000 feet or greater TVD SS, you may earn an additional RSV.

§ 203.43 To which production do I apply the RSV earned from qualified deep wells or qualified phase 1 ultra-deep wells on my lease?

(a) You must apply the RSV prescribed in § 203.41(b) and (c) to gas volumes produced from qualified wells on or after May 3, 2004, reported on the OGOR-A for your lease under 30 CFR 1210.102, as and to the extent prescribed in §§ 203.43 and 203.48.


(1) Except as provided in paragraph (a)(2) of this section, all gas production from qualified wells reported on the OGOR-A, including production that is not subject to royalty, counts toward the lease RSV.


(2) Production to which an RSS applies under §§ 203.45 and 203.46 does not count toward the lease RSV.


(b) This paragraph applies to any lease with a qualified deep well or qualified phase 1 ultra-deep well when no part of the lease is within a BSEE-approved unit. Subject to the price conditions in § 203.48, you must apply the RSV prescribed in § 203.41 as required under the following paragraphs (b)(1) and (b)(2) of this section.


(1) You must apply the RSV to the earliest gas production occurring on and after the later of:


(i) May 3, 2004, for an RSV earned by a qualified deep well or qualified phase 1 ultra-deep well on a lease that is located entirely or partly in water less than 200 meters deep;


(ii) May 18, 2007, for an RSV earned by a qualified deep well on a lease that is located entirely in water more than 200 meters deep; or


(iii) The date that the first qualified well that earns your lease the RSV begins production (other than test production).


(2) You must apply the RSV to only gas production from qualified wells on your lease, regardless of their depth, for which you have met the requirements in § 203.35 or § 203.44.



Example 1:On a lease in water less than 200 meters deep, you began drilling an original deep well with a perforated interval the top of which is 18,200 feet TVD SS in September 2003, that became a qualified deep well in July 2004, when it began producing and using the RSV that it earned. You subsequently drill another original deep well with a perforated interval the top of which is 16,600 feet TVD SS, which becomes a qualified deep well when production begins in August 2008. The first well earned an RSV of 25 BCF (see § 203.41(a)(1) and (b)(3)). You must apply any remaining RSV each month beginning in August 2008 to production from both wells until the 25 BCF RSV is fully utilized according to paragraph (b)(2) of this section. If the second well had begun production in August 2009, it would not be a qualified deep well because it started production after expiration in May 2009 of the ability to qualify for royalty relief in this water depth, and could not share any of the remaining RSV (see definition of a qualified deep well in § 203.0).


Example 2:On a lease in water between 200 and 400 meters deep, you begin drilling an original deep well with a perforated interval the top of which is 17,100 feet TVD SS in November 2010 that becomes a qualified deep well in June 2011 when it begins producing and using the RSV. You subsequently drill another original deep well with a perforated interval the top of which is 15,300 feet TVD SS which becomes a qualified deep well by beginning production in October 2011 (see definition of a qualified deep well in § 203.0). Only the first well earns an RSV equal to 15 BCF (see § 203.41(a) and (b)). You must apply any remaining RSV each month beginning in October 2011 to production from both qualified deep wells until the 15 BCF RSV is fully utilized according to paragraph (b)(2) of this section.

(c) This paragraph applies to any lease with a qualified deep well or qualified phase 1 ultra-deep well when all or part of the lease is within a BSEE-approved unit. Under the unit agreement, a share of the production from all the qualified wells in the unit participating area would be allocated to your lease each month according to the participating area percentages. Subject to the price conditions in § 203.48, you must apply the RSV prescribed under § 203.41 as required under the following paragraphs (c)(1) through (3) of this section.


(1) You must apply the RSV to the earliest gas production occurring on and after the later of:


(i) May 3, 2004, for an RSV earned by a qualified well or qualified phase 1 ultra-deep well on a lease that is located entirely or partly in water less than 200 meters deep;


(ii) May 18, 2007, for an RSV earned by a qualified deep well on a lease that is located entirely in water more than 200 meters deep; or


(iii) The date that the first qualified well that earns your lease the RSV begins production (other than test production).


(2) You must apply the RSV to only gas production:


(i) From all qualified wells on the non-unitized area of your lease, regardless of their depth, for which you have met the requirements in § 203.35 or § 203.44; and,


(ii) Allocated to your lease under a BSEE-approved unit agreement from qualified wells on unitized areas of your lease and on unitized areas of other leases in the unit, regardless of their depth, for which the requirements in § 203.35 or § 203.44 have been met.


(3) The allocated share under paragraph (c)(2)(ii) of this section does not increase the RSV for your lease. None of the volumes produced from a well that is not within a unit participating area may be allocated to other leases in the unit.



Example:The east half of your lease A is unitized with all of lease B. There is one qualified 19,000-foot TVD SS deep well on the non-unitized portion of lease A, one qualified 18,500-foot TVD SS deep well on the unitized portion of lease A, and a qualified 19,400-foot TVD SS deep well on lease B. The participating area percentages allocate 32 percent of production from both of the unit qualified deep wells to lease A and 68 percent to lease B. If the non-unitized qualified deep well on lease A produces 12 BCF and the unitized qualified deep well on lease A produces 15 BCF, and the qualified deep well on lease B produces 10 BCF, then the production volume from and allocated to lease A to which the lease an RSV applies is 20 BCF [12 + (15 + 10) * (0.32)]. The production volume allocated to lease B to which the lease B RSV applies is 17 BCF [(15 + 10) * (0.68)].

(d) You must begin paying royalties when the cumulative production of gas from all qualified wells on your lease, or allocated to your lease under paragraph (c) of this section, reaches the applicable RSV allowed under § 203.31 or § 203.41. For the month in which cumulative production reaches this RSV, you owe royalties on the portion of gas production that exceeds the RSV remaining at the beginning of that month.


(e) You may not apply the RSV allowed under § 203.41 to:


(1) Production from completions less than 15,000 feet TVD SS, except in cases where the qualified deep well is re-perforated in the same reservoir previously perforated deeper than 15,000 feet TVD SS;


(2) Production from a deep well or phase 1 ultra-deep well on any other lease, except as provided in paragraph (c) of this section;


(3) Any liquid hydrocarbon (oil and condensate) volumes; or


(4) Production from a deep well or phase 1 ultra-deep well that commenced drilling before:


(i) March 26, 2003, on a lease that is located entirely or partly in water less than 200 meters deep, or


(ii) May 18, 2007, on a lease that is located entirely in water more than 200 meters deep.


§ 203.44 What administrative steps must I take to use the royalty suspension volume?

(a) You must notify the BSEE Regional Supervisor for Production and Development in writing of your intent to begin drilling operations on all deep wells and phase 1 ultra-deep wells; and


(b) Within 30 days of the beginning of production from all wells that would become qualified wells by satisfying the requirements of this section, you must:


(1) Provide written notification to the BSEE Regional Supervisor for Production and Development that production has begun; and


(2) Request confirmation of the size of the royalty suspension volume earned by your lease.


(c) Before beginning production, you must meet any production measurement requirements that the BSEE Regional Supervisor for Production and Development has determined are necessary under 30 CFR part 250, subpart L.


(d) You must provide the information in paragraph (b) of this section by January 20, 2009, if you produced before December 18, 2008, from a qualified deep well or qualified phase 1 ultra-deep well on a lease that is located entirely in water more than 200 meters and less than 400 meters deep.


(e) The BSEE Regional Supervisor for Production and Development may extend the deadline for beginning production for up to one year for a well that cannot begin production before the applicable date prescribed in the definition of “qualified deep well” in § 203.0 if it meets all of the following criteria.


(1) The well otherwise meets the criteria in the definition of a qualified deep well in § 203.0.


(2) The delay in production occurred after reaching total depth in the well.


(3) Production (other than test production) was expected to begin from the well before the applicable deadline in the definition of a qualified deep well in § 203.0. You must provide a credible activity schedule with supporting documentation.


(4) The delay in beginning production is for reasons beyond your control, such as adverse weather and accidents which BSEE deems were unavoidable.


§ 203.45 If I drill a certified unsuccessful well, what royalty relief will my lease earn?

Your lease may earn a royalty suspension supplement. Subject to paragraph (d) of this section, the royalty suspension supplement is in addition to any royalty suspension volume your lease may earn under § 203.41.


(a) If you drill a certified unsuccessful well and you satisfy the administrative requirements of § 203.47, subject to the price conditions in § 203.48, your lease earns an RSS shown in the following table. The RSS is shown in billions of cubic feet of gas equivalent (BCFE) or in thousands of cubic feet of gas equivalent (MCFE) and is applicable to oil and gas production as prescribed in § 203.46.


If you have a certified unsuccessful well that is: –
Then your lease earns an RSS on this volume of oil and gas production as prescribed in this section and § 203.46: –
(1) An original well and your lease has not produced gas or oil from a deep well or an ultra-deep well,5 BCFE.
(2) A sidetrack (with a sidetrack measured depth of at least 10,000 feet) and your lease has not produced gas or oil from a deep well or an ultra-deep well,0.8 BCFE plus 120 MCFE times sidetrack measured depth (rounded to the nearest 100 feet) but no more than 5 BCFE.
(3) An original well or a sidetrack (with a sidetrack measured depth of at least 10,000 feet) and your lease has produced gas or oil from a deep well with a perforated interval the top of which is from 15,000 to less than 18,000 feet TVD SS,2 BCFE.

(b) This paragraph applies to oil and gas volumes you report on the OGOR-A for your lease under 30 CFR 1210.102.


(1) You must apply the RSS prescribed in paragraph (a) of this section, in accordance with the requirements in § 203.46, to all oil and gas produced from the lease:


(i) On or after December 18, 2008, if your lease is located in water more than 200 meters but less than 400 meters deep; or


(ii) On or after May 3, 2004, if your lease is located in water partly or entirely less than 200 meters deep.


(2) Production to which an RSV applies under §§ 203.31 through 203.33 and §§ 203.41 through 203.43 does not count toward the lease RSS. All other production, including production that is not subject to royalty, counts toward the lease RSS.



Example 1:If you drill a certified unsuccessful well that is an original well to a target 19,000 feet TVD SS, your lease earns an RSS of 5 BCFE that would be applied to gas and oil production if your lease has not previously produced from a deep well or an ultra-deep well, or you earn an RSS of 2 BCFE of gas and oil production if your lease has previously produced from a deep well with a perforated interval from 15,000 to less than 18,000 feet TVD SS, as prescribed in § 203.46.


Example 2:If you drill a certified unsuccessful well that is a sidetrack that reaches a target 19,000 feet TVD SS, that has a sidetrack measured depth of 12,545 feet, and your lease has not produced gas or oil from any deep well or ultra-deep well, BSEE rounds the sidetrack measured depth to 12,500 feet and your lease earns an RSS of 2.3 BCFE of gas and oil production as prescribed in § 203.45.

(c) The conversion from oil to gas for using the royalty suspension supplement is specified in § 203.73.


(d) Each lease is eligible for up to two royalty suspension supplements. Therefore, the total royalty suspension supplement for a lease cannot exceed 10 BCFE.


(1) You may not earn more than one royalty suspension supplement from a single wellbore.


(2) If you begin drilling a certified unsuccessful well on one lease but the completion target is on a second lease, the entire royalty suspension supplement belongs to the second lease. However, if the target straddles a lease line, the lease where the surface of the well is located earns the royalty suspension supplement.


(e) If the same wellbore that earns an RSS as a certified unsuccessful well later produces from a perforated interval the top of which is 15,000 feet TVD or deeper and becomes a qualified well, it will be subject to the following conditions:


(1) Beginning on the date production starts, you must stop applying the royalty suspension supplement earned by that wellbore to your lease production.


(2) If the completion of this qualified well is on your lease or, in the case of a directional well, is on another lease, then you must subtract from the royalty suspension volume earned by that qualified well the royalty suspension supplement amounts earned by that wellbore that have already been applied either on your lease or any other lease. The difference represents the royalty suspension volume earned by the qualified well.


(f) If the same wellbore that earned a royalty suspension supplement later has a sidetrack drilled from that wellbore, you are not required to subtract any royalty suspension supplement earned by that wellbore from the royalty suspension volume that may be earned by the sidetrack.


(g) You owe minimum royalties or rentals in accordance with your lease terms notwithstanding any royalty suspension supplements under this section.


§ 203.46 To which production do I apply the royalty suspension supplements from drilling one or two certified unsuccessful wells on my lease?

(a) Subject to the requirements of §§ 203.40, 203.43, 203.45, 203.47, and 203.48 you must apply an RSS in § 203.45 to the earliest oil and gas production:


(1) Occurring on and after the day you file the information under § 203.47(b),


(2) From, or allocated under a BSEE-approved unit agreement to, the lease on which the certified unsuccessful well was drilled, without regard to the drilling depth of the well producing the gas or oil.


(b) If you have a royalty suspension volume for the lease under § 203.41, you must use the royalty suspension volumes for gas produced from qualified wells on the lease before using royalty suspension supplements for gas produced from qualified wells.



Example to paragraph (b):You have two shallow oil wells on your lease. Then you drill a certified unsuccessful well and earn a royalty suspension supplement of 5 BCFE. Thereafter, you begin production from an original well that is a qualified well that earns a royalty suspension volume of 15 BCF. You use only 2 BCFE of the royalty suspension supplement before the oil wells deplete. You must use up the 15 BCF of royalty suspension volume before you use the remaining 3 BCFE of the royalty suspension supplement for gas produced from the qualified well.

(c) If you have no current production on which to apply the RSS allowed under § 203.45, your RSS applies to the earliest subsequent production of gas and oil from, or allocated under a BSEE-approved unit agreement to, your lease.


(d) Unused royalty suspension supplements transfer to a successor lessee and expire with the lease.


(e) You may not apply the RSS allowed under § 203.45 to production from any other lease, except for production allocated to your lease from a BSEE-approved unit agreement. If your certified unsuccessful well is on a lease subject to a BSEE-approved unit agreement, the lessees of other leases in the unit may not apply any portion of the RSS for your lease to production from the other leases in the unit.


(f) You must begin or resume paying royalties when cumulative gas and oil production from, or allocated under a BSEE-approved unit agreement to, your lease (excluding any gas produced from qualified wells subject to a royalty suspension volume allowed under § 203.41) reaches the applicable royalty suspension supplement. For the month in which the cumulative production reaches this royalty suspension supplement, you owe royalties on the portion of gas or oil production that exceeds the amount of the royalty suspension supplement remaining at the beginning of that month.


§ 203.47 What administrative steps do I take to obtain and use the royalty suspension supplement?

(a) Before you start drilling a well on your lease targeted to a reservoir at least 18,000 feet TVD SS, you must notify, in writing, the BSEE Regional Supervisor for Production and Development of your intent to begin drilling operations and the depth of the target.


(b) After drilling the well, you must provide the BSEE Regional Supervisor for Production and Development within 60 days after reaching the total depth in your well:


(1) Information that allows BSEE to confirm that you drilled a certified unsuccessful well as defined under § 203.0, including:


(i) Well log data, if your original well or sidetrack does not meet the producibility requirements of 30 CFR part 550, subpart A; or


(ii) Well log, well test, seismic, and economic data, if your well does meet the producibility requirements of 30 CFR part 550, subpart A; and


(2) Information that allows BSEE to confirm the size of the royalty suspension supplement for a sidetrack, including sidetrack measured depth and supporting documentation.


(c) If you commenced drilling a well that otherwise meets the criteria for a certified unsuccessful well on a lease located entirely in more than 200 meters and entirely less than 400 meters of water on or after May 18, 2007, and finished it before December 18, 2008, you must provide the information in paragraph (b) of this section no later than February 17, 2009.


§ 203.48 Do I keep royalty relief if prices rise significantly?

(a) You must pay royalties on all gas and oil production for which an RSV or an RSS otherwise would be allowed under §§ 203.40 through 203.47 for any calendar year when the average daily closing NYMEX natural gas price exceeds the applicable threshold price shown in the following table.


For a lease located in water . . .
And issued . . .
The applicable threshold price is . . .
(1) Partly or entirely less than 200 meters deep,before December 18, 2008,$10.15 per MMBtu, adjusted annually after calendar year 2007 for inflation.
(2) Partly or entirely less than 200 meters deep,after December 18, 2008,$4.55 per MMBtu, adjusted annually after calendar year 2007 for inflation unless the lease terms prescribe a different price threshold.
(3) Entirely more than 200 meters and entirely less than 400 meters deep,on any date,$4.55 per MMBtu, adjusted annually after calendar year 2007 for inflation unless the lease terms prescribe a different price threshold.

(b) Determine the threshold price for any calendar year after 2007 by adjusting the threshold price in the previous year by the percentage that the implicit price deflator for the gross domestic product, as published by the Department of Commerce, changed during the calendar year.


(c) You must pay any royalty due under this section no later than March 31 of the year following the calendar year for which you owe royalty. If you do not pay by that date, you must pay late payment interest under 30 CFR 1218.54 from April 1 until the date of payment.


(d) Production volumes on which you must pay royalty under this section count as part of your RSV and RSS.


§ 203.49 May I substitute the deep gas drilling provisions in this part for the deep gas royalty relief provided in my lease terms?

(a) You may exercise an option to replace the applicable lease terms for royalty relief related to deep-well drilling with those in § 203.0 and §§ 203.40 through 203.48 if you have a lease issued with royalty relief provisions for deep-well drilling. Such leases:


(1) Must be issued as part of an OCS lease sale held after January 1, 2001, and before April 1, 2004; and


(2) Must be located wholly west of 87 degrees, 30 minutes West longitude in the GOM entirely or partly in water less than 200 meters deep.


(b) To exercise the option under paragraph (a) of this section, you must notify, in writing, the BSEE Regional Supervisor for Production and Development of your decision before September 1, 2004, or 180 days after your lease is issued, whichever is later, and specify the lease and block number.


(c) Once you exercise the option under paragraph (a) of this section, you are subject to all the activity, timing, and administrative requirements pertaining to deep gas royalty relief as specified in §§ 203.40 through 203.48.


(d) Exercising the option under paragraph (a) of this section is irrevocable. If you do not exercise this option, then the terms of your lease apply.


Royalty Relief for End-of-Life Leases

§ 203.50 Who may apply for end-of-life royalty relief?

You may apply for royalty relief in two situations.


(a) Your end-of-life lease (as defined in § 203.2) is an oil and gas lease and has average daily production of at least 100 barrels of oil equivalent (BOE) per month (as calculated in § 203.73) in at least 12 of the past 15 months. The most recent of these 12 months are considered the qualifying months. These 12 months should reflect the basic operation you intend to use until your resources are depleted. If you changed your operation significantly (e.g., begin re-injecting rather than recovering gas) during the qualifying months, or if you do so while we are processing your application, we may defer action on your application until you revise it to show the new circumstances.


(b) Your end-of-life lease is other than an oil and gas lease (e.g., sulphur) and has production in at least 12 of the past 15 months. The most recent of these 12 months are considered the qualifying months.


§ 203.51 How do I apply for end-of-life royalty relief?

You must submit a complete application and the required fee to the appropriate BSEE Regional Director. Your BSEE regional office will provide specific guidance on the report formats. A complete application for relief includes:


(a) An administrative information report (specified in § 203.83) and


(b) A net revenue and relief justification report (specified in § 203.84).


§ 203.52 What criteria must I meet to get relief?

(a) To qualify for relief, you must demonstrate that the sum of royalty payments over the 12 qualifying months exceeds 75 percent of the sum of net revenues (before-royalty revenues minus allowable costs, as defined in § 203.84).


(b) To re-qualify for relief, e.g., either applying for additional relief on top of relief already granted, or applying for relief sometime after your earlier agreement terminated, you must demonstrate that:


(1) You have met the criterion listed in paragraph (a) of this section, and


(2) The 12 required qualifying months of operation have occurred under the current royalty arrangement.


§ 203.53 What relief will BSEE grant?

(a) If we approve your application and you meet certain conditions, we will reduce the pre-application effective royalty rate by one-half on production up to the relief volume amount. If you produce more than the relief volume amount:


(1) We will impose a royalty rate equal to 1.5 times the effective royalty rate on your additional production up to twice the relief volume amount; and


(2) We will impose a royalty rate equal to the effective rate on all production greater than twice the relief volume amount.


(b) Regardless of the level of production or prices (see § 203.54), royalty payments due under end-of-life relief will not exceed the royalty obligations that would have been due at the effective royalty rate.


(1) The effective royalty rate is the average lease rate paid on production during the 12 qualifying months.


(2) The relief volume amount is the average monthly BOE production for the 12 qualifying months.


§ 203.54 How does my relief arrangement for an oil and gas lease operate if prices rise sharply?

In those months when your current reference price rises by at least 25 percent above your base reference price, you must pay the effective royalty rate on all monthly production.


(a) Your current reference price is a weighted average of daily closing prices on the NYMEX for light sweet crude oil and natural gas over the most recent full 12 calendar months;


(b) Your base reference price is a weighted average of daily closing prices on the NYMEX for light sweet crude oil and natural gas during the qualifying months; and


(c) Your weighting factors are the proportions of your total production volume (in BOE) provided by oil and gas during the qualifying months.


§ 203.55 Under what conditions can my end-of-life royalty relief arrangement for an oil and gas lease be ended?

(a) If you have an end-of-life royalty relief arrangement, you may renounce it at any time. The lease rate will return to the effective rate during the qualifying period in the first full month following our receipt of your renouncement of the relief arrangement.


(b) If you pay the effective lease rate for 12 consecutive months, we will terminate your relief. The lease rate will return to the effective rate in the first full month following this termination.


(c) We may stipulate in the letter of approval for individual cases certain events that would cause us to terminate relief because they are inconsistent with an end-of-life situation.


§ 203.56 Does relief transfer when a lease is assigned?

Yes. Royalty relief is based on the lease circumstances, not ownership. It transfers upon lease assignment.


Royalty Relief for Pre-Act Deep Water Leases and for Development and Expansion Projects

§ 203.60 Who may apply for royalty relief on a case-by-case basis in deep water in the Gulf of Mexico or offshore of Alaska?

You may apply for royalty relief under §§ 203.61(b) and 203.62 for an individual lease, unit or project if you:


(a) Hold a pre-Act lease (as defined in § 203.0) that we have assigned to an authorized field (as defined in § 203.0);


(b) Propose an expansion project (as defined in § 203.0); or


(c) Propose a development project (as defined in § 203.0).


§ 203.61 How do I assess my chances for getting relief?

You may ask for a nonbinding assessment (a formal opinion on whether a field would qualify for royalty relief) before turning in your first complete application on an authorized field. This field must have a qualifying well under 30 CFR part 550, subpart A, or be on a lease that has allocated production under an approved unit agreement.


(a) To request a nonbinding assessment, you must:


(1) Submit a draft application in the format and detail specified in guidance from the BSEE regional office for the GOM;


(2) Propose to drill at least one more appraisal well if you get a favorable assessment; and


(3) Pay a fee under § 203.3.


(b) You must wait at least 90 days after receiving our assessment to apply for relief under § 203.62.


(c) This assessment is not binding because a complete application may contain more accurate information that does not support our original assessment. It will help you decide whether your proposed inputs for evaluating economic viability and your supporting data and assumptions are adequate.


§ 203.62 How do I apply for relief?

(a) You must send a complete application and the required fee to the BSEE Regional Director for your region.


(b) Your application for royalty relief offshore Alaska or in deep water in the GOM must include an original and two copies (one set of digital information) of:


(1) Administrative information report;


(2) Economic viability and relief justification report;


(3) G&G report;


(4) Engineering report;


(5) Production report; and


(6) Cost report.


(c) Section 203.82 explains why we are authorized to require these reports.


(d) Sections 203.81, 203.83, and 203.85 through 203.89 describe what these reports must include. The BSEE regional office for your region will guide you on the format for the required reports, and we encourage you to contact this office before preparing your application for this guidance.


§ 203.63 Does my application have to include all leases in the field?

(a) For authorized fields, we will accept only one joint application for all leases that are part of the designated field on the date of application, except as provided in paragraph (a)(3) of this section and § 203.64. However, we will evaluate all acreage that may eventually become part of the authorized field. Therefore, if you have any other leases that you believe may eventually be part of the authorized field, you must submit data for these leases according to § 203.81.


(1) The Regional Director maintains a Field Names Master List with updates of all leases in each designated field.


(2) To avoid sharing proprietary data with other lessees on the field, you may submit your proprietary G&G report separately from the rest of your application. Your application is not complete until we receive all the required information for each lease on the field. We will not disclose proprietary data when explaining our assumptions and reasons for our determinations under § 203.67.


(3) We will not require a joint application if you show good cause and honest effort to get all lessees in the field to participate. If you must exclude a lease from your application because its lessee will not participate, that lease is ineligible for the royalty relief for the designated field.


(b) If your application seeks only relief for a development project or an expansion project, your application does not have to include all leases in the field.


§ 203.64 How many applications may I file on a field or a development project?

You may file one complete application for royalty relief during the life of the field or for a development project or an expansion project designed to produce a reservoir or set of reservoirs. However, you may send another application if:


(a) You are eligible to apply for a redetermination under § 203.74;


(b) You apply for royalty relief for an expansion project;


(c) You withdraw the application before we make a determination; or


(d) You apply for end-of-life royalty relief.


§ 203.65 How long will BSEE take to evaluate my application?

(a) We will determine within 20 working days if your application for royalty relief is complete. If your application is incomplete, we will explain in writing what it needs. If you withdraw a complete application, you may reapply.


(b) We will evaluate your first application on a field within 180 days, evaluate your first application on a development project or an expansion project within 150 days and evaluate a redetermination under § 203.75 within 120 days after we determine that it is complete.


(c) We may ask to extend the review period for your application under the conditions in the following table.


If . . .
Then we may . . .
(1) We need more records to audit sunk costs,Ask to extend the 120-day or 180-day evaluation period. The extension we request will equal the number of days between when you receive our request for records and the day we receive the records.
(2) We cannot evaluate your application for a valid reason, such as missing vital information or inconsistent or inconclusive supporting data,Add another 30 days. We may add more than 30 days, but only if you agree.
(3) We need more data, explanations, or revision,Ask to extend the 120-day or 180-day evaluation period. The extension we request will equal the number of days between when you receive our request and the day we receive the information.

(d) We may change your assumptions under § 203.62 if our technical evaluation reveals others that are more appropriate. We may consult with you before a final decision and will explain any changes.


(e) We will notify all designated lease operators within a field when royalty relief is granted.


§ 203.66 What happens if BSEE does not act in the time allowed?

If we do not act within the timeframes established under § 203.65, you get royalty relief according to the following table.


If you apply for royalty relief for
And we do not decide within the time specified,
As long as you
(a) An authorized field,You get the minimum suspension volumes specified in § 203.69,Abide by §§ 203.70 and 203.76.
(b) An expansion project,You get a royalty suspension for the first year of production,Abide by §§ 203.70 and 203.76.
(c) A development project,You get a royalty suspension for initial production for the number of months that a decision is delayed beyond the stipulated timeframes set by § 203.65, plus all the royalty suspension volume for which you qualify,Abide by §§ 203.70 and 203.76.

§ 203.67 What economic criteria must I meet to get royalty relief on an authorized field or project?

We will not approve applications if we determine that royalty relief cannot make the field, development project, or expansion project economically viable. Your field or project must be uneconomic while you are paying royalties and must become economic with royalty relief.


§ 203.68 What pre-application costs will BSEE consider in determining economic viability?

(a) We will not consider ineligible costs as set forth in § 203.89(h) in determining economic viability for purposes of royalty relief.


(b) We will consider sunk costs according to the following table.


We will . . .
When determining . . .
(1) Include sunk costs,Whether a field that includes a pre-Act lease which has not produced, other than test production, before the application or redetermination submission date needs relief to become economic.
(2) Not include sunk costs,Whether an authorized field, a development project, or an expansion project can become economic with full relief (see § 203.67).
(3) Not include sunk costs,How much suspension volume is necessary to make the field, a development project, or an expansion project economic (see § 203.69(c)).
(4) Include sunk costs for the project discovery well on each lease,Whether a development project or an expansion project needs relief to become economic.

§ 203.69 If my application is approved, what royalty relief will I receive?

If we approve your application, subject to certain conditions, we will not collect royalties on a specified suspension volume for your field, development project, or expansion project. Suspension volumes include volumes allocated to a lease under an approved unit agreement, but exclude any volumes of production that are not normally royalty-bearing under the lease or the regulations of this chapter (e.g., fuel gas).


(a) For authorized fields, the minimum royalty-suspension volumes are:


(1) 17.5 million barrels of oil equivalent (MMBOE) for fields in 200 to 400 meters of water;


(2) 52.5 MMBOE for fields in 400 to 800 meters of water; and


(3) 87.5 MMBOE for fields in more than 800 meters of water.


(b) For development projects, any relief we grant applies only to project wells and replaces the royalty relief, if any, with which we issued your lease.


(c) If your project is economic given the royalty relief with which we issued your lease, we will reject the application.


(d) If the lease has earned or may earn deep gas royalty relief under §§ 203.40 through 203.49 or ultra-deep gas royalty relief under §§ 203.30 through 203.36, we will take the deep gas royalty relief or ultra-deep gas royalty relief into account in determining whether further royalty relief for a development project is necessary for production to be economic.


(e) If neither paragraph (c) nor (d) of this section apply, the minimum royalty suspension volumes are as shown in the following table:


For . . .
The minimum royalty suspension volume is . . .
Plus . . .
(1) RS leases in the GOM or leases offshore Alaska,A volume equal to the combined royalty suspension volumes (or the volume equivalent based on the data in your approved application for other forms of royalty suspension) with which BSEE issued the leases participating in the application that have or plan a well into a reservoir identified in the application,10 percent of the median of the distribution of known recoverable resources upon which BSEE based approval of your application from all reservoirs included in the project.
(2) Leases offshore Alaska or other deep water GOM leases issued in sales after November 28, 2000,A volume equal to 10 percent of the median of the distribution of known recoverable resources upon which BSEE based approval of your application from all reservoirs included in the project.

(f) If your application includes pre-Act leases in different categories of water depth, we apply the minimum royalty suspension volume for the deepest such lease then assigned to the field. We base the water depth and makeup of a field on the water-depth delineations in the “Lease Terms and Economic Conditions” map and the “Fields Directory” documents and updates in effect at the time your application is deemed complete. These publications are available from the BSEE Gulf of Mexico Regional Office.


(g) You will get a royalty suspension volume above the minimum if we determine that you need more to make the field or development project economic.


(h) For expansion projects, the minimum royalty suspension volume equals 10 percent of the median of the distribution of known recoverable resources upon which we based approval of your application from all reservoirs included in your project plus any suspension volumes required under § 203.66. If we determine that your expansion project may be economic only with more relief, we will determine and grant you the royalty suspension volume necessary to make the project economic.


(i) The royalty suspension volume applicable to specific leases will continue through the end of the month in which cumulative production reaches that volume. You must calculate cumulative production from all the leases in the authorized field or project that are entitled to share the royalty suspension volume.


§ 203.70 What information must I provide after BSEE approves relief?

You must submit reports to us as indicated in the following table. Sections 203.81, 203.90, and 203.91 describe what these reports must include. The BSEE Regional Office for your region will prescribe the formats.


Required report
When due to BSEE
Due date extensions
(a) Fabricator’s confirmation report.Within 18 months after approval of relief.BSEE Director may grant you an extension under § 203.79(c) for up to 6 months.
(b) Post-production report.Within 120 days after the start of production that is subject to the approved royalty suspension volume.With acceptable justification from you, the BSEE Regional Director for your region may extend the due date up to 30 days.

§ 203.71 How does BSEE allocate a field’s suspension volume between my lease and other leases on my field?

The allocation depends on when production occurs, when we issued the lease, when we assigned it to the field, and whether we award the volume suspension by an approved application or establish it in the lease terms, as prescribed in this section.


(a) If your authorized field has an approved royalty suspension volume under §§ 203.67 and 203.69, we will suspend payment of royalties on production from all leases in the field that participate in the application until their cumulative production equals the approved volume. The following conditions also apply:


If . . .
Then . . .
And . . .
(1) We assign an eligible lease to your authorized field after we approve relief,We will not change your authorized field’s royalty suspension volume determined under § 203.69,Production from the assigned eligible lease(s) counts toward the royalty suspension volume for the authorized field, but the eligible lease will not share any remaining royalty suspension volume for the authorized field after the eligible lease has produced the volume applicable under 30 CFR 560.114.
(2) We assign a pre-Act or post-November 2000 deep water lease to your field after we approve your application,We will not change your field’s royalty suspension volume,The assigned lease(s) may share in any remaining royalty relief by filing the short-form application specified in § 203.83 and authorized in § 203.82. An assigned RS lease also gets any portion of its royalty suspension volume remaining even after the field has produced the approved relief volume.
(3) We assign another lease that you operate to your field while we are evaluating your application,In our evaluation of your authorized field, we will take into account the value of any royalty relief the added lease already has under 30 CFR 560.114 or its lease document. If we find your authorized field still needs additional royalty suspension volume, that volume will be at least the combined royalty suspension volume to which all added leases on the field are entitled, or the minimum suspension volume of the authorized field, whichever is greater,(i) You toll the time period for evaluation until you modify your application to be consistent with the newly constituted field;

(ii) We have an additional 60 days to review the new information; and

(iii) The assigned pre-Act lease or royalty suspension lease shares the royalty suspension we grant to the newly constituted field. An eligible lease does not share the royalty suspension we grant to the new field. If you do not agree to toll, we will have to reject your application due to incomplete information. Production from an assigned eligible lease counts toward the royalty suspension volume that we grant under § 203.69 for your authorized field, but you will not owe royalty on production from the eligible lease until it has produced the volume applicable under 30 CFR 560.114.
(4) We assign another operator’s lease to your field while we are evaluating your application,We will change your field’s minimum suspension volume provided the assigned lease joins the application and is entitled to a larger minimum suspension volume,(i) You both toll the time period for evaluation until both of you modify your application to be consistent with the new field;

(ii) We have an additional 60 days to review the new information; and

(iii) The assigned lease(s) shares the royalty suspension we grant to the new field. If you (the original applicant) do not agree to toll, the other operator’s lease retains any suspension volume it has or may share in any relief that we grant by filing the short form application specified in § 203.83 and authorized in § 203.82.
(5) We reassign a well on a pre-Act, eligible, or royalty suspension lease from field A to field B,The past production from the well counts toward the royalty suspension volume that we grant under § 203.69 to field B,For any field based relief, the past production for that well will not count toward any royalty suspension volume that we grant under § 203.69 to field A. Moreover, past production from that well will count toward the royalty suspension volume applicable for the lease under 30 CFR 560.114 if the well is on an eligible lease or under 30 CFR 560.124 if the well is on a royalty suspension lease.

(b) When a project has more than one lease, the royalty suspension volume for each lease equals that lease’s actual production from the project (or production allocated under an approved unit agreement) until total production for all leases in the project equals the project’s approved royalty suspension volume.


(c) You may receive a royalty-suspension volume only if your entire lease is west of 87 degrees, 30 minutes West longitude. If the field lies on both sides of this meridian, only leases located entirely west of the meridian will receive a royalty-suspension volume.


§ 203.72 Can my lease receive more than one suspension volume?

Yes. You may apply for royalty relief that involves more than one suspension volume under § 203.62 in two circumstances.


(a) Each field that includes your lease may receive a separate royalty-suspension volume, if it meets the evaluation criteria of § 203.67.


(b) An expansion project on your lease may receive a separate royalty-suspension volume, even if we have already granted a royalty-suspension volume to the field that encompasses the project. But the reserves associated with the project must not have been part of our original determination, and the project must meet the evaluation criteria of § 203.67.


§ 203.73 How do suspension volumes apply to natural gas?

You must measure natural gas production under the royalty-suspension volume as follows: 5.62 thousand cubic feet of natural gas, measured in accordance with 30 CFR part 250, subpart L, equals one barrel of oil equivalent.


§ 203.74 When will BSEE reconsider its determination?

You may request a redetermination after we withdraw approval or after you renounce royalty relief, unless we withdraw approval due to your providing false or intentionally inaccurate information. Under certain conditions you may also request a redetermination if we deny your application or if you want your approved royalty suspension volume to change. In these instances, to be eligible for a redetermination, at least one of the following four conditions must occur.


(a) You have significant new G&G data and you previously have not either requested a redetermination or reapplied for relief after we withdrew approval or you relinquished royalty relief. “Significant” means that the new G&G data:


(1) Results from drilling new wells or getting new three-dimensional seismic data and information (but not reinterpreting old data);


(2) Did not exist at the time of the earlier application; and


(3) Changes your estimates of gross resource size, quality, or projected flow rates enough to materially affect the results of our earlier determination.


(b) You demonstrate in your new application that the technology that most efficiently develops this field or lease was not considered or deemed feasible in the original application. Your newly proposed technology must improve the profitability, under equivalent market conditions, of the field or lease relative to the development system proposed in the prior application.


(c) Your current reference price decreases by more than 25 percent from your base reference price as calculated under this paragraph.


(1) Your current reference price is a weighted-average of daily closing prices on the NYMEX for light sweet crude oil and natural gas over the most recent full 12 calendar months;


(2) Your base reference price is a weighted average of daily closing prices on the NYMEX for light sweet crude oil and natural gas for the full 12 calendar months preceding the date of your most recently approved application for this royalty relief; and


(3) The weighting factors are the proportions of the total production volume (in BOE) for oil and gas associated with the most likely scenario (identified in §§ 203.85 and 203.88) from your most recently approved application for this royalty relief.


(d) Before starting to build your development and production system, you have revised your estimated development costs, and they are more than 120 percent of the eligible development costs associated with the most likely scenario from your most recently approved application for this royalty relief.


§ 203.75 What risk do I run if I request a redetermination?

If you request a redetermination after we have granted you a suspension volume, you could lose some or all of the previously granted relief. This can happen because you must file a new complete application and pay the required fee, as discussed in § 203.62. We will evaluate your application under § 203.67 using the conditions prevailing at the time of your redetermination request. In our evaluation, we may find that you should receive a larger, equivalent, smaller, or no suspension volume. This means we could find that you do not qualify for the amount of relief previously granted or for any relief at all.


§ 203.76 When might BSEE withdraw or reduce the approved size of my relief?

We will withdraw approval of relief for any of the following reasons.


(a) You change the type of development system proposed in your application (e.g., change from a fixed platform to floating production system, or from an independent development and production system to one with subsea wells tied back to a host production facility, etc.).


(b) You do not start building the proposed development and production system within 18 months of the date we approved your application, unless the BSEE Director grants you an extension under § 203.79(c). If you start building the proposed system and then suspend its construction before completion, and you do not restart continuous building of the proposed system within 18 months of our approval, we will withdraw the relief we granted.


(c) Your actual development costs are less than 80 percent of the eligible development costs estimated in your application’s most likely scenario, and you do not report that fact in your post-production development report (§ 203.70). Development costs are those expenditures defined in § 203.89(b) incurred between the application submission date and start of production. If you report this fact in the post-production development report, you may retain the lesser of 50 percent of the original royalty suspension volume or 50 percent of the median of the distribution of the potentially recoverable resources anticipated in your application.


(d) We granted you a royalty-suspension volume after you qualified for a redetermination under § 203.74(c), and we find out your actual development costs are less than 90 percent of the eligible development costs associated with your application’s most likely scenario. Development costs are those expenditures defined in § 203.89(b) incurred between your application submission date and start of production.


(e) You do not send us the fabrication confirmation report or the post-production development report, or you provide false or intentionally inaccurate information that was material to our granting royalty relief under this section. You must pay royalties and late-payment interest determined under 30 U.S.C. 1721 and 30 CFR 1218.54 on all volumes for which you used the royalty suspension. You also may be subject to penalties under other provisions of law.


§ 203.77 May I voluntarily give up relief if conditions change?

Yes, you may voluntarily give up relief by sending a letter to that effect to the BSEE Regional office for your region.


§ 203.78 Do I keep relief approved by BSEE under this part for my lease, unit or project if prices rise significantly?

If prices rise above a base price threshold for light sweet crude oil or natural gas, you must pay full royalties on production otherwise subject to royalty relief approved by BSEE under §§ 203.60-203.77 for your lease, unit or project as prescribed in this section.


(a) The following table shows the base price threshold for various types of leases, subject to paragraph (b) of this section. Note that, for post-November 2000 deepwater leases in the GOM, price thresholds apply on a lease basis, so different leases on the same development project or expansion project approved for royalty relief may have different price thresholds.


For . . .
The base price threshold is . . .
(1) Pre-Act leases in the GOM,set by statute.
(2) Post-November 2000 deep water leases in the GOM or leases offshore of Alaska for which the lease or Notice of Sale set a base price threshold,indicated in your original lease agreement or, if none, those in the Notice of Sale under which your lease was issued.
(3) Post-November 2000 deep water leases in the GOM or leases offshore of Alaska for which the lease or Notice of Sale did not set a base price threshold,the threshold set by statute for pre-Act leases.

(b) An exception may occur if we determine that the price thresholds in paragraphs (a)(2) or (a)(3) of this section mean the royalty suspension volume set under § 203.69 and in lease terms would provide inadequate encouragement to increase production or development, in which circumstance we could specify a different set of price thresholds on a case-by-case basis.


(c) Suppose your base oil price threshold set under paragraph (a) is $28.00 per barrel, and the daily closing NYMEX light sweet crude oil prices for the previous calendar year exceeds $28.00 per barrel, as adjusted in paragraph (h) of this section. In this case, we retract the royalty relief authorized in this subpart and you must:


(1) Pay royalties on all oil production for the previous year at the lease stipulated royalty rate plus interest (under 30 U.S.C. 1721 and 30 CFR 1218.54) by March 31 of the current calendar year, and


(2) Pay royalties on all your oil production in the current year.


(d) Suppose your base gas price threshold set under paragraph (a) is $3.50 per million British thermal units (Btu), and the daily closing NYMEX light sweet crude oil prices for the previous calendar year exceeds $3.50 per million Btu, as adjusted in paragraph (h) of this section. In this case, we retract the royalty relief authorized in this subpart and you must:


(1) Pay royalties on all gas production for the previous year at the lease stipulated royalty rate plus interest (under 30 U.S.C. 1721 and 30 CFR 1218.54) by March 31 of the current calendar year, and


(2) Pay royalties on all your gas production in the current year.


(e) Production under both paragraphs (c) and (d) of this section counts as part of the royalty-suspension volume.


(f) You are entitled to a refund or credit, with interest, of royalties paid on any production (that counts as part of the royalty-suspension volume):


(1) Of oil if the arithmetic average of the closing prices for the current calendar year is $28.00 per barrel or less, as adjusted in paragraph (h) of this section, and


(2) Of gas if the arithmetic average of the closing natural gas prices for the current calendar year is $3.50 per million Btu or less, as adjusted in paragraph (h) of this section.


(g) You must follow our regulations in the Office of Natural Resources Revenue, 30 CFR chapter XII, for receiving refunds or credits.


(h) We change the prices referred to in paragraphs (c), (d), and (f) of this section periodically. For pre-Act leases, these prices change during each calendar year after 1994 by the percentage that the implicit price deflator for the gross domestic product changed during the preceding calendar year. For post-November 2000 deepwater leases, these prices change as indicated in the lease instrument or in the Notice of Sale under which we issued the lease.


§ 203.79 How do I appeal BSEE’s decisions related to royalty relief for a deepwater lease or a development or expansion project?

(a) Once we have designated your lease as part of a field and notified you and other affected operators of the designation, you can request reconsideration by sending the BSEE Director a letter within 15 days that also states your reasons. The BSEE Director’s response is the final agency action.


(b) Our decisions on your application for relief from paying royalty under § 203.67 and the royalty-suspension volumes under § 203.69 are final agency actions.


(c) If you cannot start construction by the deadline in § 203.76(b) for reasons beyond your control (e.g., strike at the fabrication yard), you may request an extension up to 1 year by writing the BSEE Director and stating your reasons. The BSEE Director’s response is the final agency action.


(d) We will notify you of all final agency actions by certified mail, return receipt requested. Final agency actions are not subject to appeal to the Interior Board of Land Appeals under 30 CFR part 290 and 43 CFR part 4. They are judicially reviewable under section 10(a) of the Administrative Procedure Act (5 U.S.C. 702) only if you file an action within 30 days of the date you receive our decision.


§ 203.80 When can I get royalty relief if I am not eligible for royalty relief under other sections in the subpart?

We may grant royalty relief when it serves the statutory purposes summarized in § 203.1 and our formal relief programs, including but not limited to the applicable levels of the royalty suspension volumes and price thresholds, provide inadequate encouragement to promote development or increase production. Unless your lease lies offshore of Alaska or wholly west of 87 degrees, 30 minutes West longitude in the GOM, your lease must be producing to qualify for relief. Before you may apply for royalty relief apart from our programs for end-of-life leases or for pre-Act deep water leases and development and expansion projects, we must agree that your lease or project has two or more of the following characteristics:


(a) The lease has produced for a substantial period and the lessee can recover significant additional resources. Significant additional resources mean enough to allow production for at least a year more than would be profitable without royalty relief.


(b) Valuable facilities (e.g., a platform or pipeline that would be removed upon lease relinquishment) exist that we do not expect a successor lessee to use. If the facilities are located off the lease, their preservation must depend on continued production from the lease applying for royalty relief. We will only consider an allocable share of costs for off-lease facilities in the relief application.


(c) A substantial risk exists that no new lessee will recover the resources.


(d) The lessee made major efforts to reduce operating costs too recently to use the formal program for royalty relief (e.g., recent significant change in operations).


(e) Circumstances beyond the lessee’s control, other than water depth, preclude reliance on one of the existing royalty relief programs.


Required Reports

§ 203.81 What supplemental reports do royalty-relief applications require?

(a) You must send us the supplemental reports, indicated in the following table by an X, that apply to your field. Sections 203.83 through 203.91 describe these reports in detail.


Required reports
End-of-life lease
Deep water
Expansion project
Pre-act lease
Development project
(1) Administrative information ReportXXXX
(2) Net revenue & relief justification reportX
(3) Economic viability & relief justification report (RSVP model inputs justified by other required reports)XXX
(4) G&G reportXXX
(5) Engineering reportXXX
(6) Production reportXXX
(7) Deep water cost reportXXX
(8) Fabricator’s confirmation reportXXX
(9) Post-production development reportXXX

(b) You must certify that all information in your application, fabricator’s confirmation and post-production development reports is accurate, complete, and conforms to the most recent content and presentation guidelines available from the BSEE Regional office for your region.


(c) With your application and post-production development report, you must submit an additional report prepared by an independent CPA that:


(1) Assesses the accuracy of the historical financial information in your report; and


(2) Certifies that the content and presentation of the financial data and information conform to our most recent guidelines on royalty relief. This means the data and information must:


(i) Include only eligible costs that are incurred during the qualification months; and


(ii) Be shown in the proper format.


(d) You must identify the people in the CPA firm who prepared the reports referred to in paragraph (c) of this section and make them available to us to respond to questions about the historical financial information. We may also further review your records to support this information.


§ 203.82 What is BSEE’s authority to collect this information?

The Office of Management and Budget (OMB) approved the information collection requirements in part 203 under 44 U.S.C. 3501 et seq., and assigned OMB control number 1010-0071.


(a) We use the information to determine whether royalty relief will result in production that wouldn’t otherwise occur. We rely largely on your information to make these determinations.


(1) Your application for royalty relief must contain enough information on finances, economics, reservoirs, G&G characteristics, production, and engineering estimates for us to determine whether:


(i) We should grant relief under the law, and


(ii) The requested relief will ultimately recover more resources and return a reasonable profit on project investments.


(2) Your fabricator confirmation and post-production development reports must contain enough information for us to verify that your application reasonably represented your plans.


(b) Applicants (respondents) are Federal OCS oil and gas lessees. Applications are required to obtain or retain a benefit. Therefore, if you apply for royalty relief, you must provide this information. We will protect information considered proprietary under applicable law and under regulations at § 203.63 and 30 CFR part 250.


(c) The Paperwork Reduction Act of 1995 requires us to inform you that we may not conduct or sponsor, and you are not required to respond to, a collection of information unless it displays a currently valid OMB control number.


(d) Send comments regarding any aspect of the collection of information under this part, including suggestions for reducing the burden, to the Information Collection Clearance Officer, Bureau of Safety and Environmental Enforcement, 45600 Woodland Road, Sterling, VA 20166.


[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 36148, June 6, 2016]


§ 203.83 What is in an administrative information report?

This report identifies the field or lease for which royalty relief is requested and must contain the following items:


(a) The field or lease name;


(b) The serial number of leases we have assigned to the field, names of the lease title holders of record, the lease operators, and whether any lease is part of a unit;


(c) Well number, API number, location, and status of each well that has been drilled on the field or lease or project (not required for non-oil and gas leases);


(d) The location of any new wells proposed under the terms of the application (not required for non-oil and gas leases);


(e) A description of field or lease history;


(f) Full information as to whether you will pay royalties or a share of production to anyone other than the United States, the amount you will pay, and how much you will reduce this payment if we grant relief;


(g) The type of royalty relief you are requesting;


(h) Confirmation that BOEM approved a DOCD or supplemental DOCD (Deep Water expansion project applications only); and


(i) A narrative description of the development activities associated with the proposed capital investments and an explanation of proposed timing of the activities and the effect on production (Deep Water applications only).


§ 203.84 What is in a net revenue and relief justification report?

This report presents cash flow data for 12 qualifying months, using the format specified in the “Guidelines for the Application, Review, Approval, and Administration of Royalty Relief for End-of-Life Leases”, U.S. Department of the Interior, BSEE. Qualifying months for an oil and gas lease are the most recent 12 months out of the last 15 months that you produced at least 100 BOE per day on average. Qualifying months for other than oil and gas leases are the most recent 12 of the last 15 months having some production.


(a) The cash flow table you submit must include historical data for:


(1) Lease production subject to royalty;


(2) Total revenues;


(3) Royalty payments out of production;


(4) Total allowable costs; and


(5) Transportation and processing costs.


(b) Do not include in your cash flow table the non-allowable costs listed at 30 CFR 1220.013 or:


(1) OCS rental payments on the lease(s) in the application;


(2) Damages and losses;


(3) Taxes;


(4) Any costs associated with exploratory activities;


(5) Civil or criminal fines or penalties;


(6) Fees for your royalty relief application; and


(7) Costs associated with existing obligations (e.g., royalty overrides or other forms of payment for acquiring the lease, depreciation on previously acquired equipment or facilities).


(c) We may, in reviewing and evaluating your application, disallow costs when you have not shown they are necessary to operate the lease, or if they are inconsistent with end-of-life operations.


§ 203.85 What is in an economic viability and relief justification report?

This report should show that your project appears economic without royalties and sunk costs using the RSVP model we provide. The format of the report and the assumptions and parameters we specify are found in the “Guidelines for the Application, Review, Approval and Administration of the Deep Water Royalty Relief Program,” U.S. Department of the Interior, BSEE. Clearly justify each parameter you set in every scenario you specify in the RSVP. You may provide supplemental information, including your own model and results. The economic viability and relief justification report must contain the following items for an oil and gas lease.


(a) Economic assumptions we provide which include:


(1) Starting oil and gas prices;


(2) Real price growth;


(3) Real cost growth or decline rate, if any;


(4) Base year;


(5) Range of discount rates; and


(6) Tax rate (for use in determining after-tax sunk costs).


(b) Analysis of projected cash flow (from the date of the application using annual totals and constant dollar values) which shows:


(1) Oil and gas production;


(2) Total revenues;


(3) Capital expenditures;


(4) Operating costs;


(5) Transportation costs; and


(6) Before-tax net cash flow without royalties, overrides, sunk costs, and ineligible costs.


(c) Discounted values which include:


(1) Discount rate used (selected from within the range we specify).


(2) Before-tax net present value without royalties, overrides, sunk costs, and ineligible costs.


(d) Demonstrations that:


(1) All costs, gross production, and scheduling are consistent with the data in the G&G, engineering, production, and cost reports (§§ 203.86 through 203.89) and


(2) The development and production scenarios provided in the various reports are consistent with each other and with the proposed development system. You can use up to three scenarios (conservative, most likely, and optimistic), but you must link each to a specific range on the distribution of resources from the RSVP Resource Module.


§ 203.86 What is in a G&G report?

This report supports the reserve and resource estimates used in the economic evaluation and must contain each of the following elements.


(a) Seismic data which includes:


(1) Non-interpreted 2D/3D survey lines reflecting any available state-of-the-art processing technique in a format readable by BSEE and specified by the deep water royalty relief guidelines;


(2) Interpreted 2D/3D seismic survey lines reflecting any available state-of-the-art processing technique identifying all known and prospective pay horizons, wells, and fault cuts;


(3) Digital velocity surveys in the format of the GOM region’s letter to lessees of 10/1/90;


(4) Plat map of “shot points;” and


(5) “Time slices” of potential horizons.


(b) Well data which includes:


(1) Hard copies of all well logs in which –


(i) The 1-inch electric log shows pay zones and pay counts and lithologic and paleo correlation markers at least every 500-feet,


(ii) The 1-inch type log shows missing sections from other logs where faulting occurs,


(iii) The 5-inch electric log shows pay zones and pay counts and labeled points used in establishing resistivity of the formation, 100 percent water saturated (Ro) and the resistivity of the undisturbed formation (Rt), and


(iv) The 5-inch porosity logs show pay zones and pay counts and labeled points used in establishing reservoir porosity or labeled points showing values used in calculating reservoir porosity such as bulk density or transit time;


(2) Digital copies of all well logs spudded before December 1, 1995;


(3) Core data, if available;


(4) Well correlation sections;


(5) Pressure data;


(6) Production test results;


(7) Pressure-volume-temperature analysis, if available; and


(8) A table listing the wells and completions, and indicating which sands and fault blocks will be targeted for completion or recompletion.


(c) Map interpretations which includes for each reservoir in the field:


(1) Structure maps consisting of top and base of sand maps showing well and seismic shot point locations;


(2) Isopach maps for net sand, net oil, net gas, all with well locations;


(3) Maps indicating well surface and bottom hole locations, location of development facilities, and shot points; and


(4) An explanation for excluding the reservoirs you are not planning to develop.


(d) Reservoir-specific data which includes:


(1) Probability of reservoir occurrence with hydrocarbons;


(2) Probability the hydrocarbon in the reservoir is all oil and the probability it is all gas;


(3) Distributions or point estimates (accompanied by explanations of why distributions less appropriately reflect the uncertainty) for the parameters used to estimate reservoir size, i.e., acres and net thickness;


(4) Most likely values for porosity, salt water saturation, volume factor for oil formation, and volume factor for gas formation;


(5) Distributions or point estimates (accompanied by explanations of why distributions less appropriately reflect the uncertainty) for recovery efficiency (in percent) and oil or gas recovery (in stock-tank-barrels per acre-foot or in thousands of cubic feet per acre foot);


(6) A gas/oil ratio distribution or point estimate (accompanied by explanations of why distributions less appropriately reflect the uncertainty) for each reservoir;


(7) A yield distribution or point estimate (accompanied by explanations of why distributions less appropriately reflect the uncertainty) for each gas reservoir; and


(8) Reserve or resource distribution by reservoir.


(e) Aggregated reserve and resource data which includes:


(1) The aggregated distributions for reserves and resources (in BOE) and oil fraction for your field computed by the resource module of our RSVP model;


(2) A description of anticipated hydrocarbon quality (i.e., specific gravity); and


(3) The ranges within the aggregated distribution for reserves and resources that define the development and production scenarios presented in the engineering and production reports. Typically there will be three ranges specified by two positive reserve and resource points on the aggregated distribution. The range at the low end of the distribution will be associated with the conservative development and production scenario; the middle range will be related to the most likely development and production scenario; and, the high end range will be consistent with the optimistic development and production scenario.


§ 203.87 What is in an engineering report?

This report defines the development plan and capital requirements for the economic evaluation and must contain the following elements.


(a) A description of the development concept (e.g., tension leg platform, fixed platform, floater type, subsea tieback, etc.) which includes:


(1) Its size along with basic design specifications and drawings; and


(2) The construction schedule.


(b) An identification of planned wells which includes:


(1) The number;


(2) The type (platform, subsea, vertical, deviated, horizontal);


(3) The well depth;


(4) The drilling schedule;


(5) The kind of completion (single, dual, horizontal, etc.); and


(6) The completion schedule.


(c) A description of the production system equipment which includes:


(1) The production capacity for oil and gas and a description of limiting component(s);


(2) Any unusual problems (low gravity, paraffin, etc.);


(3) All subsea structures;


(4) All flowlines; and


(5) Schedule for installing the production system.


(d) A discussion of any plans for multi-phase development which includes the conceptual basis for developing in phases and goals or milestones required for starting later phases.


(e) A set of development scenarios consisting of activity timing and scale associated with each of up to three production profiles (conservative, most likely, optimistic) provided in the production report for your field (§ 203.88). Each development scenario and production profile must denote the likely events should the field size turn out to be within a range represented by one of the three segments of the field size distribution. If you send in fewer than three scenarios, you must explain why fewer scenarios are more efficient across the whole field size distribution.


§ 203.88 What is in a production report?

This report supports your development and production timing and product quality expectations and must contain the following elements.


(a) Production profiles by well completion and field that specify the actual and projected production by year for each of the following products: oil, condensate, gas, and associated gas. The production from each profile must be consistent with a specific level of reserves and resources on the aggregated distribution of field size.


(b) Production drive mechanisms for each reservoir.


§ 203.89 What is in a cost report?

This report lists all actual and projected costs for your field, must explain and document the source of each cost estimate, and must identify the following elements.


(a) Sunk costs. Report sunk costs in dollars not adjusted for inflation and only if you have documentation.


(b) Appraisal, delineation and development costs. Base them on actual spending, current authorization for expenditure, engineering estimates, or analogous projects. These costs cover:


(1) Platform well drilling and average depth;


(2) Platform well completion;


(3) Subsea well drilling and average depth;


(4) Subsea well completion;


(5) Production system (platform); and


(6) Flowline fabrication and installation.


(c) Production costs based on historical costs, engineering estimates, or analogous projects. These costs cover:


(1) Operation;


(2) Equipment; and


(3) Existing royalty overrides (we will not use the royalty overrides in evaluations).


(d) Transportation costs, based on historical costs, engineering estimates, or analogous projects. These costs cover:


(1) Oil or gas tariffs from pipeline or tankerage;


(2) Trunkline and tieback lines; and


(3) Gas plant processing for natural gas liquids.


(e) Abandonment costs, based on historical costs, engineering estimates, or analogous projects. You should provide the costs to plug and abandon only wells and to remove only production systems for which you have not incurred costs as of the time of application submission. You should also include a point estimate or distribution of prospective salvage value for all potentially reusable facilities and materials, along with the source and an explanation of the figures provided.


(f) A set of cost estimates consistent with each one of up to three field-development scenarios and production profiles (conservative, most likely, optimistic). You should express costs in constant real dollar terms for the base year. You may also express the uncertainty of each cost estimate with a minimum and maximum percentage of the base value.


(g) A spending schedule. You should provide costs for each year (in real dollars) for each category in paragraphs (a) through (f) of this section.


(h) A summary of other costs which are ineligible for evaluating your need for relief. These costs cover:


(1) Expenses before first discovery on the field;


(2) Cash bonuses;


(3) Fees for royalty relief applications;


(4) Lease rentals, royalties, and payments of net profit share and net revenue share;


(5) Legal expenses;


(6) Damages and losses;


(7) Taxes;


(8) Interest or finance charges, including those embedded in equipment leases;


(9) Fines or penalties; and


(10) Money spent on previously existing obligations (e.g., royalty overrides or other forms of payment for acquiring a financial position in a lease, expenditures for plugging wells and removing and abandoning facilities that existed on the application submission date).


§ 203.90 What is in a fabricator’s confirmation report?

This report shows you have committed in a timely way to the approved system for production. This report must include the following (or its equivalent for unconventionally acquired systems):


(a) A copy of the contract(s) under which the fabrication yard is building the approved system for you;


(b) A letter from the contractor building the system to the BSEE Regional Director for your region certifying when construction started on your system; and


(c) Evidence of an appropriate down payment or equal action that you’ve started acquiring the approved system.


§ 203.91 What is in a post-production development report?

For each cost category in the deep water cost report, you must compare actual costs up to the date when production starts to your planned pre-production costs. If your application included more than one development scenario, you need to compare actual costs with those in your scenario of most likely development. Also, you must have this report certified by an independent CPA according to § 203.81(c).


Subpart C – Federal and Indian Oil [Reserved]

Subpart D – Federal and Indian Gas [Reserved]

Subpart E – Solid Minerals, General [Reserved]

Subpart F [Reserved]

Subpart G – Other Solid Minerals [Reserved]

Subpart H – Geothermal Resources [Reserved]

Subpart I – OCS Sulfur [Reserved]

SUBCHAPTER B – OFFSHORE

PART 250 – OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER CONTINENTAL SHELF


Authority:30 U.S.C. 1751, 31 U.S.C. 9701, 33 U.S.C. 1321(j)(1)(C), 43 U.S.C. 1334.



Source:76 FR 64462, Oct. 18, 2011, unless otherwise noted.


Editorial Note:Nomenclature changes to part 250 appear at 77 FR 50891, Aug. 22, 2012.

Subpart A – General

Authority and Definition of Terms

§ 250.101 Authority and applicability.

The Secretary of the Interior (Secretary) authorized the Bureau of Safety and Environmental Enforcement (BSEE) to regulate oil, gas, and sulphur exploration, development, and production operations on the Outer Continental Shelf (OCS). Under the Secretary’s authority, the Director requires that all operations:


(a) Be conducted according to the OCS Lands Act (OCSLA), the regulations in this part, BSEE orders, the lease or right-of-way, and other applicable laws, regulations, and amendments; and


(b) Conform to sound conservation practice to preserve, protect, and develop mineral resources of the OCS to:


(1) Make resources available to meet the Nation’s energy needs;


(2) Balance orderly energy resource development with protection of the human, marine, and coastal environments;


(3) Ensure the public receives a fair and equitable return on the resources of the OCS;


(4) Preserve and maintain free enterprise competition; and


(5) Minimize or eliminate conflicts between the exploration, development, and production of oil and natural gas and the recovery of other resources.


§ 250.102 What does this part do?

(a) This part 250 contains the regulations of the BSEE Offshore program that govern oil, gas, and sulphur exploration, development, and production operations on the OCS. When you conduct operations on the OCS, you must submit requests, applications, and notices, or provide supplemental information for BSEE approval.


(b) The following table of general references shows where to look for information about these processes.


For information about . . .
Refer to . . .
(1) Applications for permit to drill,30 CFR part 250, subpart D.
(2) Development and Production Plans (DPP),30 CFR part 550, subpart B.
(3) Downhole commingling,30 CFR part 250, subpart K.
(4) Exploration Plans (EP),30 CFR part 550, subpart B.
(5) Flaring,30 CFR part 250, subpart K.
(6) Gas measurement,30 CFR part 250, subpart L.
(7) Off-lease geological and geophysical permits,30 CFR part 551.
(8) Oil spill financial responsibility coverage,30 CFR part 553.
(9) Oil and gas production safety systems,30 CFR part 250, subpart H.
(10) Oil spill response plans,30 CFR part 254.
(11) Oil and gas well-completion operations,30 CFR part 250, subpart E.
(12) Oil and gas well-workover operations,30 CFR part 250, subpart F.
(13) Decommissioning Activities,30 CFR part 250, subpart Q.
(14) Platforms and structures,30 CFR part 250, subpart I.
(15) Pipelines and Pipeline Rights-of-Way,30 CFR part 250, subpart J and 30 CFR part 550, subpart J.
(16) Sulphur operations,30 CFR part 250, subpart P.
(17) Training,30 CFR part 250, subpart O.
(18) Unitization,30 CFR part 250, subpart M.
(19) Safety and Environmental Management Systems (SEMS),30 CFR part 250, subpart S.

[76 FR 64462, Oct. 18, 2011, as amended at 36148, June 6, 2016]


§ 250.103 Where can I find more information about the requirements in this part?

BSEE may issue Notices to Lessees and Operators (NTLs) that clarify, supplement, or provide more detail about certain requirements. NTLs may also outline what you must provide as required information in your various submissions to BSEE.


§ 250.104 How may I appeal a decision made under BSEE regulations?

To appeal orders or decisions issued under BSEE regulations in 30 CFR parts 250 to 282, follow the procedures in 30 CFR part 290.


§ 250.105 Definitions.

Terms used in this part will have the meanings given in the Act and as defined in this section:


Act means the OCS Lands Act, as amended (43 U.S.C. 1331 et seq.).


Affected State means with respect to any program, plan, lease sale, or other activity proposed, conducted, or approved under the provisions of the Act, any State:


(1) The laws of which are declared, under section 4(a)(2) of the Act, to be the law of the United States for the portion of the OCS on which such activity is, or is proposed to be, conducted;


(2) Which is, or is proposed to be, directly connected by transportation facilities to any artificial island or installation or other device permanently or temporarily attached to the seabed;


(3) Which is receiving, or according to the proposed activity, will receive oil for processing, refining, or transshipment that was extracted from the OCS and transported directly to such State by means of vessels or by a combination of means including vessels;


(4) Which is designated by the Secretary as a State in which there is a substantial probability of significant impact on or damage to the coastal, marine, or human environment, or a State in which there will be significant changes in the social, governmental, or economic infrastructure, resulting from the exploration, development, and production of oil and gas anywhere on the OCS; or


(5) In which the Secretary finds that because of such activity there is, or will be, a significant risk of serious damage, due to factors such as prevailing winds and currents to the marine or coastal environment in the event of any oil spill, blowout, or release of oil or gas from vessels, pipelines, or other transshipment facilities.


Air pollutant means any airborne agent or combination of agents for which the Environmental Protection Agency (EPA) has established, under section 109 of the Clean Air Act, national primary or secondary ambient air quality standards.


Analyzed geological information means data collected under a permit or a lease that have been analyzed. Analysis may include, but is not limited to, identification of lithologic and fossil content, core analysis, laboratory analyses of physical and chemical properties, well logs or charts, results from formation fluid tests, and descriptions of hydrocarbon occurrences or hazardous conditions.


Ancillary activities mean those activities on your lease or unit that you:


(1) Conduct to obtain data and information to ensure proper exploration or development of your lease or unit; and


(2) Can conduct without Bureau of Ocean Energy Management (BOEM) approval of an application or permit.


Archaeological interest means capable of providing scientific or humanistic understanding of past human behavior, cultural adaptation, and related topics through the application of scientific or scholarly techniques, such as controlled observation, contextual measurement, controlled collection, analysis, interpretation, and explanation.


Archaeological resource means any material remains of human life or activities that are at least 50 years of age and that are of archaeological interest.


Arctic OCS means the Beaufort Sea and Chukchi Sea Planning Areas (for more information on these areas, see the Proposed Final OCS Oil and Gas Leasing Program for 2012-2017 (June 2012) at http://www.boem.gov/Oil-and-Gas-Energy-Program/Leasing/Five-Year-Program/2012-2017/Program-Area-Maps/index.aspx).


Arctic OCS conditions means, for the purposes of this part, the conditions operators can reasonably expect during operations on the Arctic OCS. Such conditions, depending on the time of year, include, but are not limited to: Extreme cold, freezing spray, snow, extended periods of low light, strong winds, dense fog, sea ice, strong currents, and dangerous sea states. Remote location, relative lack of infrastructure, and the existence of subsistence hunting and fishing areas are also characteristic of the Arctic region.


Attainment area means, for any air pollutant, an area that is shown by monitored data or that is calculated by air quality modeling (or other methods determined by the Administrator of EPA to be reliable) not to exceed any primary or secondary ambient air quality standards established by EPA.


Best available and safest technology (BAST) means the best available and safest technologies that the BSEE Director determines to be economically feasible wherever failure of equipment would have a significant effect on safety, health, or the environment.


Best available control technology (BACT) means an emission limitation based on the maximum degree of reduction for each air pollutant subject to regulation, taking into account energy, environmental and economic impacts, and other costs. The Regional Supervisor will verify the BACT on a case-by-case basis, and it may include reductions achieved through the application of processes, systems, and techniques for the control of each air pollutant.


Cap and flow system means an integrated suite of equipment and vessels, including a capping stack and associated flow lines, that, when installed or positioned, is used to control the flow of fluids escaping from the well by conveying the fluids to the surface to a vessel or facility equipped to process the flow of oil, gas, and water. A cap and flow system is a high pressure system that includes the capping stack and piping necessary to convey the flowing fluids through the choke manifold to the surface equipment.


Capping stack means a mechanical device, including one that is pre-positioned, that can be installed on top of a subsea or surface wellhead or blowout preventer to stop the uncontrolled flow of fluids into the environment.


Coastal environment means the physical, atmospheric, and biological components, conditions, and factors that interactively determine the productivity, state, condition, and quality of the terrestrial ecosystem from the shoreline inward to the boundaries of the coastal zone.


Coastal zone means the coastal waters (including the lands therein and thereunder) and the adjacent shorelands (including the waters therein and thereunder) strongly influenced by each other and in proximity to the shorelands of the several coastal States. The coastal zone includes islands, transition and intertidal areas, salt marshes, wetlands, and beaches. The coastal zone extends seaward to the outer limit of the U.S. territorial sea and extends inland from the shorelines to the extent necessary to control shorelands, the uses of which have a direct and significant impact on the coastal waters, and the inward boundaries of which may be identified by the several coastal States, under the authority in section 305(b)(1) of the Coastal Zone Management Act (CZMA) of 1972.


Competitive reservoir means a reservoir in which there are one or more producible or producing well completions on each of two or more leases or portions of leases, with different lease operating interests, from which the lessees plan future production.


Containment dome means a non-pressurized container that can be used to collect fluids escaping from the well or equipment below the sea surface or from seeps by suspending the device over the discharge or seep location. The containment dome includes all of the equipment necessary to capture and convey fluids to the surface.


Correlative rights when used with respect to lessees of adjacent leases, means the right of each lessee to be afforded an equal opportunity to explore for, develop, and produce, without waste, minerals from a common source.


Data means facts and statistics, measurements, or samples that have not been analyzed, processed, or interpreted.


Departures mean approvals granted by the appropriate BSEE or BOEM representative for operating requirements/procedures other than those specified in the regulations found in this part. These requirements/procedures may be necessary to control a well; properly develop a lease; conserve natural resources, or protect life, property, or the marine, coastal, or human environment.


Development means those activities that take place following discovery of minerals in paying quantities, including but not limited to geophysical activity, drilling, platform construction, and operation of all directly related onshore support facilities, and which are for the purpose of producing the minerals discovered.


Development geological and geophysical (G&G) activities mean those G&G and related data-gathering activities on your lease or unit that you conduct following discovery of oil, gas, or sulphur in paying quantities to detect or imply the presence of oil, gas, or sulphur in commercial quantities.


Director means the Director of BSEE of the U.S. Department of the Interior, or an official authorized to act on the Director’s behalf.


District Manager means the BSEE officer with authority and responsibility for operations or other designated program functions for a district within a BSEE Region. For activities on the Alaska OCS, any reference in this part to District Manager means the BSEE Regional Supervisor.


Easement means an authorization for a nonpossessory, nonexclusive interest in a portion of the OCS, whether leased or unleased, which specifies the rights of the holder to use the area embraced in the easement in a manner consistent with the terms and conditions of the granting authority.


Eastern Gulf of Mexico means all OCS areas of the Gulf of Mexico the BOEM Director decides are adjacent to the State of Florida. The Eastern Gulf of Mexico is not the same as the Eastern Planning Area, an area established for OCS lease sales.


Emission offsets mean emission reductions obtained from facilities, either onshore or offshore, other than the facility or facilities covered by the proposed Exploration Plan (EP) or Development and Production Plan (DPP).


Enhanced recovery operations mean pressure maintenance operations, secondary and tertiary recovery, cycling, and similar recovery operations that alter the natural forces in a reservoir to increase the ultimate recovery of oil or gas.


Existing facility, as used in 30 CFR 550.303, means an OCS facility described in an Exploration Plan or a Development and Production Plan approved before June 2, 1980.


Exploration means the commercial search for oil, gas, or sulphur. Activities classified as exploration include but are not limited to:


(1) Geophysical and geological (G&G) surveys using magnetic, gravity, seismic reflection, seismic refraction, gas sniffers, coring, or other systems to detect or imply the presence of oil, gas, or sulphur; and


(2) Any drilling conducted for the purpose of searching for commercial quantities of oil, gas, and sulphur, including the drilling of any additional well needed to delineate any reservoir to enable the lessee to decide whether to proceed with development and production.


Facility means:


(1) As used in § 250.130, all installations permanently or temporarily attached to the seabed on the OCS (including manmade islands and bottom-sitting structures). They include mobile offshore drilling units (MODUs) or other vessels engaged in drilling or downhole operations, used for oil, gas or sulphur drilling, production, or related activities. They include all floating production systems (FPSs), variously described as column-stabilized-units (CSUs); floating production, storage and offloading facilities (FPSOs); tension-leg platforms (TLPs); spars, etc. They also include facilities for product measurement and royalty determination (e.g., lease Automatic Custody Transfer Units, gas meters) of OCS production on installations not on the OCS. Any group of OCS installations interconnected with walkways, or any group of installations that includes a central or primary installation with processing equipment and one or more satellite or secondary installations is a single facility. The Regional Supervisor may decide that the complexity of the individual installations justifies their classification as separate facilities.


(2) As used in 30 CFR 550.303, means all installations or devices permanently or temporarily attached to the seabed. They include mobile offshore drilling units (MODUs), even while operating in the “tender assist” mode (i.e., with skid-off drilling units) or other vessels engaged in drilling or downhole operations. They are used for exploration, development, and production activities for oil, gas, or sulphur and emit or have the potential to emit any air pollutant from one or more sources. They include all floating production systems (FPSs), including column-stabilized-units (CSUs); floating production, storage and offloading facilities (FPSOs); tension-leg platforms (TLPs); spars, etc. During production, multiple installations or devices are a single facility if the installations or devices are at a single site. Any vessel used to transfer production from an offshore facility is part of the facility while it is physically attached to the facility.


(3) As used in § 250.490(b), means a vessel, a structure, or an artificial island used for drilling, well completion, well-workover, or production operations.


(4) As used in §§ 250.900 through 250.921, means all installations or devices permanently or temporarily attached to the seabed. They are used for exploration, development, and production activities for oil, gas, or sulphur and emit or have the potential to emit any air pollutant from one or more sources. They include all floating production systems (FPSs), including column-stabilized-units (CSUs); floating production, storage and offloading facilities (FPSOs); tension-leg platforms (TLPs); spars, etc. During production, multiple installations or devices are a single facility if the installations or devices are at a single site. Any vessel used to transfer production from an offshore facility is part of the facility while it is physically attached to the facility.


(5) As used in subpart S of this part, all types of structures permanently or temporarily attached to the seabed (e.g., mobile offshore drilling units (MODUs); floating production systems; floating production, storage and offloading facilities; tension-leg platforms; and spars) that are used for exploration, development, and production activities for oil, gas, or sulphur in the OCS. Facilities also include DOI-regulated pipelines.


Flaring means the burning of natural gas as it is released into the atmosphere.


Gas reservoir means a reservoir that contains hydrocarbons predominantly in a gaseous (single-phase) state.


Gas-well completion means a well completed in a gas reservoir or in the associated gas-cap of an oil reservoir.


Geological and geophysical (G&G) explorations mean those G&G surveys on your lease or unit that use seismic reflection, seismic refraction, magnetic, gravity, gas sniffers, coring, or other systems to detect or imply the presence of oil, gas, or sulphur in commercial quantities.


Governor means the Governor of a State, or the person or entity designated by, or under, State law to exercise the powers granted to such Governor under the Act.


H2S absent means:


(1) Drilling, logging, coring, testing, or producing operations have confirmed the absence of H2S in concentrations that could potentially result in atmospheric concentrations of 20 ppm or more of H2S; or


(2) Drilling in the surrounding areas and correlation of geological and seismic data with equivalent stratigraphic units have confirmed an absence of H2S throughout the area to be drilled.


H2S present means drilling, logging, coring, testing, or producing operations have confirmed the presence of H2S in concentrations and volumes that could potentially result in atmospheric concentrations of 20 ppm or more of H2S.


H2S unknown means the designation of a zone or geologic formation where neither the presence nor absence of H2S has been confirmed.


Human environment means the physical, social, and economic components, conditions, and factors that interactively determine the state, condition, and quality of living conditions, employment, and health of those affected, directly or indirectly, by activities occurring on the OCS.


Interpreted geological information means geological knowledge, often in the form of schematic cross sections, 3-dimensional representations, and maps, developed by determining the geological significance of data and analyzed geological information.


Interpreted geophysical information means geophysical knowledge, often in the form of schematic cross sections, 3-dimensional representations, and maps, developed by determining the geological significance of geophysical data and analyzed geophysical information.


Lease means an agreement that is issued under section 8 or maintained under section 6 of the Act and that authorizes exploration for, and development and production of, minerals. The term also means the area covered by that authorization, whichever the context requires.


Lease term pipelines mean those pipelines owned and operated by a lessee or operator that are completely contained within the boundaries of a single lease, unit, or contiguous (not cornering) leases of that lessee or operator.


Lessee means a person who has entered into a lease with the United States to explore for, develop, and produce the leased minerals. The term lessee also includes the BOEM-approved assignee of the lease, and the owner or the BOEM-approved assignee of operating rights for the lease.


Major Federal action means any action or proposal by the Secretary that is subject to the provisions of section 102(2)(C) of the National Environmental Policy Act of 1969, 42 U.S.C. (2)(C) (i.e., an action that will have a significant impact on the quality of the human environment requiring preparation of an environmental impact statement under section 102(2)(C) of the National Environmental Policy Act).


Marine environment means the physical, atmospheric, and biological components, conditions, and factors that interactively determine the productivity, state, condition, and quality of the marine ecosystem. These include the waters of the high seas, the contiguous zone, transitional and intertidal areas, salt marshes, and wetlands within the coastal zone and on the OCS.


Material remains mean physical evidence of human habitation, occupation, use, or activity, including the site, location, or context in which such evidence is situated.


Maximum efficient rate (MER) means the maximum sustainable daily oil or gas withdrawal rate from a reservoir that will permit economic development and depletion of that reservoir without detriment to ultimate recovery.


Maximum production rate (MPR) means the approved maximum daily rate at which oil or gas may be produced from a specified oil-well or gas-well completion.


Minerals include oil, gas, sulphur, geopressured-geothermal and associated resources, and all other minerals that are authorized by an Act of Congress to be produced.


Natural resources include, without limiting the generality thereof, oil, gas, and all other minerals, and fish, shrimp, oysters, clams, crabs, lobsters, sponges, kelp, and other marine animal and plant life but does not include water power or the use of water for the production of power.


Nonattainment area means, for any air pollutant, an area that is shown by monitored data or that is calculated by air quality modeling (or other methods determined by the Administrator of EPA to be reliable) to exceed any primary or secondary ambient air quality standard established by EPA.


Nonsensitive reservoir means a reservoir in which ultimate recovery is not decreased by high reservoir production rates.


Oil reservoir means a reservoir that contains hydrocarbons predominantly in a liquid (single-phase) state.


Oil reservoir with an associated gas cap means a reservoir that contains hydrocarbons in both a liquid and gaseous (two-phase) state.


Oil-well completion means a well completed in an oil reservoir or in the oil accumulation of an oil reservoir with an associated gas cap.


Operating rights mean any interest held in a lease with the right to explore for, develop, and produce leased substances.


Operator means the person the lessee(s) designates as having control or management of operations on the leased area or a portion thereof. An operator may be a lessee, the BSEE-approved or BOEM-approved designated agent of the lessee(s), or the holder of operating rights under a BOEM-approved operating rights assignment.


Outer Continental Shelf (OCS) means all submerged lands lying seaward and outside of the area of lands beneath navigable waters as defined in section 2 of the Submerged Lands Act (43 U.S.C. 1301) whose subsoil and seabed appertain to the United States and are subject to its jurisdiction and control.


Person includes a natural person, an association (including partnerships, joint ventures, and trusts), a State, a political subdivision of a State, or a private, public, or municipal corporation.


Pipelines are the piping, risers, and appurtenances installed for transporting oil, gas, sulphur, and produced waters.


Processed geological or geophysical information means data collected under a permit or a lease that have been processed or reprocessed. Processing involves changing the form of data to facilitate interpretation. Processing operations may include, but are not limited to, applying corrections for known perturbing causes, rearranging or filtering data, and combining or transforming data elements. Reprocessing is the additional processing other than ordinary processing used in the general course of evaluation. Reprocessing operations may include varying identified parameters for the detailed study of a specific problem area.


Production means those activities that take place after the successful completion of any means for the removal of minerals, including such removal, field operations, transfer of minerals to shore, operation monitoring, maintenance, and workover operations.


Production areas are those areas where flammable petroleum gas, volatile liquids or sulphur are produced, processed (e.g., compressed), stored, transferred (e.g., pumped), or otherwise handled before entering the transportation process.


Projected emissions mean emissions, either controlled or uncontrolled, from a source or sources.


Prospect means a geologic feature having the potential for mineral deposits.


Regional Director means the BSEE officer with responsibility and authority for a Region within BSEE.


Regional Supervisor means the BSEE officer with responsibility and authority for operations or other designated program functions within a BSEE Region.


Right-of-use means any authorization issued under 30 CFR Part 550 to use OCS lands.


Right-of-way pipelines are those pipelines that are contained within:


(1) The boundaries of a single lease or unit, but are not owned and operated by a lessee or operator of that lease or unit;


(2) The boundaries of contiguous (not cornering) leases that do not have a common lessee or operator;


(3) The boundaries of contiguous (not cornering) leases that have a common lessee or operator but are not owned and operated by that common lessee or operator; or


(4) An unleased block(s).


Routine operations, for the purposes of subpart F, mean any of the following operations conducted on a well with the tree installed:


(1) Cutting paraffin;


(2) Removing and setting pump-through-type tubing plugs, gas-lift valves, and subsurface safety valves that can be removed by wireline operations;


(3) Bailing sand;


(4) Pressure surveys;


(5) Swabbing;


(6) Scale or corrosion treatment;


(7) Caliper and gauge surveys;


(8) Corrosion inhibitor treatment;


(9) Removing or replacing subsurface pumps;


(10) Through-tubing logging (diagnostics);


(11) Wireline fishing;


(12) Setting and retrieving other subsurface flow-control devices; and


(13) Acid treatments.


Sensitive reservoir means a reservoir in which the production rate will affect ultimate recovery.


Significant archaeological resource means those archaeological resources that meet the criteria of significance for eligibility to the National Register of Historic Places as defined in 36 CFR 60.4, or its successor.


Source control and containment equipment (SCCE) means the capping stack, cap and flow system, containment dome, and/or other subsea and surface devices, equipment, and vessels the collective purpose of which is to control a spill source and stop the flow of fluids into the environment or to contain fluids escaping into the environment. “Surface devices” refers to equipment mounted or staged on a barge, vessel, or facility to separate, treat, store and/or dispose of fluids conveyed to the surface by the cap and flow system or the containment dome. “Subsea devices” includes, but is not limited to, remotely operated vehicles, anchors, buoyancy equipment, connectors, cameras, controls and other subsea equipment necessary to facilitate the deployment, operation, and retrieval of the SCCE. The SCCE does not include a blowout preventer.


Suspension means a granted or directed deferral of the requirement to produce (Suspension of Production (SOP)) or to conduct leaseholding operations (Suspension of Operations (SOO)).


Venting means the release of gas into the atmosphere without igniting it. This includes gas that is released underwater and bubbles to the atmosphere.


Waste of oil, gas, or sulphur means:


(1) The physical waste of oil, gas, or sulphur;


(2) The inefficient, excessive, or improper use, or the unnecessary dissipation of reservoir energy;


(3) The locating, spacing, drilling, equipping, operating, or producing of any oil, gas, or sulphur well(s) in a manner that causes or tends to cause a reduction in the quantity of oil, gas, or sulphur ultimately recoverable under prudent and proper operations or that causes or tends to cause unnecessary or excessive surface loss or destruction of oil or gas; or


(4) The inefficient storage of oil.


Welding means all activities connected with welding, including hot tapping and burning.


Wellbay is the area on a facility within the perimeter of the outermost wellheads.


Well-completion operations mean the work conducted to establish production from a well after the production-casing string has been set, cemented, and pressure-tested.


Well-control fluid means drilling mud, completion fluid, or workover fluid as appropriate to the particular operation being conducted.


Western Gulf of Mexico means all OCS areas of the Gulf of Mexico except those the BOEM Director decides are adjacent to the State of Florida. The Western Gulf of Mexico is not the same as the Western Planning Area, an area established for OCS lease sales.


Workover operations mean the work conducted on wells after the initial well-completion operation for the purpose of maintaining or restoring the productivity of a well.


You means a lessee, the owner or holder of operating rights, a designated operator or agent of the lessee(s), a pipeline right-of-way holder, or a State lessee granted a right-of-use and easement.


[76 FR 64462, Oct. 18, 2011, as amended at 78 FR 20439, Apr. 5, 2013; 81 FR 46560, July 15, 2016]


Performance Standards

§ 250.106 What standards will the Director use to regulate lease operations?

The Director will regulate all operations under a lease, right-of-use and easement, or right-of-way to:


(a) Promote orderly exploration, development, and production of mineral resources;


(b) Prevent injury or loss of life;


(c) Prevent damage to or waste of any natural resource, property, or the environment; and


(d) Cooperate and consult with affected States, local governments, other interested parties, and relevant Federal agencies.


§ 250.107 What must I do to protect health, safety, property, and the environment?

(a) You must protect health, safety, property, and the environment by:


(1) Performing all operations in a safe and workmanlike manner;


(2) Maintaining all equipment and work areas in a safe condition;


(3) Utilizing recognized engineering practices that reduce risks to the lowest level practicable when conducting design, fabrication, installation, operation, inspection, repair, and maintenance activities; and


(4) Complying with all lease, plan, and permit terms and conditions.


(b) You must immediately control, remove, or otherwise correct any hazardous oil and gas accumulation or other health, safety, or fire hazard.


(c) Best available and safest technology. (1) On all new drilling and production operations and, except as provided in paragraph (c)(3) of this section, on existing operations, you must use the best available and safest technologies (BAST) which the Director determines to be economically feasible whenever the Director determines that failure of equipment would have a significant effect on safety, health, or the environment, except where the Director determines that the incremental benefits are clearly insufficient to justify the incremental costs of utilizing such technologies.


(2) Conformance with BSEE regulations will be presumed to constitute the use of BAST unless and until the Director determines that other technologies are required pursuant to paragraph (c)(1) of this section.


(3) The Director may waive the requirement to use BAST on a category of existing operations if the Director determines that use of BAST by that category of existing operations would not be practicable. The Director may waive the requirement to use BAST on an existing operation at a specific facility if you submit a waiver request demonstrating that the use of BAST would not be practicable.


(d) BSEE may issue orders to ensure compliance with this part, including, but not limited to, orders to produce and submit records and to inspect, repair, and/or replace equipment. BSEE may also issue orders to shut-in operations of a component or facility because of a threat of serious, irreparable, or immediate harm to health, safety, property, or the environment posed by those operations or because the operations violate law, including a regulation, order, or provision of a lease, plan, or permit.


[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 26014, Apr. 29, 2016; 81 FR 61915, Sept. 7, 2016]


§ 250.108 What requirements must I follow for cranes and other material-handling equipment?

(a) All cranes installed on fixed platforms must be operated in accordance with American Petroleum Institute’s Recommended Practice for Operation and Maintenance of Offshore Cranes, API RP 2D (as incorporated by reference in § 250.198).


(b) All cranes installed on fixed platforms must be equipped with a functional anti-two block device.


(c) If a fixed platform is installed after March 17, 2003, all cranes on the platform must meet the requirements of American Petroleum Institute Specification for Offshore Pedestal Mounted Cranes, API Spec 2C (as incorporated by reference in § 250.198).


(d) All cranes manufactured after March 17, 2003, and installed on a fixed platform, must meet the requirements of API Spec 2C.


(e) You must maintain records specific to a crane or the operation of a crane installed on an OCS fixed platform, as follows:


(1) Retain all design and construction records, including installation records for any anti-two block safety devices, for the life of the crane. The records must be kept at the OCS fixed platform.


(2) Retain all inspection, testing, and maintenance records of cranes for at least 4 years. The records must be kept at the OCS fixed platform.


(3) Retain the qualification records of the crane operator and all rigger personnel for at least 4 years. The records must be kept at the OCS fixed platform.


(f) You must operate and maintain all other material-handling equipment in a manner that ensures safe operations and prevents pollution.


§ 250.109 What documents must I prepare and maintain related to welding?

(a) You must submit a Welding Plan to the District Manager before you begin drilling or production activities on a lease. You may not begin welding until the District Manager has approved your plan.


(b) You must keep the following at the site where welding occurs:


(1) A copy of the plan and its approval letter; and


(2) Drawings showing the designated safe-welding areas.


§ 250.110 What must I include in my welding plan?

You must include all of the following in the welding plan that you prepare under § 250.109:


(a) Standards or requirements for welders;


(b) How you will ensure that only qualified personnel weld;


(c) Practices and procedures for safe welding that address:


(1) Welding in designated safe areas;


(2) Welding in undesignated areas, including wellbay;


(3) Fire watches;


(4) Maintenance of welding equipment; and


(5) Plans showing all designated safe-welding areas.


(d) How you will prevent spark-producing activities (i.e., grinding, abrasive blasting/cutting and arc-welding) in hazardous locations.


§ 250.111 Who oversees operations under my welding plan?

A welding supervisor or a designated person in charge must be thoroughly familiar with your welding plan. This person must ensure that each welder is properly qualified according to the welding plan. This person also must inspect all welding equipment before welding.


§ 250.112 What standards must my welding equipment meet?

Your welding equipment must meet the following requirements:


(a) All engine-driven welding equipment must be equipped with spark arrestors and drip pans;


(b) Welding leads must be completely insulated and in good condition;


(c) Hoses must be leak-free and equipped with proper fittings, gauges, and regulators; and


(d) Oxygen and fuel gas bottles must be secured in a safe place.


§ 250.113 What procedures must I follow when welding?

(a) Before you weld, you must move any equipment containing hydrocarbons or other flammable substances at least 35 feet horizontally from the welding area. You must move similar equipment on lower decks at least 35 feet from the point of impact where slag, sparks, or other burning materials could fall. If moving this equipment is impractical, you must protect that equipment with flame-proofed covers, shield it with metal or fire-resistant guards or curtains, or render the flammable substances inert.


(b) While you weld, you must monitor all water-discharge-point sources from hydrocarbon-handling vessels. If a discharge of flammable fluids occurs, you must stop welding.


(c) If you cannot weld in one of the designated safe-welding areas that you listed in your safe welding plan, you must meet the following requirements:


(1) You may not begin welding until:


(i) The welding supervisor or designated person in charge advises in writing that it is safe to weld.


(ii) You and the designated person in charge inspect the work area and areas below it for potential fire and explosion hazards.


(2) During welding, the person in charge must designate one or more persons as a fire watch. The fire watch must:


(i) Have no other duties while actual welding is in progress;


(ii) Have usable firefighting equipment;


(iii) Remain on duty for 30 minutes after welding activities end; and


(iv) Maintain a continuous surveillance with a portable gas detector during the welding and burning operation if welding occurs in an area not equipped with a gas detector.


(3) You may not weld piping, containers, tanks, or other vessels that have contained a flammable substance unless you have rendered the contents inert and the designated person in charge has determined it is safe to weld. This does not apply to approved hot taps.


(4) You may not weld within 10 feet of a wellbay unless you have shut in all producing wells in that wellbay.


(5) You may not weld within 10 feet of a production area, unless you have shut in that production area.


(6) You may not weld while you drill, complete, workover, or conduct wireline operations unless:


(i) The fluids in the well (being drilled, completed, worked over, or having wireline operations conducted) are noncombustible; and


(ii) You have precluded the entry of formation hydrocarbons into the wellbore by either mechanical means or a positive overbalance toward the formation.


§ 250.114 How must I install, maintain, and operate electrical equipment?

The requirements in this section apply to all electrical equipment on all platforms, artificial islands, fixed structures, and their facilities.


(a) You must classify all areas according to API RP 500, Recommended Practice for Classification of Locations for Electrical Installations at Petroleum Facilities Classified as Class I, Division 1 and Division 2 (as incorporated by reference in § 250.198), or API RP 505, Recommended Practice for Classification of Locations for Electrical Installations at Petroleum Facilities Classified as Class I, Zone 0, Zone 1, and Zone 2 (as incorporated by reference in § 250.198).


(b) Employees who maintain your electrical systems must have expertise in area classification and the performance, operation and hazards of electrical equipment.


(c) You must install all electrical systems according to API RP 14F, Recommended Practice for Design and Installation of Electrical Systems for Fixed and Floating Offshore Petroleum Facilities for Unclassified and Class I, Division 1, and Division 2 Locations (as incorporated by reference in § 250.198), or API RP 14FZ, Recommended Practice for Design and Installation of Electrical Systems for Fixed and Floating Offshore Petroleum Facilities for Unclassified and Class I, Zone 0, Zone 1, and Zone 2 Locations (as incorporated by reference in § 250.198).


(d) On each engine that has an electric ignition system, you must use an ignition system designed and maintained to reduce the release of electrical energy.


[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 36149, June 6, 2016]


§ 250.115 What are the procedures for, and effects of, incorporation of documents by reference in this part?

For the documents incorporated by reference in this part:


(a) Incorporation by reference of a document is limited to the edition of the document, or the specific edition and supplement or addendum, that is cited in § 250.198. Future amendments or revisions of the incorporated document are not included. BSEE will publish any changes to the incorporation of the document in the Federal Register and amend § 250.198 as appropriate.


(b) BSEE may make a rule amending the incorporation of a document effective without prior opportunity for public comment when BSEE determines:


(1) That the revisions to the document result in safety improvements or represent new industry standard technology and do not impose undue costs on the affected parties; and


(2) BSEE meets the requirements for making a rule immediately effective under 5 U.S.C. 553.


(c) The effect of incorporation by reference of a document into the regulations in this part is that the incorporated document is a requirement. When a section in this part refers to an incorporated document, you are responsible for complying with the provisions of that entire document, except to the extent that the section that refers to the document provides otherwise. When a section in this part refers to a part of an incorporated document, you are responsible for complying with that part of the document as provided in that section.


(d) Under §§ 250.141 and 250.142, you may comply with a later edition of a specific document incorporated by reference, provided:


(1) You show that complying with the later edition provides a degree of protection, safety, or performance equal to or better than would be achieved by compliance with the listed edition; and


(2) You obtain prior written approval for alternative compliance from the authorized BSEE official.


[84 FR 21968, May 15, 2019]


§§ 250.116-250.117 [Reserved]

Gas Storage or Injection

§ 250.118 Will BSEE approve gas injection?

The Regional Supervisor may authorize you to inject gas on the OCS, on and off-lease, to promote conservation of natural resources and to prevent waste.


(a) To receive BSEE approval for injection, you must:


(1) Show that the injection will not result in undue interference with operations under existing leases; and


(2) Submit a written application to the Regional Supervisor for injection of gas.


(b) The Regional Supervisor will approve gas injection applications that:


(1) Enhance recovery;


(2) Prevent flaring of casinghead gas; or


(3) Implement other conservation measures approved by the Regional Supervisor.


§ 250.119 [Reserved]

§ 250.120 How does injecting, storing, or treating gas affect my royalty payments?

(a) If you produce gas from an OCS lease and inject it into a reservoir on the lease or unit for the purposes cited in § 250.118(b), you are not required to pay royalties until you remove or sell the gas from the reservoir.


(b) If you produce gas from an OCS lease and store it according to 30 CFR 550.119, you must pay royalty before injecting it into the storage reservoir.


(c) If you produce gas from an OCS lease and treat it at an off-lease or off-unit location, you must pay royalties when the gas is first produced.


§ 250.121 What happens when the reservoir contains both original gas in place and injected gas?

If the reservoir contains both original gas in place and injected gas, when you produce gas from the reservoir you must use a BSEE-approved formula to determine the amounts of injected or stored gas and gas original to the reservoir.


§ 250.122 What effect does subsurface storage have on the lease term?

If you use a lease area for subsurface storage of gas, it does not affect the continuance or expiration of the lease.


§ 250.123 [Reserved]

§ 250.124 Will BSEE approve gas injection into the cap rock containing a sulphur deposit?

To receive the Regional Supervisor’s approval to inject gas into the cap rock of a salt dome containing a sulphur deposit, you must show that the injection:


(a) Is necessary to recover oil and gas contained in the cap rock; and


(b) Will not significantly increase potential hazards to present or future sulphur mining operations.


Fees

§ 250.125 Service fees.

(a) The table in this paragraph (a) shows the fees that you must pay to BSEE for the services listed. The fees will be adjusted periodically according to the Implicit Price Deflator for Gross Domestic Product by publication of a document in the Federal Register. If a significant adjustment is needed to arrive at the new actual cost for any reason other than inflation, then a proposed rule containing the new fees will be published in the Federal Register for comment.


Service – processing of the following:
Fee amount
30 CFR citation
(1) Suspension of Operations/Suspension of Production (SOO/SOP) Request$2,469§ 250.171(e).
(2) Deepwater Operations Plan (DWOP)$4,186§ 250.292(q).
(3) Application for Permit to Drill (APD; Form BSEE-0123)$2,458 for initial applications only; no fee for revisions§ 250.410(d); § 250.513(b); § 250.1617(a).
(4) Application for Permit to Modify (APM; Form BSEE-0124)$145§ 250.465(b); § 250.513(b); § 250.613(b); § 250.1618(a); § 250.1704(g).
(5) New Facility Production Safety System Application for facility with more than 125 components$6,312

A $16,610 additional fee will be charged if BSEE conducts a pre-production inspection of a facility offshore, and $8,638 for an inspection of a facility while in a shipyard

A component is a piece of equipment or ancillary system that is protected by one or more of the safety devices required by API RP 14C (as incorporated by reference in § 250.198)

§ 250.842.
(6) New Facility Production Safety System Application for facility with 25-125 components$1,528

A $10,430 additional fee will be charged if BSEE conducts a pre-production inspection of a facility offshore, and $5,980 for an inspection of a facility while in a shipyard

§ 250.842.
(7) New Facility Production Safety System Application for facility with fewer than 25 components$758§ 250.842.
(8) Production Safety System Application – Modification with more than 125 components reviewed$704§ 250.842.
(9) Production Safety System Application – Modification with 25-125 components reviewed$252§ 250.842.
(10) Production Safety System Application – Modification with fewer than 25 components reviewed$107§ 250.842.
(11) Platform Application – Installation – Under the Platform Verification Program$26,444§ 250.905(l).
(12) Platform Application – Installation – Fixed Structure Under the Platform Approval Program$3,787§ 250.905(l).
(13) Platform Application – Installation – Caisson/Well Protector$1,927§ 250.905(l).
(14) Platform Application – Modification/Repair$4,518§ 250.905(l).
(15) New Pipeline Application (Lease Term)$4,119§ 250.1000(b).
(16) Pipeline Application – Modification (Lease Term)$2,392§ 250.1000(b).
(17) Pipeline Application – Modification (ROW)$4,849§ 250.1000(b).
(18) Pipeline Repair Notification$451§ 250.1008(e).
(19) Pipeline Right-of-Way (ROW) Grant Application$3,223§ 250.1015(a).
(20) Pipeline Conversion of Lease Term to ROW$275§ 250.1015(a).
(21) Pipeline ROW Assignment$234§ 250.1018(b).
(22) 500 Feet from Lease/Unit Line Production Request$4,527§ 250.1156(a).
(23) Gas Cap Production Request$5,761§ 250.1157(b).
(24) Downhole Commingling Request$6,722§ 250.1158(a).
(25) Complex Surface Commingling and Measurement Application$4,718§ 250.1202(a); § 250.1203(b); § 250.1204(a).
(26) Simple Surface Commingling and Measurement Application$1,595§ 250.1202(a); § 250.1203(b); § 250.1204(a).
(27) Voluntary Unitization Proposal or Unit Expansion$14,678§ 250.1303(d).
(28) Unitization Revision$1,042§ 250.1303(d).
(29) Application to Remove a Platform or Other Facility$5,448§ 250.1727.
(30) Application to Decommission a Pipeline (Lease Term)$1,328§ 250.1751(a) or § 250.1752(a).
(31) Application to Decommission a Pipeline (ROW)$2,524§ 250.1751(a) or § 250.1752(a).

(b) Payment of the fees listed in paragraph (a) of this section must accompany the submission of the document for approval or be sent to an office identified by the Regional Director. Once a fee is paid, it is nonrefundable, even if an application or other request is withdrawn. If your application is returned to you as incomplete, you are not required to submit a new fee when you submit the amended application.


(c) Verbal approvals are occasionally given in special circumstances. Any action that will be considered a verbal permit approval requires either a paper permit application to follow the verbal approval or an electronic application submittal within 72 hours. Payment must be made with the completed paper or electronic application.


[76 FR 64462, Oct. 18, 2011, as amended at 77 FR 50891, Aug. 22, 2012; 78 FR 60213, Oct. 1, 2013; 81 FR 26014, Apr. 29, 2016; 81 FR 61916, Sept. 7, 2016; 87 FR 19803, Apr. 6, 2022]


§ 250.126 Electronic payment instructions.

(a) You must file all payments electronically through the Fees for Services Page on the BSEE website at https://www.bsee.gov/who-we-are/working-with-us/Fees-for-Services. This includes, but is not limited to, all OCS applications, permits, or any filing fees. You must include a copy of the Pay.gov confirmation receipt page with your application, permit, or filing fee.


(b) If you submitted an application or permit through eWell, you must use the interactive payment feature in that system, which directs you through Pay.gov to make a payment. It is recommended that you keep a copy of your payment confirmation receipt in the event that any questions arise regarding your transaction.


[81 FR 36149, June 6, 2016; as amended at 87 FR 19803, Apr. 6, 2022]


Inspections of Operations

§ 250.130 Why does BSEE conduct inspections?

BSEE will inspect OCS facilities and any vessels engaged in drilling or other downhole operations. These include facilities under jurisdiction of other Federal agencies that we inspect by agreement. We conduct these inspections:


(a) To verify that you are conducting operations according to the Act, the regulations, the lease, right-of-way, the BOEM-approved Exploration Plan or Development and Production Plans; or right-of-use and easement, and other applicable laws and regulations; and


(b) To determine whether equipment designed to prevent or ameliorate blowouts, fires, spillages, or other major accidents has been installed and is operating properly according to the requirements of this part.


§ 250.131 Will BSEE notify me before conducting an inspection?

BSEE conducts both scheduled and unscheduled inspections.


§ 250.132 What must I do when BSEE conducts an inspection?

(a) When BSEE conducts an inspection, you must provide:


(1) Access to all platforms, artificial islands, and other installations on your leases or associated with your lease, right-of-use and easement, or right-of-way; and


(2) Helicopter landing sites and refueling facilities for any helicopters we use to regulate offshore operations.


(b) You must make the following available for us to inspect:


(1) The area covered under a lease, right-of-use and easement, right-of-way, or permit;


(2) All improvements, structures, and fixtures on these areas; and


(3) All records of design, construction, operation, maintenance, repairs, or investigations on or related to the area.


§ 250.133 Will BSEE reimburse me for my expenses related to inspections?

Upon request, BSEE will reimburse you for food, quarters, and transportation that you provide for BSEE representatives while they inspect lease facilities and operations. You must send us your reimbursement request within 90 days of the inspection.


Disqualification

§ 250.135 What will BSEE do if my operating performance is unacceptable?

BSEE will determine if your operating performance is unacceptable. BSEE will refer a determination of unacceptable performance to BOEM, who may disapprove or revoke your designation as operator on a single facility or multiple facilities. We will give you adequate notice and opportunity for a review by BSEE officials before making a determination that your operating performance is unacceptable.


§ 250.136 How will BSEE determine if my operating performance is unacceptable?

In determining if your operating performance is unacceptable, BSEE will consider, individually or collectively:


(a) Accidents and their nature;


(b) Pollution events, environmental damages and their nature;


(c) Incidents of noncompliance;


(d) Civil penalties;


(e) Failure to adhere to OCS lease obligations; or


(f) Any other relevant factors.


Special Types of Approvals

§ 250.140 When will I receive an oral approval?

When you apply for BSEE approval of any activity, we normally give you a written decision. The following table shows circumstances under which we may give an oral approval.


When you . . .
We may . . .
And . . .
(a) Request approval orallyGive you an oral approval,You must then confirm the oral request by sending us a written request within 72 hours.
(b) Request approval in writing,Give you an oral approval if quick action is needed,We will send you a written approval afterward. It will include any conditions that we place on the oral approval.
(c) Request approval orally for gas flaring,Give you an oral approval,You don’t have to follow up with a written request unless the Regional Supervisor requires it. When you stop the approved flaring, you must promptly send a letter summarizing the location, dates and hours, and volumes of liquid hydrocarbons produced and gas flared by the approved flaring (see 30 CFR 250, subpart K).

§ 250.141 May I ever use alternate procedures or equipment?

You may use alternate procedures or equipment after receiving approval as described in this section.


(a) Any alternate procedures or equipment that you propose to use must provide a level of safety and environmental protection that equals or surpasses current BSEE requirements.


(b) You must receive the District Manager’s or Regional Supervisor’s written approval before you can use alternate procedures or equipment.


(c) To receive approval, you must either submit information or give an oral presentation to the appropriate Regional Supervisor. Your presentation must describe the site-specific application(s), performance characteristics, and safety features of the proposed procedure or equipment.


§ 250.142 How do I receive approval for departures?

We may approve departures to the operating requirements. You may apply for a departure by writing to the District Manager or Regional Supervisor.


§§ 250.143-250.144 [Reserved]

§ 250.145 How do I designate an agent or a local agent?

(a) You or your designated operator may designate for the Regional Supervisor’s approval, or the Regional Director may require you to designate an agent empowered to fulfill your obligations under the Act, the lease, or the regulations in this part.


(b) You or your designated operator may designate for the Regional Supervisor’s approval a local agent empowered to receive notices and submit requests, applications, notices, or supplemental information.


§ 250.146 Who is responsible for fulfilling leasehold obligations?

(a) When you are not the sole lessee, you and your co-lessee(s) are jointly and severally responsible for fulfilling your obligations under the provisions of 30 CFR parts 250 through 282 and 30 CFR parts 550 through 582 unless otherwise provided in these regulations.


(b) If your designated operator fails to fulfill any of your obligations under 30 CFR parts 250 through 282 and 30 CFR parts 550 through 582, the Regional Supervisor may require you or any or all of your co-lessees to fulfill those obligations or other operational obligations under the Act, the lease, or the regulations.


(c) Whenever the regulations in 30 CFR parts 250 through 282 and 30 CFR parts 550 through 582 require the lessee to meet a requirement or perform an action, the lessee, operator (if one has been designated), and the person actually performing the activity to which the requirement applies are jointly and severally responsible for complying with the regulation.


Naming and Identifying Facilities and Wells (Does Not Include MODUs)

§ 250.150 How do I name facilities and wells in the Gulf of Mexico Region?

(a) Assign each facility a letter designation except for those types of facilities identified in paragraph (c)(1) of this section. For example, A, B, CA, or CB.


(1) After a facility is installed, rename each predrilled well that was assigned only a number and was suspended temporarily at the mudline or at the surface. Use a letter and number designation. The letter used must be the same as that of the production facility, and the number used must correspond to the order in which the well was completed, not necessarily the number assigned when it was drilled. For example, the first well completed for production on Facility A would be renamed Well A-1, the second would be Well A-2, and so on; and


(2) When you have more than one facility on a block, each facility installed, and not bridge-connected to another facility, must be named using a different letter in sequential order. For example, EC 222A, EC 222B, EC 222C.


(3) When you have more than one facility on multiple blocks in a local area being co-developed, each facility installed and not connected with a walkway to another facility should be named using a different letter in sequential order with the block number corresponding to the block on which the platform is located. For example, EC 221A, EC 222B, and EC 223C.


(b) In naming multiple well caissons, you must assign a letter designation.


(c) In naming single well caissons, you must use certain criteria as follows:


(1) For single well caissons not attached to a facility with a walkway, use the well designation. For example, Well No. 1;


(2) For single well caissons attached to a facility with a walkway, use the same designation as the facility. For example, rename Well No.10 as A-10; and


(3) For single well caissons with production equipment, use a letter designation for the facility name and a letter plus number designation for the well. For example, the Well No. 1 caisson would be designated as Facility A, and the well would be Well A-1.


§ 250.151 How do I name facilities in the Pacific Region?

The operator assigns a name to the facility.


§ 250.152 How do I name facilities in the Alaska Region?

Facilities will be named and identified according to the Regional Director’s directions.


§ 250.153 Do I have to rename an existing facility or well?

You do not have to rename facilities installed and wells drilled before January 27, 2000, unless the Regional Director requires it.


§ 250.154 What identification signs must I display?

(a) You must identify all facilities, artificial islands, and mobile offshore drilling units with a sign maintained in a legible condition.


(1) You must display an identification sign that can be viewed from the waterline on at least one side of the platform. The sign must use at least 3-inch letters and figures.


(2) When helicopter landing facilities are present, you must display an additional identification sign that is visible from the air. The sign must use at least 12-inch letters and figures and must also display the weight capacity of the helipad unless noted on the top of the helipad. If this sign is visible to both helicopter and boat traffic, then the sign in paragraph (a)(1) of this section is not required.


(3) Your identification sign must:


(i) List the name of the lessee or designated operator;


(ii) In the GOM OCS Region, list the area designation or abbreviation and the block number of the facility location as depicted on OCS Official Protraction Diagrams or leasing maps;


(iii) In the Pacific OCS Region, list the lease number on which the facility is located; and


(iv) List the name of the platform, structure, artificial island, or mobile offshore drilling unit.


(b) You must identify singly completed wells and multiple completions as follows:


(1) For each singly completed well, list the lease number and well number on the wellhead or on a sign affixed to the wellhead;


(2) For wells with multiple completions, downhole splitter wells, and multilateral wells, identify each completion in addition to the well name and lease number individually on the well flowline at the wellhead; and


(3) For subsea wells that flow individually into separate pipelines, affix the required sign on the pipeline or surface flowline dedicated to that subsea well at a convenient location on the receiving platform. For multiple subsea wells that flow into a common pipeline or pipelines, no sign is required.


§§ 250.160-250.167 [Reserved]

Suspensions

§ 250.168 May operations or production be suspended?

(a) You may request approval of a suspension, or the Regional Supervisor may direct a suspension (Directed Suspension), for all or any part of a lease or unit area.


(b) Depending on the nature of the suspended activity, suspensions are labeled either Suspensions of Operations (SOO) or Suspensions of Production (SOP).


§ 250.169 What effect does suspension have on my lease?

(a) A suspension may extend the term of a lease (see § 250.180(b), (d), and (e)). The extension is equal to the length of time the suspension is in effect, except as provided in paragraph (b) of this section.


(b) A Directed Suspension does not extend the term of a lease when the Regional Supervisor directs a suspension because of:


(1) Gross negligence; or


(2) A willful violation of a provision of the lease or governing statutes and regulations.


§ 250.170 How long does a suspension last?

(a) BSEE may issue suspensions for up to 5 years per suspension. The Regional Supervisor will set the length of the suspension based on the conditions of the individual case involved. BSEE may grant consecutive suspension periods.


(b) An SOO ends automatically when the suspended operation commences.


(c) An SOP ends automatically when production begins.


(d) A Directed Suspension normally ends as specified in the letter directing the suspension.


(e) BSEE may terminate any suspension when the Regional Supervisor determines the circumstances that justified the suspension no longer exist or that other lease conditions warrant termination. The Regional Supervisor will notify you of the reasons for termination and the effective date.


§ 250.171 How do I request a suspension?

You must submit your request for a suspension to the Regional Supervisor, and BSEE must receive the request before the end of the lease term (i.e., end of primary term, end of the 1-year period following the last leaseholding operation, and end of a current suspension). Your request must include:


(a) The justification for the suspension including the length of suspension requested;


(b) A reasonable schedule of work leading to the commencement or restoration of the suspended activity;


(c) A statement that a well has been drilled on the lease and determined to be producible according to § 250.1603 (SOP only), 30 CFR 550.115, or 30 CFR 550.116;


(d) A commitment to production (SOP only); and


(e) The service fee listed in § 250.125 of this subpart.


[76 FR 64462, Oct. 18, 2011, as amended at 82 FR 26744, June 9, 2017]


§ 250.172 When may the Regional Supervisor grant or direct an SOO or SOP?

The Regional Supervisor may grant or direct an SOO or SOP under any of the following circumstances:


(a) When necessary to comply with judicial decrees prohibiting any activities or the permitting of those activities. The effective date of the suspension will be the effective date required by the action of the court;


(b) When activities pose a threat of serious, irreparable, or immediate harm or damage. This would include a threat to life (including fish and other aquatic life), property, any mineral deposit, or the marine, coastal, or human environment. BSEE may require you to do a site-specific study (see § 250.177(a)).


(c) When necessary for the installation of safety or environmental protection equipment;


(d) When necessary to carry out the requirements of NEPA or to conduct an environmental analysis; or


(e) When necessary to allow for inordinate delays encountered in obtaining required permits or consents, including administrative or judicial challenges or appeals.


§ 250.173 When may the Regional Supervisor direct an SOO or SOP?

The Regional Supervisor may direct a suspension when:


(a) You failed to comply with an applicable law, regulation, order, or provision of a lease or permit; or


(b) The suspension is in the interest of National security or defense.


§ 250.174 When may the Regional Supervisor grant or direct an SOP?

The Regional Supervisor may grant or direct an SOP when the suspension is in the National interest, and it is necessary because the suspension will meet one of the following criteria:


(a) It will allow you to properly develop a lease, including time to construct and install production facilities;


(b) It will allow you time to obtain adequate transportation facilities;


(c) It will allow you time to enter a sales contract for oil, gas, or sulphur. You must show that you are making an effort to enter into the contract(s); or


(d) It will avoid continued operations that would result in premature abandonment of a producing well(s).


§ 250.175 When may the Regional Supervisor grant an SOO?

(a) The Regional Supervisor may grant an SOO when necessary to allow you time to begin drilling or other operations when you are prevented by reasons beyond your control, such as unexpected weather, unavoidable accidents, or drilling rig delays.


(b) The Regional Supervisor may grant an SOO when all of the following conditions are met:


(1) The lease was issued with a primary lease term of 5 years, or with a primary term of 8 years with a requirement to drill within 5 years;


(2) Before the end of the third year of the primary term, you or your predecessor in interest must have acquired and interpreted geophysical information that indicates:


(i) The presence of a salt sheet;


(ii) That all or a portion of a potential hydrocarbon-bearing formation may lie beneath or adjacent to the salt sheet; and


(iii) The salt sheet interferes with identification of the potential hydrocarbon-bearing formation.


(3) The interpreted geophysical information required under paragraph (b)(2) of this section must include full 3-D depth migration beneath the salt sheet and over the entire lease area.


(4) Before requesting the suspension, you have conducted or are conducting additional data processing or interpretation of the geophysical information with the objective of identifying a potential hydrocarbon-bearing formation.


(5) You demonstrate that additional time is necessary to:


(i) Complete current processing or interpretation of existing geophysical data or information;


(ii) Acquire, process, or interpret new geophysical data or information; or


(iii) Drill into the potential hydrocarbon-bearing formation identified as a result of the activities conducted in paragraphs (b)(2), (b)(4), and (b)(5) of this section.


(c) The Regional Supervisor may grant an SOO to conduct additional geological and geophysical data analysis that may lead to the drilling of a well below 25,000 feet true vertical depth below the datum at mean sea level (TVD SS) when all of the following conditions are met:


(1) The lease was issued with a primary lease term of:


(i) Five years; or


(ii) Eight years with a requirement to drill within 5 years.


(2) Before the end of the fifth year of the primary term, you or your predecessor in interest must have acquired and interpreted geophysical information that:


(i) Indicates that all or a portion of a potential hydrocarbon-bearing formation lies below 25,000 feet TVD SS; and


(ii) Includes full 3-D depth migration over the entire lease area.


(3) Before requesting the suspension, you have conducted or are conducting additional data processing or interpretation of the geophysical information with the objective of identifying a potential hydrocarbon-bearing geologic structure or stratigraphic trap lying below 25,000 feet TVD SS.


(4) You demonstrate that additional time is necessary to:


(i) Complete current processing or interpretation of existing geophysical data or information;


(ii) Acquire, process, or interpret new geophysical or geological data or information that would affect the decision to drill the same geologic structure or stratigraphic trap, as determined by the Regional Supervisor, identified in paragraphs (c)(2) and (c)(3) of this section; or


(iii) Drill a well below 25,000 feet TVD SS into the geologic structure or stratigraphic trap identified as a result of the activities conducted in paragraphs (c)(2), (c)(3), and (c)(4)(i) and (ii) of this section.


§ 250.176 Does a suspension affect my royalty payment?

A directed suspension may affect the payment of rental or royalties for the lease as provided in 30 CFR 1218.154.


§ 250.177 What additional requirements may the Regional Supervisor order for a suspension?

If BSEE grants or directs a suspension under paragraph § 250.172(b), the Regional Supervisor may require you to:


(a) Conduct a site-specific study.


(1) The Regional Supervisor must approve or prescribe the scope for any site-specific study that you perform.


(2) The study must evaluate the cause of the hazard, the potential damage, and the available mitigation measures.


(3) You must pay for the study unless you request, and the Regional Supervisor agrees to arrange, payment by another party.


(4) You must furnish copies and results of the study to the Regional Supervisor.


(5) BSEE will make the results available to other interested parties and to the public.


(6) The Regional Supervisor will use the results of the study and any other information that becomes available:


(i) To decide if the suspension can be lifted; and


(ii) To determine any actions that you must take to mitigate or avoid any damage to the environment, life, or property.


(b) Submit a revised Exploration Plan (including any required mitigating measures);


(c) Submit a revised Development and Production Plan (including any required mitigating measures); or


(d) Submit a revised Development Operations Coordination Document according to 30 CFR part 550, subpart B.


Primary Lease Requirements, Lease Term Extensions, and Lease Cancellations

§ 250.180 What am I required to do to keep my lease term in effect?

(a) If your lease is in its primary term:


(1) You must submit a report to the District Manager according to paragraphs (h) and (i) of this section whenever production begins initially, whenever production ceases during the last year of the primary term, and whenever production resumes during the last year of the primary term.


(2) Your lease expires at the end of its primary term unless you are conducting operations on your lease (see 30 CFR part 556). For purposes of this section, the term operations means, drilling, well-reworking, or production in paying quantities. The objective of the drilling or well-reworking must be to establish production in paying quantities on the lease.


(b) If you stop conducting operations during the last year of your primary lease term, your lease will expire unless you either resume operations or receive an SOO or an SOP from the Regional Supervisor under § 250.172, § 250.173, § 250.174, or § 250.175 before the end of the year after you stop operations.


(c) If you extend your lease term under paragraph (b) of this section, you must pay rental or minimum royalty, as appropriate, for each year or part of the year during which your lease continues in force beyond the end of the primary lease term.


(d) If you stop conducting operations on a lease that has continued beyond its primary term, your lease will expire unless you resume operations or receive an SOO or an SOP from the Regional Supervisor under § 250.172, § 250.173, § 250.174, or § 250.175 before the end of the year after you stop operations.


(e) You may ask the Regional Supervisor to allow you more than a year to resume operations on a lease continued beyond its primary term when operating conditions warrant. The request must be in writing and explain the operating conditions that warrant a longer period. In allowing additional time, the Regional Supervisor must determine that the longer period is in the National interest, and it conserves resources, prevents waste, or protects correlative rights.


(f) When you begin conducting operations on a lease that has continued beyond its primary term, you must immediately notify the District Manager either orally or by fax or e-mail and follow up with a written report according to paragraph (g) of this section.


(g) If your lease is continued beyond its primary term, you must submit a report to the District Manager under paragraphs (h) and (i) of this section whenever production begins initially, whenever production ceases, whenever production resumes before the end of the 1-year period after having ceased, or whenever drilling or well-reworking operations begin before the end of the 1-year period.


(h) The reports required by paragraphs (a) and (g) of this section must contain:


(1) Name of lessee or operator;


(2) The well number, lease number, area, and block;


(3) As appropriate, the unit agreement name and number; and


(4) A description of the operation and pertinent dates.


(i) You must submit the reports required by paragraphs (a) and (g) of this section within the following timeframes:


(1) Initialization of production – within 5 days of initial production.


(2) Cessation of production – within 15 days after the first full month of zero production.


(3) Resumption of production – within 5 days of resuming production after ceasing production under paragraph (i)(2) of this section.


(4) Drilling or well reworking operations – within 5 days of beginning and completing the leaseholding operations.


(j) For leases continued beyond the primary term, you must immediately report to the District Manager if operations do not begin before the end of the 1-year period.


[76 FR 64462, Oct. 18, 2011, as amended at 82 FR 26744, June 9, 2017]


§§ 250.181-250.185 [Reserved]

Information and Reporting Requirements

§ 250.186 What reporting information and report forms must I submit?

(a) You must submit information and reports as BSEE requires.


(1) You may obtain copies of forms from, and submit completed forms to, the District Manager or Regional Supervisor.


(2) Instead of paper copies of forms available from the District Manager or Regional Supervisor, you may use your own computer-generated forms that are equal in size to BSEE’s forms. You must arrange the data on your form identical to the BSEE form. If you generate your own form and it omits terms and conditions contained on the official BSEE form, we will consider it to contain the omitted terms and conditions.


(3) You may submit digital data when the Region/District is equipped to accept it.


(b) When BSEE specifies, you must include, for public information, an additional copy of such reports.


(1) You must mark it Public Information


(2) You must include all required information, except information exempt from public disclosure under § 250.197 or otherwise exempt from public disclosure under law or regulation.


§ 250.187 What are BSEE’s incident reporting requirements?

(a) You must report all incidents listed in § 250.188(a) and (b) to the District Manager. The specific reporting requirements for these incidents are contained in §§ 250.189 and 250.190.


(b) These reporting requirements apply to incidents that occur on the area covered by your lease, right-of-use and easement, pipeline right-of-way, or other permit issued by BOEM or BSEE, and that are related to operations resulting from the exercise of your rights under your lease, right-of-use and easement, pipeline right-of-way, or permit.


(c) Nothing in this subpart relieves you from making notifications and reports of incidents that may be required by other regulatory agencies.


(d) You must report all spills of oil or other liquid pollutants in accordance with 30 CFR 254.46.


§ 250.188 What incidents must I report to BSEE and when must I report them?

(a) You must report the following incidents to the District Manager immediately via oral communication, and provide a written follow-up report (hard copy or electronically transmitted) within 15 calendar days after the incident:


(1) All fatalities.


(2) All injuries that require the evacuation of the injured person(s) from the facility to shore or to another offshore facility.


(3) All losses of well control. “Loss of well control” means:


(i) Uncontrolled flow of formation or other fluids. The flow may be to an exposed formation (an underground blowout) or at the surface (a surface blowout);


(ii) Flow through a diverter; or


(iii) Uncontrolled flow resulting from a failure of surface equipment or procedures.


(4) All fires and explosions.


(5) All reportable releases of hydrogen sulfide (H2S) gas, as defined in § 250.490(l).


(6) All collisions that result in property or equipment damage greater than $25,000. “Collision” means the act of a moving vessel (including an aircraft) striking another vessel, or striking a stationary vessel or object (e.g., a boat striking a drilling rig or platform). “Property or equipment damage” means the cost of labor and material to restore all affected items to their condition before the damage, including, but not limited to, the OCS facility, a vessel, helicopter, or equipment. It does not include the cost of salvage, cleaning, gas-freeing, dry docking, or demurrage.


(7) All incidents involving structural damage to an OCS facility. “Structural damage” means damage severe enough so that operations on the facility cannot continue until repairs are made.


(8) All incidents involving crane or personnel/material handling operations.


(9) All incidents that damage or disable safety systems or equipment (including firefighting systems).


(b) You must provide a written report of the following incidents to the District Manager within 15 calendar days after the incident:


(1) Any injuries that result in one or more days away from work or one or more days on restricted work or job transfer. One or more days means the injured person was not able to return to work or to all of their normal duties the day after the injury occurred;


(2) All gas releases that initiate equipment or process shutdown;


(3) All incidents that require operations personnel on the facility to muster for evacuation for reasons not related to weather or drills;


(4) All other incidents, not listed in paragraph (a) of this section, resulting in property or equipment damage greater than $25,000.


(c) On the Arctic OCS, in addition to the requirements of paragraphs (a) and (b) of this section, you must provide to the BSEE inspector on location, if one is present, or to the Regional Supervisor, both of the following:


(1) An immediate oral report if any of the following occur:


(i) Any sea ice movement or condition that has the potential to affect your operation or trigger ice management activities;


(ii) The start and termination of ice management activities; or


(iii) Any “kicks” or operational issues that are unexpected and could result in the loss of well control.


(2) Within 24 hours after completing ice management activities, a written report of such activities that conforms to the content requirements in § 250.190.


[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 46560, July 15, 2016]


§ 250.189 Reporting requirements for incidents requiring immediate notification.

For an incident requiring immediate notification under § 250.188(a), you must notify the District Manager via oral communication immediately after aiding the injured and stabilizing the situation. Your oral communication must provide the following information:


(a) Date and time of occurrence;


(b) Operator, and operator representative’s, name and telephone number;


(c) Contractor, and contractor representative’s name and telephone number (if a contractor is involved in the incident or injury/fatality);


(d) Lease number, OCS area, and block;


(e) Platform/facility name and number, or pipeline segment number;


(f) Type of incident or injury/fatality;


(g) Operation or activity at time of incident (i.e., drilling, production, workover, completion, pipeline, crane, etc.); and


(h) Description of the incident, damage, or injury/fatality.


§ 250.190 Reporting requirements for incidents requiring written notification.

(a) For any incident covered under § 250.188, you must submit a written report within 15 calendar days after the incident to the District Manager. The report must contain the following information:


(1) Date and time of occurrence;


(2) Operator, and operator representative’s name and telephone number;


(3) Contractor, and contractor representative’s name and telephone number (if a contractor is involved in the incident or injury);


(4) Lease number, OCS area, and block;


(5) Platform/facility name and number, or pipeline segment number;


(6) Type of incident or injury;


(7) Operation or activity at time of incident (i.e., drilling, production, workover, completion, pipeline, crane etc.);


(8) Description of incident, damage, or injury (including days away from work, restricted work or job transfer), and any corrective action taken; and


(9) Property or equipment damage estimate (in U.S. dollars).


(b) You may submit a report or form prepared for another agency in lieu of the written report required by paragraph (a) of this section, provided the report or form contains all required information.


(c) The District Manager may require you to submit additional information about an incident on a case-by-case basis.


§ 250.191 How does BSEE conduct incident investigations?

Any investigation that BSEE conducts under the authority of sections 22(d)(1) and (2) of the Act (43 U.S.C. 1348(d)(1) and (2)) is a fact-finding proceeding with no adverse parties. The purpose of the investigation is to prepare a public report that determines the cause or causes of the incident. The investigation may involve panel meetings conducted by a chairperson appointed by BSEE. The following requirements apply to any panel meetings involving persons giving testimony:


(a) A person giving testimony may have legal or other representative(s) present to provide advice or counsel while the person is giving testimony. The chairperson may require a verbatim transcript to be made of all oral testimony. The chairperson also may accept a sworn written statement in lieu of oral testimony.


(b) Only panel members, and any experts the panel deems necessary, may address questions to any person giving testimony.


(c) The chairperson may issue subpoenas to persons to appear and provide testimony or documents at a panel meeting. A subpoena may not require a person to attend a panel meeting held at a location more than 100 miles from where a subpoena is served.


(d) Any person giving testimony may request compensation for mileage, and fees for services, within 90 days after the panel meeting. The compensated expenses must be similar to mileage and fees the U.S. District Courts allow.


§ 250.192 What reports and statistics must I submit relating to a hurricane, earthquake, or other natural occurrence?

(a) You must submit evacuation statistics to the Regional Supervisor for a natural occurrence, such as a hurricane, a tropical storm, or an earthquake. Statistics include facilities and rigs evacuated and the amount of production shut-in for gas and oil. You must:


(1) Submit the statistics by fax or e-mail (for activities in the BSEE GOM OCS Region, use Form BSEE-0132) as soon as possible when evacuation occurs. In lieu of submitting your statistics by fax or e-mail, you may submit them electronically in accordance with 30 CFR 250.186(a)(3);


(2) Submit the statistics on a daily basis by 11 a.m., as conditions allow, during the period of shut-in and evacuation;


(3) Inform BSEE when you resume production; and


(4) Submit the statistics either by BSEE district, or the total figures for your operations in a BSEE region.


(b) If your facility, production equipment, or pipeline is damaged by a natural occurrence, you must:


(1) Submit an initial damage report to the Regional Supervisor within 48 hours after you complete your initial evaluation of the damage. You must use Form BSEE-0143, Facility/Equipment Damage Report, to make this and all subsequent reports. In lieu of submitting Form BSEE-0143 by fax or e-mail, you may submit the damage report electronically in accordance with 30 CFR 250.186(a)(3). In the report, you must:


(i) Name the items damaged (e.g., platform or other structure, production equipment, pipeline);


(ii) Describe the damage and assess the extent of the damage (major, medium, minor); and


(iii) Estimate the time it will take to replace or repair each damaged structure and piece of equipment and return it to service. The initial estimate need not be provided on the form until availability of hardware and repair capability has been established (not to exceed 30 days from your initial report).


(2) Submit subsequent reports monthly and immediately whenever information submitted in previous reports changes until the damaged structure or equipment is returned to service. In the final report, you must provide the date the item was returned to service.


§ 250.193 Reports and investigations of possible violations.

(a) Any person may report to BSEE any hazardous or unsafe working condition on any facility engaged in OCS activities, and any possible violation or failure to comply with:


(1) Any provision of the Act,


(2) Any provision of a lease, approved plan, or permit issued under the Act,


(3) Any provision of any regulation or order issued under the Act, or


(4) Any other Federal law relating to safety of offshore oil and gas operations.


(b) To make a report under this section, a person is not required to know whether any legal requirement listed in paragraph (a) of this section has been violated.


(c) When BSEE receives a report of a possible violation, or when a BSEE employee detects a possible violation, BSEE will investigate according to BSEE procedures and notify any other Federal agency(ies) for further investigation, as appropriate.


(d) BSEE investigations of possible violations may include:


(1) Conducting interviews of personnel;


(2) Requiring the prompt production of documents, data, and other evidence;


(3) Requiring the preservation of all relevant evidence and access for BSEE investigators to such evidence; and


(4) Taking other actions and imposing other requirements as necessary to investigate possible violations and assure an orderly investigation.


(e)(1) Reports should contain sufficient credible information to establish a reasonable basis for BSEE to investigate whether a violation or other hazardous or unsafe working condition exists.


(2) To report hazardous or unsafe working conditions or a possible violation:


(i) Contact BSEE by:


(A) Phone at 1-877-440-0173 (BSEE Toll-free Safety Hotline),


(B) Internet at www.bsee.gov, or


(C) Mail to: U.S. DOI/BSEE, 1849 C Street NW., Mail Stop 5438, Washington, DC 20240 Attention: IRU Hotline Operations.


(ii) Include the following items in the report:


(A) Name, address, and telephone number should be provided if you do not want to remain anonymous;


(B) The specific concern, provision or Federal law, if known, referenced in (a) that a person violated or with which a person failed to comply; and


(C) Any other facts, data, and applicable information.


(f) When a possible violation is reported, BSEE will protect a person’s identity to the extent authorized by law.


[78 FR 20439, Apr. 5, 2013, as amended at 81 FR 36149, June 6, 2016]


§ 250.194 How must I protect archaeological resources?

(a)-(b) [Reserved]


(c) If you discover any archaeological resource while conducting operations in the lease or right-of-way area, you must immediately halt operations within the area of the discovery and report the discovery to the BSEE Regional Director. If investigations determine that the resource is significant, the Regional Director will tell you how to protect it.


§ 250.195 What notification does BSEE require on the production status of wells?

You must notify the appropriate BSEE District Manager when you successfully complete or recomplete a well for production. You must:


(a) Notify the District Manager within 5 working days of placing the well in a production status. You must confirm oral notification by telefax or e-mail within those 5 working days.


(b) Provide the following information in your notification:


(1) Lessee or operator name;


(2) Well number, lease number, and OCS area and block designations;


(3) Date you placed the well on production (indicate whether or not this is first production on the lease);


(4) Type of production; and


(5) Measured depth of the production interval.


§ 250.196 Reimbursements for reproduction and processing costs.

(a) BSEE will reimburse you for costs of reproducing data and information that the Regional Director requests if:


(1) You deliver geophysical and geological (G&G) data and information to BSEE for the Regional Director to inspect or select and retain;


(2) BSEE receives your request for reimbursement and the Regional Director determines that the requested reimbursement is proper; and


(3) The cost is at your lowest rate or at the lowest commercial rate established in the area, whichever is less.


(b) BSEE will reimburse you for the costs of processing geophysical information (that does not include cost of data acquisition):


(1) If, at the request of the Regional Director, you processed the geophysical data or information in a form or manner other than that used in the normal conduct of business; or


(2) If you collected the information under a permit that BSEE issued to you before October 1, 1985, and the Regional Director requests and retains the information.


(c) When you request reimbursement, you must identify reproduction and processing costs separately from acquisition costs.


(d) BSEE will not reimburse you for data acquisition costs or for the costs of analyzing or processing geological information or interpreting geological or geophysical information.


§ 250.197 Data and information to be made available to the public or for limited inspection.

BSEE will protect data and information that you submit under this part, and 30 CFR part 203, as described in this section. Paragraphs (a) and (b) of this section describe what data and information will be made available to the public without the consent of the lessee, under what circumstances, and in what time period. Paragraph (c) of this section describes what data and information will be made available for limited inspection without the consent of the lessee, and under what circumstances.


(a) All data and information you submit on BSEE forms will be made available to the public upon submission, except as specified in the following table:


On form . . .
Data and information not immediately available are . . .
Excepted data will be made available . . .
(1) BSEE-0123, Application for Permit to Drill,Items 15, 16, 22 through 25,When the well goes on production or according to the table in paragraph (b) of this section, whichever is earlier.
(2) BSEE-0123S, Supplemental APD Information Sheet,Items 3, 7, 8, 15 and 17,When the well goes on production or according to the table in paragraph (b) of this section, whichever is earlier.
(3) BSEE-0124, Application for Permit to Modify,Item 17,When the well goes on production or according to the table in paragraph (b) of this section, whichever is earlier.
(4) BSEE-0125, End of Operations Report,Items 12, 13, 17, 21, 22, 26 through 38,When the well goes on production or according to the table in paragraph (b) of this section, whichever is earlier. However, items 33 through 38 will not be released when the well goes on production unless the period of time in the table in paragraph (b) has expired.
(5) BSEE-0126, Well Potential Test Report,Item 101,2 years after you submit it.
(6) [Reserved]
(7) BSEE-0133 Well Activity Report,Item 10 Fields [WELLBORE START DATE, TD DATE, OP STATUS, END DATE, MD, TVD, AND MW PPG]. Item 11 Fields [WELLBORE START DATE, TD DATE, PLUGBACK DATE, FINAL MD, AND FINAL TVD] and Items 12 through 15,When the well goes on production or according to the table in paragraph (b) of this section, whichever is earlier.
(8) BSEE-0133S Open Hole Data Report,Boxes 7 and 8,When the well goes on production or according to the table in paragraph (b) of this section, whichever is earlier.
(9) [Reserved]
(10) [Reserved]

(b) BSEE will release lease and permit data and information that you submit and BSEE retains, but that are not normally submitted on BSEE forms, according to the following table:


If . . .
BSEE will release . . .
At this time . . .
Special provisions . . .
(1) The Director determines that data and information are needed for specific scientific or research purposes for the Government,Geophysical data, Geological data Interpreted G&G information, Processed G&G information, Analyzed geological information,At any time,BSEE will release data and information only if release would further the National interest without unduly damaging the competitive position of the lessee.
(2) Data or information is collected with high-resolution systems (e.g., bathymetry, side-scan sonar, subbottom profiler, and magnetometer) to comply with safety or environmental protection requirements,Geophysical data, Geological data, Interpreted G&G information, Processed geological information, Analyzed geological information,60 days after BSEE receives the data or information, if the Regional Supervisor deems it necessary,BSEE will release the data and information earlier than 60 days if the Regional Supervisor determines it is needed by affected States to make decisions under 30 CFR 550, subpart B. The Regional Supervisor will reconsider earlier release if you satisfy him/her that it would unduly damage your competitive position.
(3) Your lease is no longer in effect,Geophysical data, Geological data, Processed G&G information Interpreted G&G information, Analyzed geological information,When your lease terminates,This release time applies only if the provisions in this table governing high-resolution systems and the provisions in 30 CFR 552.7 do not apply. The release time applies to the geophysical data and information only if acquired postlease for a lessee’s exclusive use.
(4) Your lease is still in effect,Geophysical data, Processed geophysical information, Interpreted G&G information,10 years after you submit the data and information,This release time applies only if the provisions in this table governing high-resolution systems and the provisions in 30 CFR 552.7 do not apply. This release time applies to the geophysical data and information only if acquired postlease for a lessee’s exclusive use.
(5) Your lease is still in effect and within the primary term specified in the lease,Geological data, Analyzed geological information,2 years after the required submittal date or 60 days after a lease sale if any portion of an offered lease is within 50 miles of a well, whichever is later,These release times apply only if the provisions in this table governing high-resolution systems and the provisions in 30 CFR 552.7 do not apply. If the primary term specified in the lease is extended under the heading of “Suspensions” in this subpart, the extension applies to this provision.
(6) Your lease is in effect and beyond the primary term specified in the lease,Geological data, Analyzed geological information,2 years after the required submittal date,None.
(7) Data or information is submitted on well operations,Descriptions of downhole locations, operations, and equipment,When the well goes on production or when geological data is released according to §§ 250.197(b)(5) and (b)(6), whichever occurs earlier,Directional survey data may be released earlier to the owner of an adjacent lease according to Subpart D of this part.
(8) Data and information are obtained from beneath unleased land as a result of a well deviation that has not been approved by the District Manager or Regional Supervisor,Any data or information obtained,At any time,None.
(9) Except for high-resolution data and information released under paragraph (b)(2) of this section data and information acquired by a permit under 30 CFR part 551 are submitted by a lessee under 30 CFR part 203, 30 CFR part 250, or 30 CFR part 550,G&G data, analyzed geological information, processed and interpreted G&G information,Geological data and information: 10 years after BOEM issues the permit; Geophysical data: 50 years after BOEM issues the permit; Geophysical information: 25 years after BOEM issues the permit,None.

(c) BSEE may allow limited inspection, but only by persons with a direct interest in related BSEE decisions and issues in specific geographic areas, and who agree in writing to its confidentiality, of G&G data and information submitted under this part or 30 CFR part 203 that BSEE uses to:


(1) Make unitization determinations on two or more leases;


(2) Make competitive reservoir determinations;


(3) Ensure proper plans of development for competitive reservoirs;


(4) Promote operational safety;


(5) Protect the environment;


(6) [Reserved]; or


(7) Determine eligibility for royalty relief.


References

§ 250.198 Documents incorporated by reference.

Certain material is incorporated by reference into this part with the approval of the Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51. All incorporated material is available for inspection at the Houston BSEE office at 1919 Smith Street Suite 14042, Houston, Texas 77002 and is available from the sources indicated in this section. It is also available for inspection at the National Archives and Records Administration (NARA). To make an appointment to inspect incorporated material at the Houston BSEE office, call 1-844-259-4779. For information on the availability of this material at NARA, call 202-741-6030 or go to http://www.archives.gov/federal-register/cfr/ibr-locations.html.


(a) American Concrete Institute (ACI), ACI Standards, 38800 Country Club Drive, Farmington Hills, MI 48331-3439: http://www.concrete.org; phone: 248-848-3700:


(1) ACI Standard 318-95, Building Code Requirements for Reinforced Concrete, 1995; incorporated by reference at § 250.901.


(2) ACI 318R-95, Commentary on Building Code Requirements for Reinforced Concrete, 1995; incorporated by reference at § 250.901.


(3) ACI 357R-84, Guide for the Design and Construction of Fixed Offshore Concrete Structures, 1984; reapproved 1997, incorporated by reference at § 250.901.


(b) American Gas Association (AGA Reports), 400 North Capitol Street NW, Suite 450, Washington, DC 20001, http://www.aga.org; phone: 202-824-7000;


(1) AGA Report No. 7 – Measurement of Natural Gas by Turbine Meters; Revised February 2006; incorporated by reference at § 250.1203(b);


(2) AGA Report No. 9 – Measurement of Gas by Multipath Ultrasonic Meters; Second Edition, April 2007; incorporated by reference at § 250.1203(b);


(3) AGA Report No. 10 – Speed of Sound in Natural Gas and Other Related Hydrocarbon Gases; Copyright 2003; incorporated by reference at § 250.1203(b).


(c) American Institute of Steel Construction, Inc. (AISC), AISC Standards, One East Wacker Drive, Suite 700, Chicago, IL 60601-1802; http://www.aisc.org; phone: 312-670-2400:


(1) ANSI/AISC 360-05, Specification for Structural Steel Buildings, incorporated by reference at § 250.901.


(2) [Reserved]


(d) American National Standards Institute (ANSI), http.www./webstore.ansi.org/; phone: 212-642-4900:


(1) ANSI/ASME B 16.5-2003, Pipe Flanges and Flanged Fittings, incorporated by reference at § 250.1002;


(2) ANSI/ASME B 31.8-2003, Gas Transmission and Distribution Piping Systems, incorporated by reference at § 250.1002;


(3) ANSI Z88.2-1992, American National Standard for Respiratory Protection, incorporated by reference at § 250.490.


(e) American Petroleum Institute (API), API Recommended Practices (RP), Specs, Standards, Manual of Petroleum Measurement Standards (MPMS) chapters, 1220 L Street, NW, Washington, DC 20005-4070; http://www.api.org; phone: 202-682-8000:


(1) API 510, Pressure Vessel Inspection Code: In-Service Inspection, Rating, Repair, and Alteration, Tenth Edition, May 2014; Addendum 1, May 2017; incorporated by reference at §§ 250.851(a) and 250.1629(b);


(2) API 570, Piping Inspection Code: In-service Inspection, Rating, Repair, and Alteration of Piping Systems, Fourth Edition, February 2016; Addendum 1, May 2017; incorporated by reference at § 250.841(b).


(3) API Bulletin 2INT-DG, Interim Guidance for Design of Offshore Structures for Hurricane Conditions, May 2007; incorporated by reference at § 250.901;


(4) API Bulletin 2INT-EX, Interim Guidance for Assessment of Existing Offshore Structures for Hurricane Conditions, May 2007; incorporated by reference at § 250.901;


(5) API Bulletin 2INT-MET, Interim Guidance on Hurricane Conditions in the Gulf of Mexico, May 2007; incorporated by reference at § 250.901;


(6) API Bulletin 92L, Drilling Ahead Safely with Lost Circulation in the Gulf of Mexico, First Edition, August 2015; incorporated by reference at § 250.427(b);


(7) API MPMS Chapter 1 – Vocabulary, Second Edition, July 1994; incorporated by reference at § 250.1201;


(8) API MPMS Chapter 2 – Tank Calibration, Section 2A – Measurement and Calibration of Upright Cylindrical Tanks by the Manual Tank Strapping Method, First Edition, February 1995; reaffirmed August 2017; incorporated by reference at § 250.1202;


(9) API MPMS Chapter 2 – Tank Calibration, Section 2B – Calibration of Upright Cylindrical Tanks Using the Optical Reference Line Method, First Edition, March 1989; reaffirmed April 2019 (including Addendum 1, October 2019); incorporated by reference at § 250.1202;


(10) API MPMS Chapter 3 – Tank Gauging, Section 1A – Standard Practice for the Manual Gauging of Petroleum and Petroleum Products, Second Edition, August 2005; incorporated by reference at § 250.1202;


(11) API MPMS Chapter 3 – Tank Gauging, Section 1B – Standard Practice for Level Measurement of Liquid Hydrocarbons in Stationary Tanks by Automatic Tank Gauging, Second Edition, June 2001; reaffirmed February 2016; incorporated by reference at § 250.1202;


(12) API MPMS Chapter 4 – Proving Systems, Section 1 – Introduction, Third Edition, February 2005; reaffirmed June 2014; incorporated by reference at § 250.1202;


(13) API MPMS Chapter 4 – Proving Systems, Section 2 – Displacement Provers, Third Edition, September 2003; incorporated by reference at § 250.1202;


(14) API MPMS Chapter 4 – Proving Systems, Section 4 – Tank Provers, Second Edition, May 1998, reaffirmed May 2015; incorporated by reference at § 250.1202;


(15) API MPMS Chapter 4 – Proving Systems, Section 5 – Master-Meter Provers, Second Edition, May 2000, reaffirmed, August 2005; incorporated by reference at § 250.1202;


(16) API MPMS Chapter 4 – Proving Systems, Section 6 – Pulse Interpolation, Second Edition, May 1999; Errata April 2007; reaffirmed October 2013; incorporated by reference at § 250.1202;


(17) API MPMS Chapter 4 – Proving Systems, Section 7 – Field Standard Test Measures, Second Edition, December 1998; reaffirmed 2003; incorporated by reference at § 250.1202;


(18) API MPMS Chapter 4 – Proving Systems, Section 8 – Operation of Proving Systems; First Edition, reaffirmed March 2007; incorporated by reference at § 250.1202(a), (f), and (g);


(19) API MPMS Chapter 5 – Metering, Section 1 – General Considerations for Measurement by Meters, Fourth Edition, September 2005; incorporated by reference at § 250.1202;


(20) API MPMS Chapter 5 – Metering, Section 2 – Measurement of Liquid Hydrocarbons by Displacement Meters, Third Edition, September 2005; reaffirmed July 2015; incorporated by reference at § 250.1202;


(21) API MPMS Chapter 5 – Metering, Section 3 – Measurement of Liquid Hydrocarbons by Turbine Meters, Fifth Edition, September 2005; reaffirmed August 1, 2014; incorporated by reference at § 250.1202;


(22) API MPMS Chapter 5 – Metering, Section 4 – Accessory Equipment for Liquid Meters, Fourth Edition, September 2005; reaffirmed August 2015; incorporated by reference at § 250.1202;


(23) API MPMS Chapter 5 – Metering, Section 5 – Fidelity and Security of Flow Measurement Pulsed-Data Transmission Systems, Second Edition, August 2005; reaffirmed August 2015; incorporated by reference at § 250.1202;


(24) API MPMS Chapter 5 – Metering, Section 6 – Measurement of Liquid Hydrocarbons by Coriolis Meters; First Edition, October 2002; reaffirmed November 2013; incorporated by reference at § 250.1202;


(25) API MPMS Chapter 5 – Metering, Section 8 – Measurement of Liquid Hydrocarbons by Ultrasonic Flow Meters Using Transit Time Technology; First Edition, February 2005; incorporated by reference at § 250.1202(a);


(26) API MPMS Chapter 6 – Metering Assemblies, Section 1 – Lease Automatic Custody Transfer (LACT) Systems, Second Edition, May 1991; reaffirmed May 2012; incorporated by reference at § 250.1202;


(27) API MPMS Chapter 6 – Metering Assemblies, Section 6 – Pipeline Metering Systems, Second Edition, May 1991; reaffirmed December 2017; incorporated by reference at § 250.1202;


(28) API MPMS Chapter 6 – Metering Assemblies, Section 7 – Metering Viscous Hydrocarbons, Second Edition, May 1991; reaffirmed March 2018; incorporated by reference at § 250.1202;


(29) API MPMS Chapter 7 – Temperature Determination, First Edition, June 2001; reaffirmed, March 2007; incorporated by reference at § 250.1202;


(30) API MPMS Chapter 8 – Sampling, Section 1 – Standard Practice for Manual Sampling of Petroleum and Petroleum Products, Third Edition, October 1995; reaffirmed, March 2006; incorporated by reference at § 250.1202;


(31) API MPMS Chapter 8 – Sampling, Section 2 – Standard Practice for Automatic Sampling of Liquid Petroleum and Petroleum Products, Second Edition, October 1995; reaffirmed, June 2005; incorporated by reference at § 250.1202;


(32) API MPMS Chapter 9 – Density Determination, Section 1 – Standard Test Method for Density, Relative Density (Specific Gravity), or API Gravity of Crude Petroleum and Liquid Petroleum Products by Hydrometer Method, Second Edition, December 2002; reaffirmed October 2005; incorporated by reference at § 250.1202(a) and (l);


(33) API MPMS Chapter 9 – Density Determination, Section 2 – Standard Test Method for Density or Relative Density of Light Hydrocarbons by Pressure Hydrometer, Second Edition, March 2003; incorporated by reference at § 250.1202;


(34) API MPMS Chapter 10 – Sediment and Water, Section 1 – Standard Test Method for Sediment in Crude Oils and Fuel Oils by the Extraction Method, Third Edition, November 2007; reaffirmed October 2012; incorporated by reference at § 250.1202;


(35) API MPMS Chapter 10 – Sediment and Water, Section 2 – Standard Test Method for Water in Crude Oil by Distillation, Second Edition, November 2007; incorporated by reference at § 250.1202;


(36) API MPMS Chapter 10 – Sediment and Water, Section 3 – Standard Test Method for Water and Sediment in Crude Oil by the Centrifuge Method (Laboratory Procedure), Third Edition, May 2008; incorporated by reference at § 250.1202;


(37) API MPMS Chapter 10 – Sediment and Water, Section 4 – Determination of Water and/or Sediment in Crude Oil by the Centrifuge Method (Field Procedure), Third Edition, December 1999; incorporated by reference at § 250.1202;


(38) API MPMS Chapter 10 – Sediment and Water, Section 9 – Standard Test Method for Water in Crude Oils by Coulometric Karl Fischer Titration, Second Edition, December 2002; reaffirmed 2005; incorporated by reference at § 250.1202;


(39) API MPMS Chapter 11.1 – Volume Correction Factors, Volume 1, Table 5A – Generalized Crude Oils and JP-4 Correction of Observed API Gravity to API Gravity at 60 °F, and Table 6A – Generalized Crude Oils and JP-4 Correction of Volume to 60 °F Against API Gravity at 60 °F, API Standard 2540, First Edition, August 1980; reaffirmed March 1997; incorporated by reference at § 250.1202;


(40) API MPMS Chapter 11.2.2 – Compressibility Factors for Hydrocarbons: 0.350-0.637 Relative Density (60 °F/60 °F) and −50 °F to 140 °F Metering Temperature, Second Edition, October 1986; reaffirmed: December 2007; incorporated by reference at § 250.1202;


(41) API MPMS Chapter 11 – Physical Properties Data, Section 1 – Temperature and Pressure Volume Correction Factors for Generalized Crude Oils, Refined Products, and Lubricating Oils; May 2004 (incorporating Addendum 1, September 2007); incorporated by reference at § 250.1202(a), (g), and (l);


(42) API MPMS Chapter 11 – Physical Properties Data, Addendum to Section 2, Part 2 – Compressibility Factors for Hydrocarbons, Correlation of Vapor Pressure for Commercial Natural Gas Liquids, First Edition, December 1994; reaffirmed, December 2002; incorporated by reference at § 250.1202;


(43) API MPMS, Chapter 12 – Calculation of Petroleum Quantities, Section 2 – Calculation of Petroleum Quantities Using Dynamic Measurement Methods and Volumetric Correction Factors, Part 1 – Introduction, Second Edition, May 1995; reaffirmed March 2014; incorporated by reference at § 250.1202;


(44) API MPMS, Chapter 12 – Calculation of Petroleum Quantities, Section 2 – Calculation of Petroleum Quantities Using Dynamic Measurement Methods and Volumetric Correction Factors, Part 2 – Measurement Tickets, Third Edition, June 2003; reaffirmed February 2016; incorporated by reference at § 250.1202;


(45) API MPMS Chapter 12 – Calculation of Petroleum Quantities, Section 2 – Calculation of Petroleum Quantities Using Dynamic Measurement Methods and Volumetric Correction Factors, Part 3 – Proving Reports; First Edition, October 1998, reaffirmed March 2014; incorporated by reference at § 250.1202(a) and (g);


(46) API MPMS Chapter 12 – Calculation of Petroleum Quantities, Section 2 – Calculation of Petroleum Quantities Using Dynamic Measurement Methods and Volumetric Correction Factors, Part 4 – Calculation of Base Prover Volumes by the Waterdraw Method, First Edition, December 1997; reaffirmed September 2014; incorporated by reference at § 250.1202(a), (f), and (g);


(47) API MPMS Chapter 14 – Natural Gas Fluids Measurement, Section 3 – Concentric, Square-Edged Orifice Meters, Part 1 – General Equations and Uncertainty Guidelines, Third Edition, September 1990; reaffirmed, January 2003; incorporated by reference at § 250.1203;


(48) API MPMS Chapter 14 – Natural Gas Fluids Measurement, Section 3 – Concentric, Square-Edged Orifice Meters, Part 2 – Specification and Installation Requirements, Fourth Edition, April 2000; reaffirmed March 2006; incorporated by reference at § 250.1203;


(49) API MPMS Chapter 14 – Natural Gas Fluids Measurement, Section 3 – Concentric, Square-Edged Orifice Meters; Part 3 – Natural Gas Applications; Third Edition, August 1992; Errata March 1994, reaffirmed, February 2009; incorporated by reference at § 250.1203;


(50) API MPMS, Chapter 14.5/GPA Standard 2172-09; Calculation of Gross Heating Value, Relative Density, Compressibility and Theoretical Hydrocarbon Liquid Content for Natural Gas Mixtures for Custody Transfer; Third Edition, January 2009; reaffirmed February 2014; incorporated by reference at § 250.1203;


(51) API MPMS Chapter 14 – Natural Gas Fluids Measurement, Section 6 – Continuous Density Measurement, Second Edition, April 1991; reaffirmed, February 2006; incorporated by reference at § 250.1203;


(52) API MPMS Chapter 14 – Natural Gas Fluids Measurement, Section 8 – Liquefied Petroleum Gas Measurement, Second Edition, July 1997; reaffirmed, March 2006; incorporated by reference at § 250.1203;


(53) API MPMS Chapter 20 – Section 1 – Allocation Measurement, First Edition, September 1993; reaffirmed October 2006; incorporated by reference at § 250.1202;


(54) API MPMS Chapter 21 – Flow Measurement Using Electronic Metering Systems, Section 1 – Electronic Gas Measurement, First Edition, August 1993; reaffirmed, July 2005; incorporated by reference at § 250.1203;


(55) API MPMS Chapter 21 – Flow Measurement Using Electronic Metering Systems, Section 2 – Electronic Liquid Volume Measurement Using Positive Displacement and Turbine Meters; First Edition, June 1998; reaffirmed October 2016; incorporated by reference at § 250.1202(a);


(56) API MPMS Chapter 21 – Flow Measurement Using Electronic Metering Systems, Addendum to Section 2 – Flow Measurement Using Electronic Metering Systems, Inferred Mass; First Edition, reaffirmed February 2006; incorporated by reference at § 250.1202(a);


(57) API RP 2A-WSD, Recommended Practice for Planning, Designing and Constructing Fixed Offshore Platforms – Working Stress Design, Twenty-first Edition, December 2000; Errata and Supplement 1, December 2002; Errata and Supplement 2, September 2005; Errata and Supplement 3, October 2007; incorporated by reference at §§ 250.901, 250.908, 250.919, and 250.920;


(58) API RP 2D, Operation and Maintenance of Offshore Cranes, Sixth Edition, May 2007; incorporated by reference at § 250.108;


(59) API RP 2FPS, RP for Planning, Designing, and Constructing Floating Production Systems; First Edition, March 2001; incorporated by reference at § 250.901;


(60) API RP 2I, In-Service Inspection of Mooring Hardware for Floating Structures; Third Edition, April 2008; incorporated by reference at § 250.901(a) and (d);


(61) ANSI/API RP 2N, Third Edition, “Recommended Practice for Planning, Designing, and Constructing Structures and Pipelines for Arctic Conditions”, Third Edition, April 2015; incorporated by reference at § 250.470(g);


(62) API RP 2RD, Recommended Practice for Design of Risers for Floating Production Systems (FPSs) and Tension-Leg Platforms (TLPs), First Edition, June 1998; reaffirmed, May 2006, Errata, June 2009; incorporated by reference at §§ 250.733, 250.800(c), 250.901(a), (d), and 250.1002(b);


(63) API RP 2SK, Design and Analysis of Stationkeeping Systems for Floating Structures, Third Edition, October 2005, Addendum, May 2008, reaffirmed June 2015; incorporated by reference at §§ 250.800(c) and 250.901(a) and (d);


(64) API RP 2SM, Recommended Practice for Design, Manufacture, Installation, and Maintenance of Synthetic Fiber Ropes for Offshore Mooring, First Edition, March 2001, Addendum, May 2007; incorporated by reference at §§ 250.800(c) and 250.901(a) and (d);


(65) API RP 2T, Recommended Practice for Planning, Designing, and Constructing Tension Leg Platforms, Second Edition, August 1997; incorporated by reference at § 250.901(a) and (d);


(66) ANSI/API RP 14B, Design, Installation, Operation, Test, and Redress of Subsurface Safety Valve Systems, Sixth Edition, September 2015; incorporated by reference at §§ 250.802(b), 250.803(a), 250.814(d), 250.828(c), and 250.880(c);


(67) API RP 14C, Recommended Practice for Analysis, Design, Installation, and Testing of Basic Surface Safety Systems for Offshore Production Platforms, Seventh Edition, March 2001, reaffirmed: March 2007; incorporated by reference at §§ 250.125(a), 250.292(j), 250.841(a), 250.842(a), 250.850, 250.852(a), 250.855, 250.856(a), 250.858(a), 250.862(e), 250.865(a), 250.867(a), 250.869(a) through (c), 250.872(a), 250.873(a), 250.874(a), 250.880(b) and (c), 250.1002(d), 250.1004(b), 250.1628(c) and (d), 250.1629(b), and 250.1630(a);


(68) API RP 14E, Recommended Practice for Design and Installation of Offshore Production Platform Piping Systems, Fifth Edition, October 1991; reaffirmed, January 2013; incorporated by reference at §§ 250.841(b), 250.842(a), and 250.1628(b) and (d);


(69) API RP 14F, Recommended Practice for Design, Installation, and Maintenance of Electrical Systems for Fixed and Floating Offshore Petroleum Facilities for Unclassified and Class 1, Division 1 and Division 2 Locations, Upstream Segment, Fifth Edition, July 2008, reaffirmed: April 2013; incorporated by reference at §§ 250.114(c), 250.842(c), 250.862(e), and 250.1629(b);


(70) API RP 14FZ, Recommended Practice for Design, Installation, and Maintenance of Electrical Systems for Fixed and Floating Offshore Petroleum Facilities for Unclassified and Class I, Zone 0, Zone 1 and Zone 2 Locations, Second Edition, May 2013; incorporated by reference at §§ 250.114(c), 250.842(c), 250.862(e), and 250.1629(b);


(71) API RP 14G, Recommended Practice for Fire Prevention and Control on Fixed Open-type Offshore Production Platforms, Fourth Edition, April 2007; Reaffirmed, January 2013; incorporated by reference at §§ 250.859(a), 250.862(e), 250.880(c), and 250.1629(b);


(72) API RP 14J, Recommended Practice for Design and Hazards Analysis for Offshore Production Facilities, Second Edition, May 2001; reaffirmed: January 2013; incorporated by reference at §§ 250.800(b) and (c), 250.842(c), and 250.901(a) and (d);


(73) API RP 17H, Remotely Operated Tools and Interfaces on Subsea Production Systems, Second Edition, June 2013; Errata, January 2014; incorporated by reference at § 250.734(a);


(74) API RP 65, Recommended Practice for Cementing Shallow Water Flow Zones in Deepwater Wells, First Edition, September 2002; incorporated by reference at § 250.415;


(75) API RP 75, Recommended Practice for Development of a Safety and Environmental Management Program for Offshore Operations and Facilities, Third Edition, May 2004, reaffirmed May 2008; incorporated by reference at §§ 250.1900, 250.1902, 250.1903, 250.1909, 250.1920;


(76) API RP 86, API Recommended Practice for Measurement of Multiphase Flow; First Edition, September 2005; incorporated by reference at §§ 250.1202(a) and 250.1203(b);


(77) API RP 90, Annular Casing Pressure Management for Offshore Wells, First Edition, August 2006; incorporated by reference at § 250.519;


(78) API RP 500, Recommended Practice for Classification of Locations for Electrical Installations at Petroleum Facilities Classified as Class I, Division 1 and Division 2, Third Edition, December 2012; Errata January 2014, incorporated by reference at §§ 250.114(a), 250.459, 250.842(a), 250.862(a) and (e), 250.872(a), 250.1628(b) and (d), and 250.1629(b);


(79) API RP 505, Recommended Practice for Classification of Locations for Electrical Installations at Petroleum Facilities Classified as Class I, Zone 0, Zone 1, and Zone 2, First Edition, November 1997; reaffirmed, August 2013; incorporated by reference at §§ 250.114(a), 250.459, 250.842(a), 250.862(a) and (e), 250.872(a), 250.1628(b) and (d), and 250.1629(b);


(80) API RP 2556, Recommended Practice for Correcting Gauge Tables for Incrustation, Second Edition, August 1993; reaffirmed November 2003; incorporated by reference at § 250.1202;


(81) API Spec. 2C, Specification for Offshore Pedestal Mounted Cranes, Sixth Edition, March 2004, Effective Date: September 2004; incorporated by reference at § 250.108;


(82) ANSI/API Spec. 6A, Specification for Wellhead and Christmas Tree Equipment, Twentieth Edition, October 2010; Addendum 1, November 2011; Errata 2, November 2011; Addendum 2, November 2012; Addendum 3, March 2013; Errata 3, June 2013; Errata 4, August 2013; Errata 5, November 2013; Errata 6, March 2014; Errata 7, December 2014; Errata 8, February 2016; Addendum 4, June 2016; Errata 9, June 2016; Errata 10, August 2016; incorporated by reference at §§ 250.730, 250.802(a), 250.803(a), 250.833, 250.873(b), 250.874(g), and 250.1002(b);


(83) API Spec. 6AV1, Specification for Verification Test of Wellhead Surface Safety Valves and Underwater Safety Valves for Offshore Service, Second Edition, February 2013; incorporated by reference at §§ 250.802(a), 250.833, 250.873(b), and 250.874(g);


(84) API STD 6AV2, Installation, Maintenance, and Repair of Surface Safety Valves and Underwater Safety Valves Offshore; First Edition, March 2014; Errata 1, August 2014; incorporated by reference at §§ 250.820, 250.834, 250.836, and 250.880(c)


(85) ANSI/API Spec. 6D, Specification for Pipeline Valves, Twenty-third Edition, April 2008; Effective Date: October 1, 2008, Errata 1, June 2008; Errata 2, November 2008; Errata 3, February 2009; Addendum 1, October 2009; Contains API Monogram Annex as Part of U.S. National Adoption; ISO 14313:2007 (Identical), Petroleum and natural gas industries – Pipeline transportation systems – Pipeline valves; incorporated by reference at § 250.1002(b);


(86) ANSI/API Spec. 11D1, Packers and Bridge Plugs, Second Edition, July 2009; incorporated by reference at §§ 250.518, 250.619, and 250.1703;


(87) ANSI/API Spec. 14A, Specification for Subsurface Safety Valve Equipment, Eleventh Edition, October 2005, reaffirmed, June 2012; incorporated by reference at §§ 250.802 and 250.803(a);


(88) ANSI/API Spec. 16A, Specification for Drill-through Equipment, Third Edition, June 2004, reaffirmed August 2010; incorporated by reference at § 250.730;


(89) ANSI/API Spec. 16C, Specification for Choke and Kill Systems, First Edition, January 1993, reaffirmed July 2010; incorporated by reference at § 250.730;


(90) API Spec. 16D, Specification for Control Systems for Drilling Well Control Equipment and Control Systems for Diverter Equipment, Second Edition, July 2004, reaffirmed August 2013; incorporated by reference at § 250.730;


(91) ANSI/API Spec. 17D, Design and Operation of Subsea Production Systems – Subsea Wellhead and Tree Equipment, Second Edition, May 2011; incorporated by reference at § 250.730;


(92) ANSI/API Spec. 17J, Specification for Unbonded Flexible Pipe, Third Edition, July 2008, incorporated by reference at §§ 250.852(e), 250.1002(b), and 250.1007(a).


(93) ANSI/API Spec. Q1, Specification for Quality Management System Requirements for Manufacturing Organizations for the Petroleum and Natural Gas Industry, Ninth Edition, June 2013; Errata, February 2014; Errata 2, March 2014; Addendum 1, June 2016; incorporated by reference at §§ 250.730 and 250.801(b) and (c);


(94) API Standard 53, Blowout Prevention Equipment Systems for Drilling Wells, Fourth Edition, November 2012, Addendum 1, July 2016, incorporated by reference at §§ 250.730, 250.734, 250.735, 250.736, 250.737, and 250.739;


(95) API Standard 65 – Part 2, Isolating Potential Flow Zones During Well Construction; Second Edition, December 2010; incorporated by reference at §§ 250.415(f) and 250.420(a);


(96) API Standard 2552, USA Standard Method for Measurement and Calibration of Spheres and Spheroids, First Edition, 1966; reaffirmed, October 2007; incorporated by reference at § 250.1202;


(97) API Standard 2555, Method for Liquid Calibration of Tanks, First Edition, September 1966; reaffirmed March 2002; incorporated by reference at § 250.1202;


(f) American Society of Mechanical Engineers (ASME), 22 Law Drive, P.O. Box 2900, Fairfield, NJ 07007-2900; http://www.asme.org; phone: 1-800-843-2763.


(1) 2017 ASME Boiler and Pressure Vessel Code (BPVC), Section I, Rules for Construction of Power Boilers, 2017 Edition, July 1, 2017, incorporated by reference at §§ 250.851(a) and 250.1629(b).


(2) 2017 ASME Boiler and Pressure Vessel Code, Section IV, Rules for Construction of Heating Boilers, 2017 Edition, July 1, 2017, incorporated by reference at §§ 250.851(a) and 250.1629(b).


(3) 2017 ASME Boiler and Pressure Vessel Code, Section VIII, Rules for Construction of Pressure Vessels; Division 1, 2017 Edition; July 1, 2017, incorporated by reference at §§ 250.851(a) and 250.1629(b).


(4) 2017 ASME Boiler and Pressure Vessel Code, Section VIII, Rules for Construction of Pressure Vessels; Division 2: Alternative Rules, 2017 Edition, July 1, 2017, incorporated by reference at §§ 250.851(a) and 250.1629(b).


(5) 2017 ASME Boiler and Pressure Vessel Code, Section VIII, Rules for Construction of Pressure Vessels; Division 3: Alternative Rules for Construction of High Pressure Vessels, 2017 Edition, July 1, 2017, incorporated by reference at §§ 250.851(a) and 250.1629(b).


(g) American Society for Testing and Materials (ASTM), ASTM Standards, 100 Bar Harbor Drive, P.O. Box C700, West Conshohocken, PA 19428-2959; http://www.astm.org; phone: 1-877-909-2786:


(1) ASTM Standard C 33-07, approved December 15, 2007, Standard Specification for Concrete Aggregates; incorporated by reference at § 250.901;


(2) ASTM Standard C 94/C 94M-07, approved January 1, 2007, Standard Specification for Ready-Mixed Concrete; incorporated by reference at § 250.901;


(3) ASTM Standard C 150-07, approved May 1, 2007, Standard Specification for Portland Cement; incorporated by reference at § 250.901;


(4) ASTM Standard C 330-05, approved December 15, 2005, Standard Specification for Lightweight Aggregates for Structural Concrete; incorporated by reference at § 250.901;


(5) ASTM Standard C 595-08, approved January 1, 2008, Standard Specification for Blended Hydraulic Cements; incorporated by reference at § 250.901;


(h) American Welding Society (AWS), AWS Codes, 8669 NW 36 Street, #130, Miami, FL 33126; http://www.aws.org;phone: 800-443-9353:


(1) AWS D1.1:2000, Structural Welding Code – Steel, 17th Edition, October 18, 1999; incorporated by reference at § 250.901;


(2) AWS D1.4-98, Structural Welding Code – Reinforcing Steel, 1998 Edition; incorporated by reference at § 250.901;


(3) AWS D3.6M:1999, Specification for Underwater Welding (1999); incorporated by reference at § 250.901.


(i) National Association of Corrosion Engineers (NACE) International, NACE Standards, Park Ten Place, Houston, TX 77084; http://www.nace.org; phone: 281-228-6200:


(1) NACE Standard MR0175-2003, Standard Material Requirements, Metals for Sulfide Stress Cracking and Stress Corrosion Cracking Resistance in Sour Oilfield Environments, Revised January 17, 2003; incorporated by reference at §§ 250.490 and 250.901;


(2) NACE Standard RP0176-2003, Standard Recommended Practice, Corrosion Control of Steel Fixed Offshore Structures Associated with Petroleum Production; incorporated by reference at § 250.901.


(j) International Organization for Standardization (ISO), 1, ch. de la Voie-Creuse, CP 56, CH-1211, Geneva 20, Switzerland; www.iso.org; phone: 41-22-749-01-11:


(1) ISO/IEC (International Electrotechnical Commission) 17011, Conformity assessment – General requirements for accreditation bodies accrediting conformity assessment bodies, First edition 2004-09-01; Corrected version 2005-02-15; incorporated by reference at §§ 250.1900, 250.1903, 250.1904, and 250.1922.


(2) ISO/IEC 17021-1, Conformity assessment – Requirements for bodies providing audit and certification of management systems – Part 1: Requirements, First Edition, June 2015, incorporated by reference at § 250.730(d).


(3) [Reserved]


(k) Center for Offshore Safety (COS), 1990 Post Oak Blvd., Suite 1370, Houston, TX 77056; www.centerforoffshoresafety.org; phone: 832-495-4925.


(1) COS Safety Publication COS-2-01, Qualification and Competence Requirements for Audit Teams and Auditors Performing Third-party SEMS Audits of Deepwater Operations, First Edition, Effective Date October 2012; incorporated by reference at §§ 250.1900, 250.1903, 250.1904, and 250.1921.


(2) COS Safety Publication COS-2-03, Requirements for Third-party SEMS Auditing and Certification of Deepwater Operations, First Edition, Effective Date October 2012; incorporated by reference at §§ 250.1900, 250.1903, 250.1904, and 250.1920.


(3) COS Safety Publication COS-2-04, Requirements for Accreditation of Audit Service Providers Performing SEMS Audits and Certification of Deepwater Operations, First Edition, Effective Date October 2012; incorporated by reference at §§ 250.1900, 250.1903, 250.1904, and 250.1922.


[84 FR 21969, May 15, 2019, as amended at 85 FR 84236, Dec. 30, 2020]


§ 250.199 Paperwork Reduction Act statements – information collection.

(a) OMB has approved the information collection requirements in part 250 under 44 U.S.C. 3501 et seq. The table in paragraph (e) of this section lists the subpart in the rule requiring the information and its title, provides the OMB control number, and summarizes the reasons for collecting the information and how BSEE uses the information. The associated BSEE forms required by this part are listed at the end of this table with the relevant information.


(b) Respondents are OCS oil, gas, and sulphur lessees and operators. The requirement to respond to the information collections in this part is mandated under the Act (43 U.S.C. 1331 et seq.) and the Act’s Amendments of 1978 (43 U.S.C. 1801 et seq.). Some responses are also required to obtain or retain a benefit or may be voluntary. Proprietary information will be protected under § 250.197, Data and information to be made available to the public or for limited inspection; parts 30 CFR Parts 251, 252; and the Freedom of Information Act (5 U.S.C. 552) and its implementing regulations at 43 CFR part 2.


(c) The Paperwork Reduction Act of 1995 requires us to inform the public that an agency may not conduct or sponsor, and you are not required to respond to, a collection of information unless it displays a currently valid OMB control number.


(d) Send comments regarding any aspect of the collections of information under this part, including suggestions for reducing the burden, to the Information Collection Clearance Officer, Bureau of Safety and Environmental Enforcement, 45600 Woodland Road, Sterling, VA 20166.


(e) BSEE is collecting this information for the reasons given in the following table:


30 CFR Subpart, title and/or BSEE Form (OMB Control No.)
BSEE collects this information and uses it to:
(1) Subpart A, General (1014-0022), including Forms BSEE-0011, iSEE; BSEE-0132, Evacuation Statistics; BSEE-0143, Facility/Equipment Damage Report; BSEE-1832, Notification of Incidents of Noncompliance(i) Determine that activities on the OCS comply with statutory and regulatory requirements; are safe and protect the environment; and result in diligent development and production on OCS leases.
(ii) Support the unproved and proved reserve estimation, resource assessment, and fair market value determinations.
(iii) Assess damage and project any disruption of oil and gas production from the OCS after a major natural occurrence.
(2) Subpart B, Plans and Information (1014-0024)Evaluate Deepwater Operations Plans for compliance with statutory and regulatory requirements
(3) Subpart C, Pollution Prevention and Control (1014-0023)(i) Evaluate measures to prevent unauthorized discharge of pollutants into the offshore waters.
(ii) Ensure action is taken to control pollution.
(4) Subpart D, Oil and Gas and Drilling Operations (1014-0018), including Forms BSEE-0125, End of Operations Report; BSEE-0133, Well Activity Report; and BSEE-0133S, Open Hole Data Report(i) Evaluate the equipment and procedures to be used in drilling operations on the OCS.
(ii) Ensure that drilling operations meet statutory and regulatory requirements.
(5) Subpart E, Oil and Gas Well-Completion Operations (1014-0004)(i) Evaluate the equipment and procedures to be used in well-completion operations on the OCS.
(ii) Ensure that well-completion operations meet statutory and regulatory requirements.
(6) Subpart F, Oil and Gas Well Workover Operations (1014-0001)(i) Evaluate the equipment and procedures to be used during well-workover operations on the OCS.
(ii) Ensure that well-workover operations meet statutory and regulatory requirements.
(7) Subpart G, Blowout Preventer Systems (1014-0028), including Form BSEE-0144, Rig Movement Notification Report(i) Evaluate the equipment and procedures to be used during well drilling, completion, workover, and abandonment operations on the OCS.
(ii) Ensure that well operations meet statutory and regulatory requirements.
(8) Subpart H, Oil and Gas Production Safety Systems (1014-0003)(i) Evaluate the equipment and procedures that will be used during production operations on the OCS.
(ii) Ensure that production operations meet statutory and regulatory requirements.
(9) Subpart I, Platforms and Structures (1014-0011)(i) Evaluate the design, fabrication, and installation of platforms on the OCS.
(ii) Ensure the structural integrity of platforms installed on the OCS.
(10) Subpart J, Pipelines and Pipeline Rights-of-Way (1014-0016), including Form BSEE-0149, Assignment of Federal OCS Pipeline Right-of-Way Grant(i) Evaluate the design, installation, and operation of pipelines on the OCS.
(ii) Ensure that pipeline operations meet statutory and regulatory requirements.
(11) Subpart K, Oil and Gas Production Rates (1014-0019), including Forms BSEE-0126, Well Potential Test Report and BSEE-0128, Semiannual Well Test Report(i) Evaluate production rates for hydrocarbons produced on the OCS.
(ii) Ensure economic maximization of ultimate hydrocarbon recovery.
(12) Subpart L, Oil and Gas Production Measurement, Surface Commingling, and Security (1014-0002)(i) Evaluate the measurement of production, commingling of hydrocarbons, and site security plans.
(ii) Ensure that produced hydrocarbons are measured and commingled to provide for accurate royalty payments and security.
(13) Subpart M, Unitization (1014-0015)(i) Evaluate the unitization of leases.
(ii) Ensure that unitization prevents waste, conserves natural resources, and protects correlative rights.
(14) Subpart N, Remedies and Penalties(The requirements in subpart N are exempt from the Paperwork Reduction Act of 1995 according to 5 CFR 1320.4).
(15) Subpart O, Well Control and Production Safety Training (1014-0008)(i) Evaluate training program curricula for OCS workers, course schedules, and attendance.
(ii) Ensure that training programs are technically accurate and sufficient to meet statutory and regulatory requirements, and that workers are properly trained.
(16) Subpart P, Sulfur Operations (1014-0006)(i) Evaluate sulfur exploration and development operations on the OCS.
(ii) Ensure that OCS sulfur operations meet statutory and regulatory requirements and will result in diligent development and production of sulfur leases.
(17) Subpart Q, Decommissioning Activities (1014-0010)Ensure that decommissioning activities, site clearance, and platform or pipeline removal are properly performed to meet statutory and regulatory requirements and do not conflict with other users of the OCS.
(18) Subpart S, Safety and Environmental Management Systems (1014-0017), including Form BSEE-0131, Performance Measures Data(i) Evaluate operators’ policies and procedures to assure safety and environmental protection while conducting OCS operations (including those operations conducted by contractor and subcontractor personnel).
(ii) Evaluate Performance Measures Data relating to risk and number of accidents, injuries, and oil spills during OCS activities.
(19) Application for Permit to Drill (APD, Revised APD), Form BSEE-0123; and Supplemental APD Information Sheet, Form BSEE-0123S, and all supporting documentation (1014-0025)(i) Evaluate and approve the adequacy of the equipment, materials, and/or procedures that the lessee or operator plans to use during drilling.
(ii) Ensure that applicable OCS operations meet statutory and regulatory requirements.
(20) Application for Permit to Modify (APM), Form BSEE-0124, and supporting documentation (1014-0026)(i) Evaluate and approve the adequacy of the equipment, materials, and/or procedures that the lessee or operator plans to use during drilling and to evaluate well plan modifications and changes in major equipment.
(ii) Ensure that applicable OCS operations meet statutory and regulatory requirements.

[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 26015, Apr. 29, 2016; 81 FR 36149, June 6, 2016]


Subpart B – Plans and Information

General Information

§ 250.200 Definitions.

Acronyms and terms used in this subpart have the following meanings:


(a) Acronyms used frequently in this subpart are listed alphabetically below:


BOEM means Bureau of Ocean Energy Management of the Department of the Interior.


BSEE means Bureau of Safety and Environmental Enforcement of the Department of the Interior.


CID means Conservation Information Document.


CZMA means Coastal Zone Management Act.


DOCD means Development Operations Coordination Document.


DPP means Development and Production Plan.


DWOP means Deepwater Operations Plan.


EIA means Environmental Impact Analysis.


EP means Exploration Plan.


NPDES means National Pollutant Discharge Elimination System.


NTL means Notice to Lessees and Operators.


OCS means Outer Continental Shelf.


(b) Terms used in this subpart are listed alphabetically below:


Amendment means a change you make to an EP, DPP, or DOCD that is pending before BOEM for a decision (see 30 CFR 550.232(d) and 550.267(d)).


Modification means a change required by the Regional Supervisor to an EP, DPP, or DOCD (see 30 CFR 550.233(b)(2) and 550.270(b)(2)) that is pending before BOEM for a decision because the OCS plan is inconsistent with applicable requirements.


New or unusual technology means equipment or procedures that:


(1) Have not been used previously or extensively in a BSEE OCS Region;


(2) Have not been used previously under the anticipated operating conditions; or


(3) Have operating characteristics that are outside the performance parameters established by this part.


Non-conventional production or completion technology includes, but is not limited to, floating production systems, tension leg platforms, spars, floating production, storage, and offloading systems, guyed towers, compliant towers, subsea manifolds, and other subsea production components that rely on a remote site or host facility for utility and well control services.


Offshore vehicle means a vehicle that is capable of being driven on ice.


Resubmitted OCS plan means an EP, DPP, or DOCD that contains changes you make to an OCS plan that BOEM has disapproved (see 30 CFR 550.234(b), 550.272(a), and 550.273(b)).


Revised OCS plan means an EP, DPP, or DOCD that proposes changes to an approved OCS plan, such as those in the location of a well or platform, type of drilling unit, or location of the onshore support base (see 30 CFR 550.283(a)).


Supplemental OCS plan means an EP, DPP, or DOCD that proposes the addition to an approved OCS plan of an activity that requires approval of an application or permit (see 30 CFR 550.283(b)).


§ 250.201 What plans and information must I submit before I conduct any activities on my lease or unit?

(a) Plans and documents. Before you conduct the activities on your lease or unit listed in the following table, you must submit, and BSEE must approve, the listed plans and documents. Your plans and documents may cover one or more leases or units.


You must submit a(n) . . .
Before you . . .
(1) [Reserved]
(2) [Reserved]
(3) [Reserved]
(4) Deepwater Operations Plan (DWOP),Conduct post-drilling installation activities in any water depth associated with a development project that will involve the use of a non-conventional production or completion technology.
(5) [Reserved]
(6) [Reserved]

(b) Submitting additional information. On a case-by-case basis, the Regional Supervisor may require you to submit additional information if the Regional Supervisor determines that it is necessary to evaluate your proposed plan or document.


(c) Limiting information. The Regional Director may limit the amount of information or analyses that you otherwise must provide in your proposed plan or document under this subpart when:


(1) Sufficient applicable information or analysis is readily available to BSEE;


(2) Other coastal or marine resources are not present or affected;


(3) Other factors such as technological advances affect information needs; or


(4) Information is not necessary or required for a State to determine consistency with their CZMA Plan.


(d) Referencing. In preparing your proposed plan or document, you may reference information and data discussed in other plans or documents you previously submitted or that are otherwise readily available to BSEE.


§§ 250.202-250.203 [Reserved]

§ 250.204 How must I protect the rights of the Federal government?

(a) To protect the rights of the Federal government, you must either:


(1) Drill and produce the wells that the Regional Supervisor determines are necessary to protect the Federal government from loss due to production on other leases or units or from adjacent lands under the jurisdiction of other entities (e.g., State and foreign governments); or


(2) Pay a sum that the Regional Supervisor determines as adequate to compensate the Federal government for your failure to drill and produce any well.


(b) Payment under paragraph (a)(2) of this section may constitute production in paying quantities for the purpose of extending the lease term.


(c) You must complete and produce any penetrated hydrocarbon-bearing zone that the Regional Supervisor determines is necessary to conform to sound conservation practices.


§ 250.205 Are there special requirements if my well affects an adjacent property?

For wells that could intersect or drain an adjacent property, the Regional Supervisor may require special measures to protect the rights of the Federal government and objecting lessees or operators of adjacent leases or units.


Post-Approval Requirements for the EP, DPP, and DOCD

§ 250.282 Do I have to conduct post-approval monitoring?

The Regional Supervisor may direct you to conduct monitoring programs. You must retain copies of all monitoring data obtained or derived from your monitoring programs and make them available to BSEE upon request. The Regional Supervisor may require you to:


(a) Monitoring plans. Submit monitoring plans for approval before you begin work; and


(b) Monitoring reports. Prepare and submit reports that summarize and analyze data and information obtained or derived from your monitoring programs. The Regional Supervisor will specify requirements for preparing and submitting these reports.


Deepwater Operations Plan (DWOP)

§ 250.286 What is a DWOP?

(a) A DWOP is a plan that provides sufficient information for BSEE to review a deepwater development project, and any other project that uses non-conventional production or completion technology, from a total system approach. The DWOP does not replace, but supplements other submittals required by the regulations such as BOEM Exploration Plans, Development and Production Plans, and Development Operations Coordination Documents. BSEE will use the information in your DWOP to determine whether the project will be developed in an acceptable manner, particularly with respect to operational safety and environmental protection issues involved with non-conventional production or completion technology.


(b) The DWOP process consists of two parts: a Conceptual Plan and the DWOP. Section 250.289 prescribes what the Conceptual Plan must contain, and § 250.292 prescribes what the DWOP must contain.


§ 250.287 For what development projects must I submit a DWOP?

You must submit a DWOP for each development project in which you will use non-conventional production or completion technology, regardless of water depth. If you are unsure whether BSEE considers the technology of your project non-conventional, you must contact the Regional Supervisor for guidance.


§ 250.288 When and how must I submit the Conceptual Plan?

You must submit four copies, or one hard copy and one electronic version, of the Conceptual Plan to the Regional Director after you have decided on the general concept(s) for development and before you begin engineering design of the well safety control system or subsea production systems to be used after well completion.


§ 250.289 What must the Conceptual Plan contain?

In the Conceptual Plan, you must explain the general design basis and philosophy that you will use to develop the field. You must include the following information:


(a) An overview of the development concept(s);


(b) A well location plat;


(c) The system control type (i.e., direct hydraulic or electro-hydraulic); and


(d) The distance from each of the wells to the host platform.


§ 250.290 What operations require approval of the Conceptual Plan?

You may not complete any production well or install the subsea wellhead and well safety control system (often called the tree) before BSEE has approved the Conceptual Plan.


§ 250.291 When and how must I submit the DWOP?

You must submit four copies, or one hard copy and one electronic version, of the DWOP to the Regional Director after you have substantially completed safety system design and before you begin to procure or fabricate the safety and operational systems (other than the tree), production platforms, pipelines, or other parts of the production system.


§ 250.292 What must the DWOP contain?

You must include the following information in your DWOP:


(a) A description and schematic of the typical wellbore, casing, and completion;


(b) Structural design, fabrication, and installation information for each surface system, including host facilities;


(c) Design, fabrication, and installation information on the mooring systems for each surface system;


(d) Information on any active stationkeeping system(s) involving thrusters or other means of propulsion used with a surface system;


(e) Information concerning the drilling and completion systems;


(f) Design and fabrication information for each riser system (e.g., drilling, workover, production, and injection);


(g) Pipeline information;


(h) Information about the design, fabrication, and operation of an offtake system for transferring produced hydrocarbons to a transport vessel;


(i) Information about subsea wells and associated systems that constitute all or part of a single project development covered by the DWOP;


(j) Flow schematics and Safety Analysis Function Evaluation (SAFE) charts (API RP 14C, subsection 4.3c, incorporated by reference in § 250.198) of the production system from the Surface Controlled Subsurface Safety Valve (SCSSV) downstream to the first item of separation equipment;


(k) A description of the surface/subsea safety system and emergency support systems to include a table that depicts what valves will close, at what times, and for what events or reasons;


(l) A general description of the operating procedures, including a table summarizing the curtailment of production and offloading based on operational considerations;


(m) A description of the facility installation and commissioning procedure;


(n) A discussion of any new technology that affects hydrocarbon recovery systems;


(o) A list of any alternate compliance procedures or departures for which you anticipate requesting approval;


(p) If you propose to use a pipeline free standing hybrid riser (FSHR) on a permanent installation that utilizes a buoyancy air can suspended from the top of the riser, you must provide the following information in your DWOP in the discussions required by paragraphs (f) and (g) of this section:


(1) A detailed description and drawings of the FSHR, buoy, and the associated connection system;


(2) Detailed information regarding the system used to connect the FSHR to the buoyancy air can, and associated redundancies; and


(3) Descriptions of your monitoring system and monitoring plan to monitor the pipeline FSHR and the associated connection system for fatigue, stress, and any other abnormal condition (e.g., corrosion) that may negatively impact the riser system’s integrity.


(q) Payment of the service fee listed in § 250.125.


[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 26017, Apr. 29, 2016; 84 FR 21973, May 15, 2019]


§ 250.293 What operations require approval of the DWOP?

You may not begin production until BSEE approves your DWOP.


§ 250.294 May I combine the Conceptual Plan and the DWOP?

If your development project meets the following criteria, you may submit a combined Conceptual Plan/DWOP on or before the deadline for submitting the Conceptual Plan.


(a) The project is located in water depths of less than 400 meters (1,312 feet); and


(b) The project is similar to projects involving non-conventional production or completion technology for which you have obtained approval previously.


§ 250.295 When must I revise my DWOP?

You must revise either the Conceptual Plan or your DWOP to reflect changes in your development project that materially alter the facilities, equipment, and systems described in your plan. You must submit the revision within 60 days after any material change to the information required for that part of your plan.


Subpart C – Pollution Prevention and Control

§ 250.300 Pollution prevention.

(a) During the exploration, development, production, and transportation of oil and gas or sulphur, the lessee shall take measures to prevent unauthorized discharge of pollutants into the offshore waters. The lessee shall not create conditions that will pose unreasonable risk to public health, life, property, aquatic life, wildlife, recreation, navigation, commercial fishing, or other uses of the ocean.


(1) When pollution occurs as a result of operations conducted by or on behalf of the lessee and the pollution damages or threatens to damage life (including fish and other aquatic life), property, any mineral deposits (in areas leased or not leased), or the marine, coastal, or human environment, the control and removal of the pollution to the satisfaction of the District Manager shall be at the expense of the lessee. Immediate corrective action shall be taken in all cases where pollution has occurred. Corrective action shall be subject to modification when directed by the District Manager.


(2) If the lessee fails to control and remove the pollution, the Director, in cooperation with other appropriate Agencies of Federal, State, and local governments, or in cooperation with the lessee, or both, shall have the right to control and remove the pollution at the lessee’s expense. Such action shall not relieve the lessee of any responsibility provided for by law.


(b)(1) The District Manager may restrict the rate of drilling fluid discharges or prescribe alternative discharge methods. The District Manager may also restrict the use of components that could cause unreasonable degradation to the marine environment. No petroleum-based substances, including diesel fuel, may be added to the drilling mud system without prior approval of the District Manager. For Arctic OCS exploratory drilling, you must capture all petroleum-based mud to prevent its discharge into the marine environment. The Regional Supervisor may also require you to capture, during your Arctic OCS exploratory drilling operations, all water-based mud from operations after completion of the hole for the conductor casing to prevent its discharge into the marine environment, based on various factors including, but not limited to:


(i) The proximity of your exploratory drilling operation to subsistence hunting and fishing locations;


(ii) The extent to which discharged mud may cause marine mammals to alter their migratory patterns in a manner that impedes subsistence users’ access to, or use of, those resources, or increases the risk of injury to subsistence users; or


(iii) The extent to which discharged mud may adversely affect marine mammals, fish, or their habitat.


(2) You must obtain approval from the District Manager of the method you plan to use to dispose of drill cuttings, sand, and other well solids. For Arctic OCS exploratory drilling, you must capture all cuttings from operations that utilize petroleum-based mud to prevent their discharge into the marine environment. The Regional Supervisor may also require you to capture, during your Arctic OCS exploratory drilling operations, all cuttings from operations that utilize water-based mud after completion of the hole for the conductor casing to prevent their discharge into the marine environment, based on various factors including, but not limited to:


(i) The proximity of your exploratory drilling operation to subsistence hunting and fishing locations;


(ii) The extent to which discharged cuttings may cause marine mammals to alter their migratory patterns in a manner that impedes subsistence users’ access to, or use of, those resources, or increases the risk of injury to subsistence users; or


(iii) The extent to which discharged cuttings may adversely affect marine mammals, fish, or their habitat.


(3) All hydrocarbon-handling equipment for testing and production such as separators, tanks, and treaters shall be designed, installed, and operated to prevent pollution. Maintenance or repairs which are necessary to prevent pollution of offshore waters shall be undertaken immediately.


(4) Curbs, gutters, drip pans, and drains shall be installed in deck areas in a manner necessary to collect all contaminants not authorized for discharge. Oil drainage shall be piped to a properly designed, operated, and maintained sump system which will automatically maintain the oil at a level sufficient to prevent discharge of oil into offshore waters. All gravity drains shall be equipped with a water trap or other means to prevent gas in the sump system from escaping through the drains. Sump piles shall not be used as processing devices to treat or skim liquids but may be used to collect treated-produced water, treated-produced sand, or liquids from drip pans and deck drains and as a final trap for hydrocarbon liquids in the event of equipment upsets. Improperly designed, operated, or maintained sump piles which do not prevent the discharge of oil into offshore waters shall be replaced or repaired.


(5) On artificial islands, all vessels containing hydrocarbons shall be placed inside an impervious berm or otherwise protected to contain spills. Drainage shall be directed away from the drilling rig to a sump. Drains and sumps shall be constructed to prevent seepage.


(6) Disposal of equipment, cables, chains, containers, or other materials into offshore waters is prohibited.


(c) Materials, equipment, tools, containers, and other items used in the Outer Continental Shelf (OCS) which are of such shape or configuration that they are likely to snag or damage fishing devices shall be handled and marked as follows:


(1) All loose material, small tools, and other small objects shall be kept in a suitable storage area or a marked container when not in use and in a marked container before transport over offshore waters;


(2) All cable, chain, or wire segments shall be recovered after use and securely stored until suitable disposal is accomplished;


(3) Skid-mounted equipment, portable containers, spools or reels, and drums shall be marked with the owner’s name prior to use or transport over offshore waters; and


(4) All markings must clearly identify the owner and must be durable enough to resist the effects of the environmental conditions to which they may be exposed.


(d) Any of the items described in paragraph (c) of this section that are lost overboard shall be recorded on the facility’s daily operations report, as appropriate, and reported to the District Manager.


[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 46560, July 15, 2016]


§ 250.301 Inspection of facilities.

Drilling and production facilities shall be inspected daily or at intervals approved or prescribed by the District Manager to determine if pollution is occurring. Necessary maintenance or repairs shall be made immediately. Records of such inspections and repairs shall be maintained at the facility or at a nearby manned facility for 2 years.


Subpart D – Oil and Gas Drilling Operations

General Requirements

§ 250.400 General requirements.

Drilling operations must be conducted in a safe manner to protect against harm or damage to life (including fish and other aquatic life), property, natural resources of the Outer Continental Shelf (OCS), including any mineral deposits (in areas leased and not leased), the National security or defense, or the marine, coastal, or human environment. In addition to the requirements of this subpart, you must also follow the applicable requirements of subpart G of this part.


[81 FR 26017, Apr. 29, 2016]


§§ 250.401-250.403 [Reserved]

§ 250.404 What are the requirements for the crown block?

You must have a crown block safety device that prevents the traveling block from striking the crown block. You must check the device for proper operation at least once per week and after each drill-line slipping operation and record the results of this operational check in the driller’s report.


§ 250.405 What are the safety requirements for diesel engines used on a drilling rig?

You must equip each diesel engine with an air intake device to shut down the diesel engine in the event of a runaway.


(a) For a diesel engine that is not continuously manned, you must equip the engine with an automatic shutdown device;


(b) For a diesel engine that is continuously manned, you may equip the engine with either an automatic or remote manual air intake shutdown device;


(c) You do not have to equip a diesel engine with an air intake device if it meets one of the following criteria:


(1) Starts a larger engine;


(2) Powers a firewater pump;


(3) Powers an emergency generator;


(4) Powers a BOP accumulator system;


(5) Provides air supply to divers or confined entry personnel;


(6) Powers temporary equipment on a nonproducing platform;


(7) Powers an escape capsule; or


(8) Powers a portable single-cylinder rig washer.


[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 36149, June 6, 2016]


§ 250.406 [Reserved]

§ 250.407 What tests must I conduct to determine reservoir characteristics?

You must determine the presence, quantity, quality, and reservoir characteristics of oil, gas, sulphur, and water in the formations penetrated by logging, formation sampling, or well testing.


§ 250.408 May I use alternative procedures or equipment during drilling operations?

You may use alternative procedures or equipment during drilling operations after receiving approval from the District Manager. You must identify and discuss your proposed alternative procedures or equipment in your Application for Permit to Drill (APD) (Form BSEE-0123) (see § 250.414(h)). Procedures for obtaining approval are described in § 250.141 of this part.


§ 250.409 May I obtain departures from these drilling requirements?

The District Manager may approve departures from the drilling requirements specified in this subpart. You may apply for a departure from drilling requirements by writing to the District Manager. You should identify and discuss the departure you are requesting in your APD (see § 250.414(h)).


Applying for a Permit To Drill

§ 250.410 How do I obtain approval to drill a well?

You must obtain written approval from the District Manager before you begin drilling any well or before you sidetrack, bypass, or deepen a well. To obtain approval, you must:


(a) Submit the information required by §§ 250.411 through 250.418;


(b) Include the well in your approved Exploration Plan (EP), Development and Production Plan (DPP), or Development Operations Coordination Document (DOCD);


(c) Meet the oil spill financial responsibility requirements for offshore facilities as required by 30 CFR part 553; and


(d) Submit the following to the District Manager:


(1) An original and two complete copies of Form BSEE-0123, Application for Permit to Drill (APD), and Form BSEE-0123S, Supplemental APD Information Sheet;


(2) A separate public information copy of forms BSEE-0123 and BSEE-0123S that meets the requirements of § 250.186; and


(3) Payment of the service fee listed in § 250.125.


§ 250.411 What information must I submit with my application?

In addition to forms BSEE-0123 and BSEE-0123S, you must include the information required in this subpart and subpart G of this part, including the following:


Information that you must include with an APD
Where to find a description
(a) Plat that shows locations of the proposed well,§ 250.412.
(b) Design criteria used for the proposed well,§ 250.413.
(c) Drilling prognosis,§ 250.414.
(d) Casing and cementing programs,§ 250.415.
(e) Diverter systems descriptions,§ 250.416.
(f) BOP system descriptions,§ 250.731.
(g) Requirements for using a MODU, and§ 250.713.
(h) Additional information.§ 250.418.

[81 FR 26017, Apr. 29, 2016]


§ 250.412 What requirements must the location plat meet?

The location plat must:


(a) Have a scale of 1:24,000 (1 inch = 2,000 feet);


(b) Show the surface and subsurface locations of the proposed well and all the wells in the vicinity;


(c) Show the surface and subsurface locations of the proposed well in feet or meters from the block line;


(d) Contain the longitude and latitude coordinates, and either Universal Transverse Mercator grid-system coordinates or state plane coordinates in the Lambert or Transverse Mercator Projection system for the surface and subsurface locations of the proposed well; and


(e) State the units and geodetic datum (including whether the datum is North American Datum 27 or 83) for these coordinates. If the datum was converted, you must state the method used for this conversion, since the various methods may produce different values.


§ 250.413 What must my description of well drilling design criteria address?

Your description of well drilling design criteria must address:


(a) Pore pressures;


(b) Formation fracture gradients, adjusted for water depth;


(c) Potential lost circulation zones;


(d) Drilling fluid weights;


(e) Casing setting depths;


(f) Maximum anticipated surface pressures. For this section, maximum anticipated surface pressures are the pressures that you reasonably expect to be exerted upon a casing string and its related wellhead equipment. In calculating maximum anticipated surface pressures, you must consider: drilling, completion, and producing conditions; drilling fluid densities to be used below various casing strings; fracture gradients of the exposed formations; casing setting depths; total well depth; formation fluid types; safety margins; and other pertinent conditions. You must include the calculations used to determine the pressures for the drilling and the completion phases, including the anticipated surface pressure used for designing the production string;


(g) A single plot containing curves for estimated pore pressures, formation fracture gradients, proposed drilling fluid weights (surface and downhole), planned safe drilling margin, and casing setting depths in true vertical measurements;


(h) A summary report of the shallow hazards site survey that describes the geological and manmade conditions if not previously submitted; and


(i) Permafrost zones, if applicable.


[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 26017, Apr. 29, 2016; 84 FR 21973, May 15, 2019]


§ 250.414 What must my drilling prognosis include?

Your drilling prognosis must include a brief description of the procedures you will follow in drilling the well. This prognosis includes but is not limited to the following:


(a) Projected plans for coring at specified depths;


(b) Projected plans for logging;


(c) Planned safe drilling margin that is between the estimated pore pressure and the lesser of estimated fracture gradients or casing shoe pressure integrity test and that is based on a risk assessment consistent with expected well conditions and operations.


(1) Your safe drilling margin must also include use of equivalent downhole mud weight that is:


(i) Greater than the estimated pore pressure; and


(ii) Except as provided in paragraph (c)(2) of this section, a minimum of 0.5 pound per gallon below the lower of the casing shoe pressure integrity test or the lowest estimated fracture gradient.


(2) In lieu of meeting the criteria in paragraph (c)(1)(ii) of this section, you may use an equivalent downhole mud weight as specified in your APD, provided that you submit adequate documentation (such as risk modeling data, off-set well data, analog data, seismic data) to justify the alternative equivalent downhole mud weight. You may submit such justification in advance of your full APD, and BSEE may consider such justification for approval when submitted. Any such approval will be contingent upon your confirmation in the APD that your plans and the information underlying your approved justification have not changed.


(3) When determining the pore pressure and lowest estimated fracture gradient for a specific interval, you must consider related off-set and analogous well behavior observations, if available.


(d) Estimated depths to the top of significant marker formations;


(e) Estimated depths to significant porous and permeable zones containing fresh water, oil, gas, or abnormally pressured formation fluids;


(f) Estimated depths to major faults;


(g) Estimated depths of permafrost, if applicable;


(h) A list and description of all requests for using alternate procedures or departures from the requirements of this subpart in one place in the APD. You must explain how the alternate procedures afford an equal or greater degree of protection, safety, or performance, or why the departures are requested;


(i) Projected plans for well testing (refer to § 250.460);


(j) The type of wellhead system and liner hanger system to be installed and a descriptive schematic, which includes but is not limited to pressure ratings, dimensions, valves, load shoulders, and locking mechanisms, if applicable; and


(k) Any additional information required by the District Manager needed to clarify or evaluate your drilling prognosis.


[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 26017, Apr. 29, 2016; 84 FR 21973, May 15, 2019]


§ 250.415 What must my casing and cementing programs include?

Your casing and cementing programs must include:


(a) The following well design information:


(1) Hole sizes;


(2) Bit depths (including measured and true vertical depth (TVD));


(3) Casing information, including sizes, weights, grades, collapse and burst values, types of connection, and setting depths (measured and TVD) for all sections of each casing interval; and


(4) Locations of any installed rupture disks (indicate if burst or collapse and rating);


(b) Casing design safety factors for tension, collapse, and burst with the assumptions made to arrive at these values;


(c) Type and amount of cement (in cubic feet) planned for each casing string;


(d) In areas containing permafrost, setting depths for conductor and surface casing based on the anticipated depth of the permafrost. Your program must provide protection from thaw subsidence and freezeback effect, proper anchorage, and well control;


(e) A statement of how you evaluated the best practices included in API RP 65, Recommended Practice for Cementing Shallow Water Flow Zones in Deep Water Wells (as incorporated by reference in § 250.198), if you drill a well in water depths greater than 500 feet and are in either of the following two areas:


(1) An “area with an unknown shallow water flow potential” is a zone or geologic formation where neither the presence nor absence of potential for a shallow water flow has been confirmed.


(2) An “area known to contain a shallow water flow hazard” is a zone or geologic formation for which drilling has confirmed the presence of shallow water flow; and


(f) A written description of how you evaluated the best practices included in API Standard 65 – Part 2, Isolating Potential Flow Zones During Well Construction, Second Edition (as incorporated by reference in § 250.198). Your written description must identify the mechanical barriers and cementing practices you will use for each casing string (reference API Standard 65 – Part 2, Sections 4 and 5).


[76 FR 64462, Oct. 18, 2011, as amended at 77 FR 50891, Aug. 22, 2012; 81 FR 26018, Apr. 29, 2016]


§ 250.416 What must I include in the diverter description?

You must include in the diverter description:


(a) A description of the diverter system and its operating procedures;


(b) A schematic drawing of the diverter system (plan and elevation views) that shows:


(1) The size of the element installed in the diverter housing;


(2) Spool outlet internal diameter(s);


(3) Diverter-line lengths and diameters; burst strengths and radius of curvature at each turn; and


(4) Valve type, size, working pressure rating, and location.


[81 FR 26018, Apr. 29, 2016]


§ 250.417 [Reserved]

§ 250.418 What additional information must I submit with my APD?

You must include the following with the APD:


(a) Rated capacities of the drilling rig and major drilling equipment, if not already on file with the appropriate District office;


(b) A drilling fluids program that includes the minimum quantities of drilling fluids and drilling fluid materials, including weight materials, to be kept at the site;


(c) A proposed directional plot if the well is to be directionally drilled;


(d) A Hydrogen Sulfide Contingency Plan (see § 250.490), if applicable, and not previously submitted;


(e) A welding plan (see §§ 250.109 to 250.113) if not previously submitted;


(f) In areas subject to subfreezing conditions, evidence that the drilling equipment, BOP systems and components, diverter systems, and other associated equipment and materials are suitable for operating under such conditions;


(g) A request for approval, if you plan to wash out or displace cement to facilitate casing removal upon well abandonment. Your request must include a description of how far below the mudline you propose to displace cement and how you will visually monitor returns;


(h) Certification of your casing and cementing program as required in § 250.420(a)(7); and


(i) Such other information as the District Manager may require.


(j) For Arctic OCS exploratory drilling operations, you must provide the information required by § 250.470.


[76 FR 64462, Oct. 18, 2011, as amended at 77 FR 50892, Aug. 22, 2012; 81 FR 26018, Apr. 29, 2016; 81 FR 46561, July 15, 2016]


Casing and Cementing Requirements

§ 250.420 What well casing and cementing requirements must I meet?

You must case and cement all wells. Your casing and cementing programs must meet the applicable requirements of this subpart and of subpart G of this part.


(a) Casing and cementing program requirements. Your casing and cementing programs must:


(1) Properly control formation pressures and fluids;


(2) Prevent the direct or indirect release of fluids from any stratum through the wellbore into offshore waters;


(3) Prevent communication between separate hydrocarbon-bearing strata;


(4) Protect freshwater aquifers from contamination;


(5) Support unconsolidated sediments;


(6) Provide adequate centralization consistent with the guidelines of API Standard 65 – Part 2 (as incorporated by reference in § 250.198); and


(7)(i) Include a certification signed by a registered professional engineer that the casing and cementing design is appropriate for the purpose for which it is intended under expected wellbore conditions, and is sufficient to satisfy the tests and requirements of this section and § 250.423. Submit this certification with your APD (Form BSEE-0123).


(ii) You must have the registered professional engineer involved in the casing and cementing design process.


(iii) The registered professional engineer must be registered in a state of the United States and have sufficient expertise and experience to perform the certification.


(b) Casing requirements. (1) You must design casing (including liners) to withstand the anticipated stresses imposed by tensile, compressive, and buckling loads; burst and collapse pressures; thermal effects; and combinations thereof.


(2) The casing design must include safety measures that ensure well control during drilling and safe operations during the life of the well.


(3) On all wells that use subsea BOP stacks, you must include two independent barriers, including one mechanical barrier, in each annular flow path (examples of barriers include, but are not limited to, primary cement job and seal assembly). For the final casing string (or liner if it is your final string), you must install one mechanical barrier in addition to cement to prevent flow in the event of a failure in the cement. A dual float valve, by itself, is not considered a mechanical barrier. These barriers cannot be modified prior to or during completion or abandonment operations. The BSEE District Manager may approve alternative options under § 250.141. You must submit documentation of this installation to BSEE in the End-of-Operations Report (Form BSEE-0125).


(4) If you need to substitute a different size, grade, or weight of casing than what was approved in your APD, you must contact the District Manager for approval prior to installing the casing.


(c) Cementing requirements. (1) You must design and conduct your cementing jobs so that cement composition, placement techniques, and waiting times ensure that the cement placed behind the bottom 500 feet of casing attains a minimum compressive strength of 500 psi before drilling out the casing or before commencing completion operations. (If a liner is used refer to § 250.421(f)).


(2) You must use a weighted fluid during displacement to maintain an overbalanced hydrostatic pressure during the cement setting time, except when cementing casings or liners in riserless hole sections.


[76 FR 64462, Oct. 18, 2011, as amended at 77 FR 50892, Aug. 22, 2012; 81 FR 26018, Apr. 29, 2016; 84 FR 21973, May 15, 2019]


§ 250.421 What are the casing and cementing requirements by type of casing string?

The table in this section identifies specific design, setting, and cementing requirements for casing strings and liners. For the purposes of subpart D, the casing strings in order of normal installation are as follows: drive or structural, conductor, surface, intermediate, and production casings (including liners). The District Manager may approve or prescribe other casing and cementing requirements where appropriate.


Casing type
Casing requirements
Cementing requirements
(a) Drive or StructuralSet by driving, jetting, or drilling to the minimum depth as approved or prescribed by the District ManagerIf you drilled a portion of this hole, you must use enough cement to fill the annular space back to the mudline.
(b) ConductorDesign casing and select setting depths based on relevant engineering and geologic factors. These factors include the presence or absence of hydrocarbons, potential hazards, and water depths

Set casing immediately before drilling into formations known to contain oil or gas. If you encounter oil or gas or unexpected formation pressure before the planned casing point, you must set casing immediately and set it above the encountered zone
Use enough cement to fill the calculated annular space back to the mudline.

Verify annular fill by observing cement returns. If you cannot observe cement returns, use additional cement to ensure fill-back to the mudline.

For drilling on an artificial island or when using a well cellar, you must discuss the cement fill level with the District Manager.
(c) SurfaceDesign casing and select setting depths based on relevant engineering and geologic factors. These factors include the presence or absence of hydrocarbons, potential hazards, and water depthsUse enough cement to fill the calculated annular space to at least 200 feet measured depth (MD) inside the conductor casing.

When geologic conditions such as near-surface fractures and faulting exist, you must use enough cement to fill the calculated annular space to the mudline.
(d) IntermediateDesign casing and select setting depth based on anticipated or encountered geologic characteristics or wellbore conditionsUse enough cement to cover and isolate all hydrocarbon-bearing zones and isolate abnormal pressure intervals from normal pressure intervals in the well.

As a minimum, you must cement the annular space 500 feet MD above the casing shoe and 500 feet MD above each zone to be isolated.
(e) ProductionDesign casing and select setting depth based on anticipated or encountered geologic characteristics or wellbore conditionsUse enough cement to cover or isolate all hydrocarbon-bearing zones above the shoe.

As a minimum, you must cement the annular space at least 500 feet MD above the casing shoe and 500 feet MD above the uppermost hydrocarbon-bearing zone.
(f) LinersIf you use a liner as surface casing, you must set the top of the liner at least 200 feet MD above the previous casing/liner shoe.

If you use a liner as an intermediate string below a surface string or production casing below an intermediate string, you must set the top of the liner at least 100 feet MD above the previous casing shoe.

You may not use a liner as conductor casing.

A subsea well casing string whose top is above the mudline and that has been cemented back to the mudline will not be considered a liner.
Same as cementing requirements for specific casing types. For example, a liner used as intermediate casing must be cemented according to the cementing requirements for intermediate casing.


[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 26018, Apr. 29, 2016; 84 FR 21974, May 15, 2019]


§ 250.422 When may I resume drilling after cementing?

(a) After cementing surface, intermediate, or production casing (or liners), you may resume drilling after the cement has been held under pressure for 12 hours. For conductor casing, you may resume drilling after the cement has been held under pressure for 8 hours. One acceptable method of holding cement under pressure is to use float valves to hold the cement in place.


(b) If you plan to nipple down your diverter or BOP stack during the 8- or 12-hour waiting time, you must determine, before nippling down, when it will be safe to do so. You must base your determination on a knowledge of formation conditions, cement composition, effects of nippling down, presence of potential drilling hazards, well conditions during drilling, cementing, and post cementing, as well as past experience.


§ 250.423 What are the requirements for casing and liner installation?

You must ensure proper installation of casing in the subsea wellhead or liner in the liner hanger.


(a) You must ensure that the latching mechanisms or lock down mechanisms are engaged upon successfully installing the casing string.


(b) If you run a liner that has a latching mechanism or lock down mechanism, you must ensure that the latching mechanisms or lock down mechanisms are engaged upon successfully installing the liner.


(c) You must perform a pressure test on the casing seal assembly to ensure proper installation of casing or liner. You must perform this test for the intermediate and production casing strings or liners.


(1) You must submit for approval with your APD, test procedures and criteria for a successful test.


(2) You must document all your test results and make them available to BSEE upon request.


[81 FR 26019, Apr. 29, 2016, as amended at 84 FR 21974, May 15, 2019]


§§ 250.424-250.426 [Reserved]

§ 250.427 What are the requirements for pressure integrity tests?

You must conduct a pressure integrity test below the surface casing or liner and all intermediate casings or liners. The District Manager may require you to run a pressure-integrity test at the conductor casing shoe if warranted by local geologic conditions or the planned casing setting depth. You must conduct each pressure integrity test after drilling at least 10 feet but no more than 50 feet of new hole below the casing shoe. You must test to either the formation leak-off pressure or to an equivalent drilling fluid weight if identified in an approved APD.


(a) You must use the pressure integrity test and related hole-behavior observations, such as pore-pressure test results, gas-cut drilling fluid, and well kicks to adjust the drilling fluid program and the setting depth of the next casing string. You must record all test results and hole-behavior observations made during the course of drilling related to formation integrity and pore pressure in the driller’s report.


(b) While drilling, you must maintain the safe drilling margin identified in § 250.414. When you cannot maintain the safe drilling margin, you must:


(1) Suspend drilling operations and submit proposed remedial actions to the District Manager. The District Manager must review and approve your proposed remedial actions, which may include limited drilling through a lost circulation zone; or


(2) Notify the District Manager and take further action in accordance with API Bulletin 92L (as incorporated by reference in § 250.198), if appropriate. You must submit a revised permit documenting any responsive actions taken.


[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 26019, Apr. 29, 2016; 84 FR 21974, May 15, 2019]


§ 250.428 What must I do in certain cementing and casing situations?

The table in this section describes actions that lessees must take when certain situations occur during casing and cementing activities.


If you encounter the following situation:
Then you must . . .
(a) Have unexpected formation pressures or conditions that warrant revising your casing design,Submit a revised casing program to the District Manager for approval.
(b) Need to change casing setting depths or hole interval drilling depth (for a BHA with an under-reamer, this means bit depth) more than 100 feet true vertical depth (TVD) from the approved APD due to conditions encountered during drilling operations,Submit those changes to the District Manager for approval and include a certification by a professional engineer (PE) that he or she reviewed and approved the proposed changes.
(c) Have indication of inadequate cement job (such as unplanned lost returns, no cement returns to mudline or expected height, cement channeling, or failure of equipment),(1) Locate the top of cement by:

(i) Running a temperature survey;

(ii) Running a cement evaluation log;

(iii) Using tracers in the cement and logging them prior to drill out; or

(iv) Using a combination of these techniques.

(2) Determine if your cement job is inadequate. If your cement job is determined to be inadequate, refer to paragraph (d) of this section.

(3) If your cement job is determined to be adequate, report the results to the District Manager in your submitted WAR.
(d) Inadequate cement job,Comply with § 250.428(c)(1) and take remedial actions. The District Manager must review and approve all remedial actions either through a previously approved contingency plan within the permit or remedial actions included in a revised permit before you may take them, unless immediate actions must be taken to ensure the safety of the crew or to prevent a well-control event. If you complete any immediate action to ensure the safety of the crew or to prevent a well-control event, submit a description of the action to the District Manager when that action is complete. Any changes to the well program, that are not included in the approved permit, will require submittal of a certification by a professional engineer (PE) certifying that they have reviewed and approved the proposed changes. You must also meet any other requirements of the District Manager for remedial actions.

(e) Primary cement job that did not isolate abnormal pressure intervals,Isolate those intervals from normal pressures by squeeze cementing before you complete; suspend operations; or abandon the well, whichever occurs first.
(f) Decide to produce a well that was not originally contemplated for production,Have at least two cemented casing strings (does not include liners) in the well. Note: All producing wells must have at least two cemented casing strings.
(g) Want to drill a well without setting conductor casing,Submit geologic data and information to the District Manager that demonstrates the absence of shallow hydrocarbons or hazards. This information must include logging and drilling fluid-monitoring from wells previously drilled within 500 feet of the proposed well path down to the next casing point.
(h) Need to use less than required cement for the surface casing during floating drilling operations to provide protection from burst and collapse pressures,Submit information to the District Manager that demonstrates the use of less cement is necessary.
(i) Cement across a permafrost zone,Use cement that sets before it freezes and has a low heat of hydration.
(j) Leave the annulus opposite a permafrost zone uncemented,Fill the annulus with a liquid that has a freezing point below the minimum permafrost temperature and minimizes opposite a corrosion.
(k) Plan to use a valve(s) on the drive pipe during cementing operations for the conductor casing, surface casing, or liner,Include a description of the plan in your APD. Your description must include a schematic of the valve and height above the water line. The valve must be remotely operated and full opening with visual observation while taking returns. The person in charge of observing returns must be in communication with the drill floor. You must record in your daily report and in the WAR if cement returns were observed. If cement returns are not observed, you must contact the District Manager and obtain approval of proposed plans to locate the top of cement before continuing with operations.

[76 FR 64462, Oct. 18, 2011, as amended at 77 FR 50892, Aug. 22, 2012; 81 FR 26019, Apr. 29, 2016; 84 FR 21974, May 15, 2019]


Diverter System Requirements

§ 250.430 When must I install a diverter system?

You must install a diverter system before you drill a conductor or surface hole. The diverter system consists of a diverter sealing element, diverter lines, and control systems. You must design, install, use, maintain, and test the diverter system to ensure proper diversion of gases, water, drilling fluid, and other materials away from facilities and personnel.


§ 250.431 What are the diverter design and installation requirements?

You must design and install your diverter system to:


(a) Use diverter spool outlets and diverter lines that have a nominal diameter of at least 10 inches for surface wellhead configurations and at least 12 inches for floating drilling operations;


(b) Use dual diverter lines arranged to provide for downwind diversion capability;


(c) Use at least two diverter control stations. One station must be on the drilling floor. The other station must be in a readily accessible location away from the drilling floor;


(d) Use only remote-controlled valves in the diverter lines. All valves in the diverter system must be full-opening. You may not install manual or butterfly valves in any part of the diverter system;


(e) Minimize the number of turns (only one 90-degree turn allowed for each line for bottom-founded drilling units) in the diverter lines, maximize the radius of curvature of turns, and target all right angles and sharp turns;


(f) Anchor and support the entire diverter system to prevent whipping and vibration; and


(g) Protect all diverter-control instruments and lines from possible damage by thrown or falling objects.


§ 250.432 How do I obtain a departure to diverter design and installation requirements?

The table below describes possible departures from the diverter requirements and the conditions required for each departure. To obtain one of these departures, you must have discussed the departure in your APD and received approval from the District Manager.


If you want a departure to:
Then you must . . .
(a) Use flexible hose for diverter lines instead of rigid pipe,Use flexible hose that has integral end couplings.
(b) Use only one spool outlet for your diverter system,(1) Have branch lines that meet the minimum internal diameter requirements; and (2) Provide downwind diversion capability.
(c) Use a spool with an outlet with an internal diameter of less than 10 inches on a surface wellhead,Use a spool that has dual outlets with an internal diameter of at least 8 inches.
(d) Use a single diverter line for floating drilling operations on a dynamically positioned drillship,Maintain an appropriate vessel heading to provide for downwind diversion.

§ 250.433 What are the diverter actuation and testing requirements?

When you install the diverter system, you must actuate the diverter sealing element, diverter valves, and diverter-control systems and control stations. You must also flow-test the vent lines.


(a) For drilling operations with a surface wellhead configuration, you must actuate the diverter system at least once every 24-hour period after the initial test. After you have nippled up on conductor casing, you must pressure-test the diverter-sealing element and diverter valves to a minimum of 200 psi. While the diverter is installed, you must conduct subsequent pressure tests within 7 days after the previous test.


(b) For floating drilling operations with a subsea BOP stack, you must actuate the diverter system within 7 days after the previous actuation. For subsequent testing, you may partially actuate the diverter element and a flow test is not required.


(c) You must alternate actuations and tests between control stations.


[76 FR 64462, Oct. 18, 2011, as amended at 84 FR 21975, May 15, 2019]


§ 250.434 What are the recordkeeping requirements for diverter actuations and tests?

You must record the time, date, and results of all diverter actuations and tests in the driller’s report. In addition, you must:


(a) Record the diverter pressure test on a pressure chart;


(b) Require your onsite representative to sign and date the pressure test chart;


(c) Identify the control station used during the test or actuation;


(d) Identify problems or irregularities observed during the testing or actuations and record actions taken to remedy the problems or irregularities; and


(e) Retain all pressure charts and reports pertaining to the diverter tests and actuations at the facility for the duration of drilling the well.


§§ 250.440-250.451 [Reserved]

§ 250.452 What are the real-time monitoring requirements for Arctic OCS exploratory drilling operations?

(a) When conducting exploratory drilling operations on the Arctic OCS, you must gather and monitor real-time data using an independent, automatic, and continuous monitoring system capable of recording, storing, and transmitting data regarding the following:


(1) The BOP control system;


(2) The well’s fluid handling systems on the rig; and


(3) The well’s downhole conditions as monitored by a downhole sensing system, when such a system is installed.


(b) During well operations, you must transmit the data identified in paragraph (a) of this section as they are gathered, barring unforeseeable or unpreventable interruptions in transmission, and have the capability to monitor the data onshore, using qualified personnel. Onshore personnel who monitor real-time data must have the capability to contact rig personnel during operations. After well operations, you must store the data at a designated location for recordkeeping purposes as required in §§ 250.740 and 250.741. You must provide BSEE with access to your real-time monitoring data onshore upon request.


[81 FR 46561, July 15, 2016]


Drilling Fluid Requirements

§ 250.455 What are the general requirements for a drilling fluid program?

You must design and implement your drilling fluid program to prevent the loss of well control. This program must address drilling fluid safe practices, testing and monitoring equipment, drilling fluid quantities, and drilling fluid-handling areas.


§ 250.456 What safe practices must the drilling fluid program follow?

Your drilling fluid program must include the following safe practices:


(a) Before starting out of the hole with drill pipe, you must properly condition the drilling fluid. You must circulate a volume of drilling fluid equal to the annular volume with the drill pipe just off-bottom. You may omit this practice if documentation in the driller’s report shows:


(1) No indication of formation fluid influx before starting to pull the drill pipe from the hole;


(2) The weight of returning drilling fluid is within 0.2 pounds per gallon (1.5 pounds per cubic foot) of the drilling fluid entering the hole; and


(3) Other drilling fluid properties are within the limits established by the program approved in the APD.


(b) Record each time you circulate drilling fluid in the hole in the driller’s report;


(c) When coming out of the hole with drill pipe, you must fill the annulus with drilling fluid before the hydrostatic pressure decreases by 75 psi, or every five stands of drill pipe, whichever gives a lower decrease in hydrostatic pressure. You must calculate the number of stands of drill pipe and drill collars that you may pull before you must fill the hole. You must also calculate the equivalent drilling fluid volume needed to fill the hole. Both sets of numbers must be posted near the driller’s station. You must use a mechanical, volumetric, or electronic device to measure the drilling fluid required to fill the hole;


(d) You must run and pull drill pipe and downhole tools at controlled rates so you do not swab or surge the well;


(e) When there is an indication of swabbing or influx of formation fluids, you must take appropriate measures to control the well. You must circulate and condition the well, on or near-bottom, unless well or drilling-fluid conditions prevent running the drill pipe back to the bottom;


(f) You must calculate and post near the driller’s console the maximum pressures that you may safely contain under a shut-in BOP for each casing string. The pressures posted must consider the surface pressure at which the formation at the shoe would break down, the rated working pressure of the BOP stack, and 70 percent of casing burst (or casing test as approved by the District Manager). As a minimum, you must post the following two pressures:


(1) The surface pressure at which the shoe would break down. This calculation must consider the current drilling fluid weight in the hole; and


(2) The lesser of the BOP’s rated working pressure or 70 percent of casing-burst pressure (or casing test otherwise approved by the District Manager);


(g) You must install an operable drilling fluid-gas separator and degasser before you begin drilling operations. You must maintain this equipment throughout the drilling of the well;


(h) Before pulling drill-stem test tools from the hole, you must circulate or reverse-circulate the test fluids in the hole. If circulating out test fluids is not feasible, you may bullhead test fluids out of the drill-stem test string and tools with an appropriate kill weight fluid;


(i) When circulating, you must test the drilling fluid at least once each tour, or more frequently if conditions warrant. Your tests must conform to industry-accepted practices and include density, viscosity, and gel strength; hydrogenion concentration; filtration; and any other tests the District Manager requires for monitoring and maintaining drilling fluid quality, prevention of downhole equipment problems and for kick detection. You must record the results of these tests in the drilling fluid report; and


(j) In areas where permafrost and/or hydrate zones are present or may be present, you must control drilling fluid temperatures to drill safely through those zones.


[76 FR 64462, Oct. 18, 2011, as amended at 77 FR 50894, Aug. 22, 2012; 81 FR 26020, Apr. 29, 2016]


§ 250.457 What equipment is required to monitor drilling fluids?

Once you establish drilling fluid returns, you must install and maintain the following drilling fluid-system monitoring equipment throughout subsequent drilling operations. This equipment must have the following indicators on the rig floor:


(a) Pit level indicator to determine drilling fluid-pit volume gains and losses. This indicator must include both a visual and an audible warning device;


(b) Volume measuring device to accurately determine drilling fluid volumes required to fill the hole on trips;


(c) Return indicator devices that indicate the relationship between drilling fluid-return flow rate and pump discharge rate. This indicator must include both a visual and an audible warning device; and


(d) Gas-detecting equipment to monitor the drilling fluid returns. The indicator may be located in the drilling fluid-logging compartment or on the rig floor. If the indicators are only in the logging compartment, you must continually man the equipment and have a means of immediate communication with the rig floor. If the indicators are on the rig floor only, you must install an audible alarm.


§ 250.458 What quantities of drilling fluids are required?

(a) You must use, maintain, and replenish quantities of drilling fluid and drilling fluid materials at the drill site as necessary to ensure well control. You must determine those quantities based on known or anticipated drilling conditions, rig storage capacity, weather conditions, and estimated time for delivery.


(b) You must record the daily inventories of drilling fluid and drilling fluid materials, including weight materials and additives in the drilling fluid report.


(c) If you do not have sufficient quantities of drilling fluid and drilling fluid material to maintain well control, you must suspend drilling operations.


§ 250.459 What are the safety requirements for drilling fluid-handling areas?

You must classify drilling fluid-handling areas according to API RP 500, Recommended Practice for Classification of Locations for Electrical Installations at Petroleum Facilities, Classified as Class I, Division 1 and Division 2 (as incorporated by reference in § 250.198); or API RP 505, Recommended Practice for Classification of Locations for Electrical Installations at Petroleum Facilities, Classified as Class 1, Zone 0, Zone 1, and Zone 2 (as incorporated by reference in § 250.198). In areas where dangerous concentrations of combustible gas may accumulate, you must install and maintain a ventilation system and gas monitors. Drilling fluid-handling areas must have the following safety equipment:


(a) A ventilation system capable of replacing the air once every 5 minutes or 1.0 cubic feet of air-volume flow per minute, per square foot of area, whichever is greater. In addition:


(1) If natural means provide adequate ventilation, then a mechanical ventilation system is not necessary;


(2) If a mechanical system does not run continuously, then it must activate when gas detectors indicate the presence of 1 percent or more of combustible gas by volume; and


(3) If discharges from a mechanical ventilation system may be hazardous, then you must maintain the drilling fluid-handling area at a negative pressure. You must protect the negative pressure area by using at least one of the following: a pressure-sensitive alarm, open-door alarms on each access to the area, automatic door-closing devices, air locks, or other devices approved by the District Manager;


(b) Gas detectors and alarms except in open areas where adequate ventilation is provided by natural means. You must test and recalibrate gas detectors quarterly. No more than 90 days may elapse between tests;


(c) Explosion-proof or pressurized electrical equipment to prevent the ignition of explosive gases. Where you use air for pressuring equipment, you must locate the air intake outside of and as far as practicable from hazardous areas; and


(d) Alarms that activate when the mechanical ventilation system fails.


Other Drilling Requirements

§ 250.460 What are the requirements for conducting a well test?

(a) If you intend to conduct a well test, you must include your projected plans for the test with your APD (form BSEE-0123) or in an Application for Permit to Modify (APM) (form BSEE-0124). Your plans must include at least the following information:


(1) Estimated flowing and shut-in tubing pressures;


(2) Estimated flow rates and cumulative volumes;


(3) Time duration of flow, buildup, and drawdown periods;


(4) Description and rating of surface and subsurface test equipment;


(5) Schematic drawing, showing the layout of test equipment;


(6) Description of safety equipment, including gas detectors and fire-fighting equipment;


(7) Proposed methods to handle or transport produced fluids; and


(8) Description of the test procedures.


(b) You must give the District Manager at least 24-hours notice before starting a well test.


§ 250.461 What are the requirements for directional and inclination surveys?

For this subpart, BSEE classifies a well as vertical if the calculated average of inclination readings does not exceed 3 degrees from the vertical.


(a) Survey requirements for a vertical well. (1) You must conduct inclination surveys on each vertical well and record the results. Survey intervals may not exceed 1,000 feet during the normal course of drilling;


(2) You must also conduct a directional survey that provides both inclination and azimuth, and digitally record the results in electronic format:


(i) Within 500 feet of setting surface or intermediate casing;


(ii) Within 500 feet of setting any liner; and


(iii) When you reach total depth.


(b) Survey requirements for a directional well. You must conduct directional surveys on each directional well and digitally record the results. Surveys must give both inclination and azimuth at intervals not to exceed 500 feet during the normal course of drilling. Intervals during angle-changing portions of the hole may not exceed 180 feet.


(c) Measurement while drilling. You may use measurement-while-drilling technology if it meets the requirements of this section.


(d) Composite survey requirements. (1) Your composite directional survey must show the interval from the bottom of the conductor casing to total depth. In the absence of conductor casing, the survey must show the interval from the bottom of the drive or structural casing to total depth; and


(2) You must correct all surveys to Universal-Transverse-Mercator-Grid-north or Lambert-Grid-north after making the magnetic-to-true-north correction. Surveys must show the magnetic and grid corrections used and include a listing of the directionally computed inclinations and azimuths.


(e) If you drill within 500 feet of an adjacent lease, the Regional Supervisor may require you to furnish a copy of the well’s directional survey to the affected leaseholder. This could occur when the adjoining leaseholder requests a copy of the survey for the protection of correlative rights.


[76 FR 64462, Oct. 18, 2011, as amended at 84 FR 21975, May 15, 2019]


§ 250.462 What are the source control, containment, and collocated equipment requirements?

For drilling operations using a subsea BOP or surface BOP on a floating facility, you must have the ability to control or contain a blowout event at the sea floor.


(a) To determine your required source control and containment capabilities you must do the following:


(1) Consider a scenario of the wellbore fully evacuated to reservoir fluids, with no restrictions in the well.


(2) Evaluate the performance of the well as designed to determine if a full shut-in can be achieved without having reservoir fluids broach to the sea floor. If your evaluation indicates that the well can only be partially shut-in, then you must determine your ability to flow and capture the residual fluids to a surface production and storage system.


(b) You must have access to and the ability to deploy Source Control and Containment Equipment (SCCE) and all other necessary supporting and collocated equipment to regain control of the well. SCCE means the capping stack, cap-and-flow system, containment dome, and/or other subsea and surface devices, equipment, and vessels, which have the collective purpose to control a spill source and stop the flow of fluids into the environment or to contain fluids escaping into the environment based on the determinations outlined in paragraph (a) of this section. This SCCE, supporting equipment, and collocated equipment may include, but is not limited to, the following:


(1) Subsea containment and capture equipment, including containment domes and capping stacks;


(2) Subsea utility equipment including hydraulic power sources and hydrate control equipment;


(3) Collocated equipment including dispersant injection equipment;


(4) Riser systems;


(5) Remotely operated vehicles (ROVs);


(6) Capture vessels;


(7) Support vessels; and


(8) Storage facilities.


(c) You must submit a description of your source control and containment capabilities to the Regional Supervisor and receive approval before BSEE will approve your APD, Form BSEE-0123. The description of your containment capabilities must contain the following:


(1) Your source control and containment capabilities for controlling and containing a blowout event at the seafloor;


(2) A discussion of the determination required in paragraph (a) of this section; and


(3) Information showing that you have access to and the ability to deploy all equipment required by paragraph (b) of this section.


(d) You must contact the District Manager and Regional Supervisor for reevaluation of your source control and containment capabilities if your:


(1) Well design changes; or


(2) Approved source control and containment equipment is out of service.


(e) You must maintain, test, and inspect the source control, containment, and collocated equipment identified in the following table according to these requirements:


Equipment
Requirements, you must:
Additional information
(1) Capping stacks,(i) Function test all pressure containing critical components on a quarterly frequency (not to exceed 104 days between tests),Pressure containing critical components are those components that will experience wellbore pressure during a shut-in after being functioned.
(ii) Pressure test pressure containing critical components on a bi-annual basis, but not later than 210 days from the last pressure test. All pressure testing must be witnessed by BSEE (if available) and an independent third party.Pressure containing critical components are those components that will experience wellbore pressure during a shut-in. These components include, but are not limited to: All blind rams, wellhead connectors, and outlet valves.
(iii) Notify BSEE at least 21 days prior to commencing any pressure testing
(2) Production safety systems used for flow and capture operations,
(i) Meet or exceed the requirements set forth in Subpart H, excluding required equipment that would be installed below the wellhead or that is not applicable to the cap and flow system.
(ii) Have all equipment unique to containment operations available for inspection at all times
(3) Subsea utility equipment,Have all equipment utilized solely for containment operations available for inspection at all timesSubsea utility equipment includes, but is not limited to: Hydraulic power sources, debris removal, and hydrate control equipment.
(4) Collocated equipment designated by the operator in the Regional Containment Demonstration (RCD) or Well Containment Plan (WCP),Have equipment available for inspection at all timesCollocated equipment includes, but is not limited to, dispersant injection equipment and other subsea control equipment.

[81 FR 26020, Apr. 29, 2016, as amended at 84 FR 21975, May 15, 2019]


§ 250.463 Who establishes field drilling rules?

(a) The District Manager may establish field drilling rules different from the requirements of this subpart when geological and engineering information shows that specific operating requirements are appropriate. You must comply with field drilling rules and nonconflicting requirements of this subpart. The District Manager may amend or cancel field drilling rules at any time.


(b) You may request the District Manager to establish, amend, or cancel field drilling rules.


Applying for a Permit To Modify and Well Records

§ 250.465 When must I submit an Application for Permit to Modify (APM) or an End of Operations Report to BSEE?

(a) You must submit an APM (form BSEE-0124) or an End of Operations Report (form BSEE-0125) and other materials to the Regional Supervisor as shown in the following table. You must also submit a public information copy of each form.


When you . . .
Then you must . . .
And . . .
(1) Intend to revise your drilling plan, change major drilling equipment, or plugback,Submit form BSEE-0124 or request oral approval,Receive written or oral approval from the District Manager before you begin the intended operation. If you get an approval, you must submit form BSEE-0124 no later than the end of the 3rd business day following the oral approval. In all cases, or you must meet the additional requirements in paragraph (b) of this section.
(2) Determine a well’s final surface location, water depth, and the rotary kelly bushing elevation,Immediately Submit a form BSEE-0124,Submit a plat certified by a registered land surveyor that meets the requirements of § 250.412.
(3) Move a drilling unit from a wellbore before completing a well,Submit forms BSEE-0124 and BSEE-0125 within 30 days after the suspension of wellbore operations,Submit appropriate copies of the well records.

(b) If you intend to perform any of the actions specified in paragraph (a)(1) of this section, you must meet the following additional requirements:


(1) Your APM (Form BSEE-0124) must contain a detailed statement of the proposed work that would materially change from the approved APD. The submission of your APM must be accompanied by payment of the service fee listed in § 250.125;


(2) Your form BSEE-0124 must include the present status of the well, depth of all casing strings set to date, well depth, present production zones and productive capability, and all other information specified; and


(3) Within 30 days after completing this work, you must submit an End of Operations Report (EOR), Form BSEE-0125, as required under § 250.744.


[76 FR 64462, Oct. 18, 2011, as amended at 81 FR 26021, Apr. 29, 2016]


§§ 250.466-250.469 [Reserved]

Additional Arctic OCS Requirements


Source:81 FR 46561, July 15, 2016, unless otherwise noted.

§ 250.470 What additional information must I submit with my APD for Arctic OCS exploratory drilling operations?

In addition to complying with all other applicable requirements included in this part, you must provide with your APD all of the following information pertaining to your proposed Arctic OCS exploratory drilling:


(a) A detailed description of:


(1) The environmental, meteorological, and oceanic conditions you expect to encounter at the well site(s);


(2) How you will prepare your equipment, materials, and drilling unit for service in the conditions identified in paragraph (a)(1) of this section, and how your drilling unit will be in compliance with the requirements of § 250.713.


(b) A detailed description of all operations necessary in Arctic OCS conditions to transition the rig from being under way to conducting drilling operations and from ending drilling operations to being under way, as well as any anticipated repair and maintenance plans for the drilling unit and equipment. You should include, among other things, a description of how you plan to:


(1) Recover the subsea equipment, including the marine riser and the lower marine riser package;


(2) Recover the BOP;


(3) Recover the auxiliary sub-sea controls and template;


(4) Lay down the drill pipe and secure the drill pipe and marine riser;


(5) Secure the drilling equipment;


(6) Transfer the fluids for transport or disposal;


(7) Secure ancillary equipment like the draw works and lines;


(8) Refuel or transfer fuel;


(9) Offload waste;


(10) Recover the Remotely Operated Vehicles;


(11) Pick up the oil spill prevention booms and equipment; and


(12) Offload the drilling crew.


(c) A description of well-specific drilling objectives, timelines, and updated contingency plans for temporary abandonment of the well, including but not limited to the following:


(1) When you will spud the particular well (i.e., begin drilling operations at the well site) identified in the APD;


(2) How long you will take to drill the well;


(3) Anticipated depths and geologic targets, with timelines;


(4) When you expect to set and cement each string of casing;


(5) When and how you would log the well;


(6) Your plans to test the well;


(7) When and how you intend to abandon the well, including specifically addressing your plans for how to move the rig off location and how you will meet the requirements of § 250.720(c);


(8) A description of what equipment and vessels will be involved in the process of temporarily abandoning the well due to ice; and


(9) An explanation of how you will integrate these elements into your overall program.


(d) A detailed description of your weather and ice forecasting capability for all phases of the drilling operation, including:


(1) How you will ensure your continuous awareness of potential weather and ice hazards at, and during transition between, wells;


(2) Your plans for managing ice hazards and responding to weather events; and


(3) Verification that you have the capabilities described in your BOEM-approved EP.


(e) A detailed description of how you will comply with the requirements of § 250.472.


(f) A statement that you own, or have a contract with a provider for, source control and containment equipment (SCCE), which is capable of controlling and/or containing a worst case discharge, as described in your BOEM-approved EP, when proposing to use a MODU to conduct exploratory drilling operations on the Arctic OCS. The following information must be included in your SCCE submittal:


(1) A detailed description of your or your contractor’s SCCE capability to stop or contain flow from an out-of-control well, including your operating assumptions and limitations; your access to and ability to deploy, in accordance with § 250.471, all necessary SCCE; and your ability to evaluate the performance of the well design to determine how you can achieve a full shut-in without having reservoir fluids discharged into the environment;


(2) An inventory of the local and regional SCCE, supplies, and services that you own or for which you have a contract with a provider. You must identify each supplier of such equipment and services and provide their locations and telephone numbers;


(3) Where applicable, proof of contracts or membership agreements with cooperatives, service providers, or other contractors who will provide you with the necessary SCCE or related supplies and services if you do not possess them. The contract or membership agreement must include provisions for ensuring the availability of the personnel and/or equipment on a 24-hour per day basis while you are drilling below or working below the surface casing;


(4) A detailed description of the procedures you plan to use to inspect, test, and maintain your SCCE; and


(5) A detailed description of your plan to ensure that all members of your operating team, who are responsible for operating the SCCE, have received the necessary training to deploy and operate such equipment in Arctic OCS conditions and demonstrate ongoing proficiency in source control operations. You must also identify and include the dates of prior and planned training.


(g) Where it does not conflict with other requirements of this subpart, and except as provided in paragraphs (g)(1) through (11) of this section, you must comply with the requirements of API RP 2N, Third Edition “Planning, Designing, and Constructing Structures and Pipelines for Arctic Conditions” (incorporated by reference as specified in § 250.198), and provide a detailed description of how you will utilize the best practices included in API RP 2N during your exploratory drilling operations. You are not required to incorporate the following sections of API RP 2N into your drilling operations:


(1) Sections 6.6.3 through 6.6.4;


(2) The foundation recommendations in Section 8.4;


(3) Section 9.6;


(4) The recommendations for permanently moored systems in Section 9.7;


(5) The recommendations for pile foundations in Section 9.10;


(6) Section 12;


(7) Section 13.2.1;


(8) Sections 13.8.1.1, 13.8.2.1, 13.8.2.2, 13.8.2.4 through 13.8.2.7;


(9) Sections 13.9.1, 13.9.2, 13.9.4 through 13.9.8;


(10) Sections 14 through 16; and


(11) Section 18.


§ 250.471 What are the requirements for Arctic OCS source control and containment?

You must meet the following requirements for all exploration wells drilled on the Arctic OCS:


(a) If you use a MODU when drilling below or working below the surface casing, you must have access to the following SCCE capable of stopping or capturing the flow of an out-of-control well:


(1) A capping stack, positioned to ensure that it will arrive at the well location within 24 hours after a loss of well control and can be deployed as directed by the Regional Supervisor pursuant to paragraph (h) of this section;


(2) A cap and flow system, positioned to ensure that it will arrive at the well location within 7 days after a loss of well control and can be deployed as directed by the Regional Supervisor pursuant to paragraph (h) of this section. The cap and flow system must be designed to capture at least the amount of hydrocarbons equivalent to the calculated worst case discharge rate referenced in your BOEM-approved EP; and


(3) A containment dome, positioned to ensure that it will arrive at the well location within 7 days after a loss of well control and can be deployed as directed by the Regional Supervisor pursuant to paragraph (h) of this section. The containment dome must have the capacity to pump fluids without relying on buoyancy.


(b) You must conduct a monthly stump test of dry-stored capping stacks. If you use a pre-positioned capping stack, you must conduct a stump test prior to each installation on each well.


(c) As required by § 250.465(a), if you propose to change your well design, you must submit an APM. For Arctic OCS operations, your APM must include a reevaluation of your SCCE capabilities for any new Worst Case Discharge (WCD) rate, and a demonstration that your SCCE capabilities will meet the criteria in § 250.470(f) under the changed well design.


(d) You must conduct tests or exercises of your SCCE, including deployment of your SCCE, when directed by the Regional Supervisor.


(e) You must maintain records pertaining to testing, inspection, and maintenance of your SCCE for at least 10 years and make the records available to any authorized BSEE representative upon request.


(f) You must maintain records pertaining to the use of your SCCE during testing, training, and deployment activities for at least 3 years and make the records available to any authorized BSEE representative upon request.


(g) Upon a loss of well control, you must initiate transit of all SCCE identified in paragraph (a) of this section to the well.


(h) You must deploy and use SCCE when directed by the Regional Supervisor.


(i) Operators may request approval of alternate procedures or equipment to the SCCE requirements of subparagraph (a) of this section in accordance with § 250.141. The operator must show and document that the alternate procedures or equipment will provide a level of safety and environmental protection that will meet or exceed the level of safety and environmental protection required by BSEE regulations, including demonstrating that the alternate procedures or equipment will be capable of stopping or capturing the flow of an out-of-control well.


§ 250.472 What are the relief rig requirements for the Arctic OCS?

(a) In the event of a loss of well control, the Regional Supervisor may direct you to drill a relief well using the relief rig able to kill and permanently plug an out-of-control well as described in your APD. Your relief rig must comply with all other requirements of this part pertaining to drill rig characteristics and capabilities, and it must be able to drill a relief well under anticipated Arctic OCS conditions.


(b) When you are drilling below or working below the surface casing during Arctic OCS exploratory drilling operations, you must have access to a relief rig, different from your primary drilling rig, staged in a location such that it can arrive on site, drill a relief well, kill and abandon the original well, and abandon the relief well prior to expected seasonal ice encroachment at the drill site, but no later than 45 days after the loss of well control.


(c) Operators may request approval of alternative compliance measures to the relief rig requirement in accordance with § 250.141. The operator must show and document that the alternate compliance measure will meet or exceed the level of safety and environmental protection required by BSEE regulations, including demonstrating that the alternate compliance measure will be able to kill and permanently plug an out-of-control well.


§ 250.473 What must I do to protect health, safety, property, and the
environment while operating on the Arctic OCS?

In addition to the requirements set forth in § 250.107, when conducting exploratory drilling operations on the Arctic OCS, you must protect health, safety, property, and the environment by using the following:


(a) Equipment and materials that are rated or de-rated for service under conditions that can be reasonably expected during your operations; and


(b) Measures to address human factors associated with weather conditions that can be reasonably expected during your operations including, but not limited to, provision of proper attire and equipment, construction of protected work spaces, and management of shifts.


Hydrogen Sulfide

§ 250.490 Hydrogen sulfide.

(a) What precautions must I take when operating in an H2S area? You must:


(1) Take all necessary and feasible precautions and measures to protect personnel from the toxic effects of H2S and to mitigate damage to property and the environment caused by H2S. You must follow the requirements of this section when conducting drilling, well-completion/well-workover, and production operations in zones with H2S present and when conducting operations in zones where the presence of H2S is unknown. You do not need to follow these requirements when operating in zones where the absence of H2S has been confirmed; and


(2) Follow your approved contingency plan.


(b) Definitions. Terms used in this section have the following meanings:


Facility means a vessel, a structure, or an artificial island used for drilling, well-completion, well-workover, and/or production operations.


H2S absent means:


(1) Drilling, logging, coring, testing, or producing operations have confirmed the absence of H2S in concentrations that could potentially result in atmospheric concentrations of 20 ppm or more of H2S; or


(2) Drilling in the surrounding areas and correlation of geological and seismic data with equivalent stratigraphic units have confirmed an absence of H2S throughout the area to be drilled.


H2S present means that drilling, logging, coring, testing, or producing operations have confirmed the presence of H2S in concentrations and volumes that could potentially result in atmospheric concentrations of 20 ppm or more of H2S.


H2S unknown means the designation of a zone or geologic formation where neither the presence nor absence of H2S has been confirmed.


Well-control fluid means drilling mud and completion or workover fluid as appropriate to the particular operation being conducted.


(c) Classifying an area for the presence of H2S. You must:


(1) Request and obtain an approved classification for the area from the Regional Supervisor before you begin operations. Classifications are “H2S absent,” H2S present,” or “H2S unknown”;


(2) Submit your request with your application for permit to drill;


(3) Support your request with available information such as geologic and geophysical data and correlations, well logs, formation tests, cores and analysis of formation fluids; and


(4) Submit a request for reclassification of a zone when additional data indicate a different classification is needed.


(d) What do I do if conditions change? If you encounter H2S that could potentially result in atmospheric concentrations of 20 ppm or more in areas not previously classified as having H2S present, you must immediately notify BSEE and begin to follow requirements for areas with H2S present.


(e) What are the requirements for conducting simultaneous operations? When conducting any combination of drilling, well-completion, well-workover, and production operations simultaneously, you must follow the requirements in the section applicable to each individual operation.


(f) Requirements for submitting an H2S Contingency Plan. Before you begin operations, you must submit an H2S Contingency Plan to the District Manager for approval. Do not begin operations before the District Manager approves your plan. You must keep a copy of the approved plan in the field, and you must follow the plan at all times. Your plan must include:


(1) Safety procedures and rules that you will follow concerning equipment, drills, and smoking;


(2) Training you provide for employees, contractors, and visitors;


(3) Job position and title of the person responsible for the overall safety of personnel;


(4) Other key positions, how these positions fit into your organization, and what the functions, duties, and responsibilities of those job positions are;


(5) Actions that you will take when the concentration of H2S in the atmosphere reaches 20 ppm, who will be responsible for those actions, and a description of the audible and visual alarms to be activated;


(6) Briefing areas where personnel will assemble during an H2S alert. You must have at least two briefing areas on each facility and use the briefing area that is upwind of the H2S source at any given time;


(7) Criteria you will use to decide when to evacuate the facility and procedures you will use to safely evacuate all personnel from the facility by vessel, capsule, or lifeboat. If you use helicopters during H2S alerts, describe the types of H2S emergencies during which you consider the risk of helicopter activity to be acceptable and the precautions you will take during the flights;


(8) Procedures you will use to safely position all vessels attendant to the facility. Indicate where you will locate the vessels with respect to wind direction. Include the distance from the facility and what procedures you will use to safely relocate the vessels in an emergency;


(9) How you will provide protective-breathing equipment for all personnel, including contractors and visitors;


(10) The agencies and facilities you will notify in case of a release of H2S (that constitutes an emergency), how you will notify them, and their telephone numbers. Include all facilities that might be exposed to atmospheric concentrations of 20 ppm or more of H2S;


(11) The medical personnel and facilities you will use if needed, their addresses, and telephone numbers;


(12) H2S detector locations in production facilities producing gas containing 20 ppm or more of H2S. Include an “H2S Detector Location Drawing” showing:


(i) All vessels, flare outlets, wellheads, and other equipment handling production containing H2S;


(ii) Approximate maximum concentration of H2S in the gas stream; and


(iii) Location of all H2S sensors included in your contingency plan;


(13) Operational conditions when you expect to flare gas containing H2S including the estimated maximum gas flow rate, H2S concentration, and duration of flaring;


(14) Your assessment of the risks to personnel during flaring and what precautionary measures you will take;


(15) Primary and alternate methods to ignite the flare and procedures for sustaining ignition and monitoring the status of the flare (i.e., ignited or extinguished);


(16) Procedures to shut off the gas to the flare in the event the flare is extinguished;


(17) Portable or fixed sulphur dioxide (SO2)-detection system(s) you will use to determine SO2 concentration and exposure hazard when H2S is burned;


(18) Increased monitoring and warning procedures you will take when the SO2 concentration in the atmosphere reaches 2 ppm;


(19) Personnel protection measures or evacuation procedures you will initiate when the SO2 concentration in the atmosphere reaches 5 ppm;


(20) Engineering controls to protect personnel from SO2; and


(21) Any special equipment, procedures, or precautions you will use if you conduct any combination of drilling, well-completion, well-workover, and production operations simultaneously.


(g) Training program: (1) When and how often do employees need to be trained? All operators and contract personnel must complete an H2S training program to meet the requirements of this section:


(i) Before beginning work at the facility; and


(ii) Each year, within 1 year after completion of the previous class.


(2) What training documentation do I need? For each individual working on the platform, either:


(i) You must have documentation of this training at the facility where the individual is employed; or


(ii) The employee must carry a training completion card.


(3) What training do I need to give to visitors and employees previously trained on another facility?


(i) Trained employees or contractors transferred from another facility must attend a supplemental briefing on your H2S equipment and procedures before beginning duty at your facility;


(ii) Visitors who will remain on your facility more than 24 hours must receive the training required for employees by paragraph (g)(4) of this section; and


(iii) Visitors who will depart before spending 24 hours on the facility are exempt from the training required for employees, but they must, upon arrival, complete a briefing that includes:


(A) Information on the location and use of an assigned respirator; practice in donning and adjusting the assigned respirator; information on the safe briefing areas, alarm system, and hazards of H2S and SO2; and


(B) Instructions on their responsibilities in the event of an H2S release.


(4) What training must I provide to all other employees? You must train all individuals on your facility on the:


(i) Hazards of H2S and of SO2 and the provisions for personnel safety contained in the H2S Contingency Plan;


(ii) Proper use of safety equipment which the employee may be required to use;


(iii) Location of protective breathing equipment, H2S detectors and alarms, ventilation equipment, briefing areas, warning systems, evacuation procedures, and the direction of prevailing winds;


(iv) Restrictions and corrective measures concerning beards, spectacles, and contact lenses in conformance with ANSI Z88.2, American National Standard for Respiratory Protection (as specified in § 250.198);


(v) Basic first-aid procedures applicable to victims of H2S exposure. During all drills and training sessions, you must address procedures for rescue and first aid for H2S victims;


(vi) Location of:


(A) The first-aid kit on the facility;


(B) Resuscitators; and


(C) Litter or other device on the facility.


(vii) Meaning of all warning signals.


(5) Do I need to post safety information? You must prominently post safety information on the facility and on vessels serving the facility (i.e., basic first-aid, escape routes, instructions for use of life boats, etc.).


(h) Drills. (1) When and how often do I need to conduct drills on H2S safety discussions on the facility? You must:


(i) Conduct a drill for each person at the facility during normal duty hours at least once every 7-day period. The drills must consist of a dry-run performance of personnel activities related to assigned jobs.


(ii) At a safety meeting or other meetings of all personnel, discuss drill performance, new H2S considerations at the facility, and other updated H2S information at least monthly.


(2) What documentation do I need? You must keep records of attendance for:


(i) Drilling, well-completion, and well-workover operations at the facility until operations are completed; and


(ii) Production operations at the facility or at the nearest field office for 1 year.


(i) Visual and audible warning systems: (1) How must I install wind direction equipment? You must install wind-direction equipment in a location visible at all times to individuals on or in the immediate vicinity of the facility.


(2) When do I need to display operational danger signs, display flags, or activate visual or audible alarms?


(i) You must display warning signs at all times on facilities with wells capable of producing H2S and on facilities that process gas containing H2S in concentrations of 20 ppm or more.


(ii) In addition to the signs, you must activate audible alarms and display flags or activate flashing red lights when atmospheric concentration of H2S reaches 20 ppm.


(3) What are the requirements for signs? Each sign must be a high-visibility yellow color with black lettering as follows:


Letter height
Wording
12 inchesDanger.
Poisonous Gas.
Hydrogen Sulfide.
7 inchesDo not approach if red flag is flying.
(Use appropriate wording at right)Do not approach if red lights are flashing.

(4) May I use existing signs? You may use existing signs containing the words “Danger-Hydrogen Sulfide-H2S,” provided the words “Poisonous Gas. Do Not Approach if Red Flag is Flying” or “Red Lights are Flashing” in lettering of a minimum of 7 inches in height are displayed on a sign immediately adjacent to the existing sign.


(5) What are the requirements for flashing lights or flags? You must activate a sufficient number of lights or hoist a sufficient number of flags to be visible to vessels and aircraft. Each light must be of sufficient intensity to be seen by approaching vessels or aircraft any time it is activated (day or night). Each flag must be red, rectangular, a minimum width of 3 feet, and a minimum height of 2 feet.


(6) What is an audible warning system? An audible warning system is a public address system or siren, horn, or other similar warning device with a unique sound used only for H2S.


(7) Are there any other requirements for visual or audible warning devices? Yes, you must:


(i) Illuminate all signs and flags at night and under conditions of poor visibility; and


(ii) Use warning devices that are suitable for the electrical classification of the area.


(8) What actions must I take when the alarms are activated? When the warning devices are activated, the designated responsible persons must inform personnel of the level of danger and issue instructions on the initiation of appropriate protective measures.


(j) H2S-detection and H2S monitoring equipment: (1) What are the requirements for an H2S detection system? An H2S detection system must:


(i) Be capable of sensing a minimum of 10 ppm of H2S in the atmosphere; and


(ii) Activate audible and visual alarms when the concentration of H2S in the atmosphere reaches 20 ppm.


(2) Where must I have sensors for drilling, well-completion, and well-workover operations? You must locate sensors at the:


(i) Bell nipple;


(ii) Mud-return line receiver tank (possum belly);


(iii) Pipe-trip tank;


(iv) Shale shaker;


(v) Well-control fluid pit area;


(vi) Driller’s station;


(vii) Living quarters; and


(viii) All other areas where H2S may accumulate.


(3) Do I need mud sensors? The District Manager may require mud sensors in the possum belly in cases where the ambient air sensors in the mud-return system do not consistently detect the presence of H2S.


(4) How often must I observe the sensors? During drilling, well-completion and well-workover operations, you must continuously observe the H2S levels indicated by the monitors in the work areas during the following operations:


(i) When you pull a wet string of drill pipe or workover string;


(ii) When circulating bottoms-up after a drilling break;


(iii) During cementing operations;


(iv) During logging operations; and


(v) When circulating to condition mud or other well-control fluid.


(5) Where must I have sensors for production operations? On a platform where gas containing H2S of 20 ppm or greater is produced, processed, or otherwise handled:


(i) You must have a sensor in rooms, buildings, deck areas, or low-laying deck areas not otherwise covered by paragraph (j)(2) of this section, where atmospheric concentrations of H2S could reach 20 ppm or more. You must have at least one sensor per 400 square feet of deck area or fractional part of 400 square feet;


(ii) You must have a sensor in buildings where personnel have their living quarters;


(iii) You must have a sensor within 10 feet of each vessel, compressor, wellhead, manifold, or pump, which could release enough H2S to result in atmospheric concentrations of 20 ppm at a distance of 10 feet from the component;


(iv) You may use one sensor to detect H2S around multiple pieces of equipment, provided the sensor is located no more than 10 feet from each piece, except that you need to use at least two sensors to monitor compressors exceeding 50 horsepower;


(v) You do not need to have sensors near wells that are shut in at the master valve and sealed closed;


(vi) When you determine where to place sensors, you must consider:


(A) The location of system fittings, flanges, valves, and other devices subject to leaks to the atmosphere; and


(B) Design factors, such as the type of decking and the location of fire walls; and


(vii) The District Manager may require additional sensors or other monitoring capabilities, if warranted by site specific conditions.


(6) How must I functionally test the H2S Detectors? (i) Personnel trained to calibrate the particular H2S detector equipment being used must test detectors by exposing them to a known concentration in the range of 10 to 30 ppm of H2S.


(ii) If the results of any functional test are not within 2 ppm or 10 percent, whichever is greater, of the applied concentration, recalibrate the instrument.


(7) How often must I test my detectors? (i) When conducting drilling, drill stem testing, well-completion, or well-workover operations in areas classified as H2S present or H2S unknown, test all detectors at least once every 24 hours. When drilling, begin functional testing before the bit is 1,500 feet (vertically) above the potential H2S zone.


(ii) When conducting production operations, test all detectors at least every 14 days between tests.


(iii) If equipment requires calibration as a result of two consecutive functional tests, the District Manager may require that H2S-detection and H2S-monitoring equipment be functionally tested and calibrated more frequently.


(8) What documentation must I keep? (i) You must maintain records of testing and calibrations (in the drilling or production operations report, as applicable) at the facility to show the present status and history of each device, including dates and details concerning:


(A) Installation;


(B) Removal;


(C) Inspection;


(D) Repairs;


(E) Adjustments; and


(F) Reinstallation.


(ii) Records must be available for inspection by BSEE personnel.


(9) What are the requirements for nearby vessels? If vessels are stationed overnight alongside facilities in areas of H2S present or H2S unknown, you must equip vessels with an H2S-detection system that activates audible and visual alarms when the concentration of H2S in the atmosphere reaches 20 ppm. This requirement does not apply to vessels positioned upwind and at a safe distance from the facility in accordance with the positioning procedure described in the approved H2S Contingency Plan.


(10) What are the requirements for nearby facilities? The District Manager may require you to equip nearby facilities with portable or fixed H2S detector(s) and to test and calibrate those detectors. To invoke this requirement, the District Manager will consider dispersion modeling results from a possible release to determine if 20 ppm H2S concentration levels could be exceeded at nearby facilities.


(11) What must I do to protect against SO2 if I burn gas containing H2S? You must:


(i) Monitor the SO2concentration in the air with portable or strategically placed fixed devices capable of detecting a minimum of 2 ppm of SO2;


(ii) Take readings at least hourly and at any time personnel detect SO2 odor or nasal irritation;


(iii) Implement the personnel protective measures specified in the H2S Contingency Plan if the SO2 concentration in the work area reaches 2 ppm; and


(iv) Calibrate devices every 3 months if you use fixed or portable electronic sensing devices to detect SO2.


(12) May I use alternative measures? You may follow alternative measures instead of those in paragraph (j)(11) of this section if you propose and the Regional Supervisor approves the alternative measures.


(13) What are the requirements for protective-breathing equipment? In an area classified as H2S present or H2S unknown, you must:


(i) Provide all personnel, including contractors and visitors on a facility, with immediate access to self-contained pressure-demand-type respirators with hoseline capability and breathing time of at least 15 minutes.


(ii) Design, select, use, and maintain respirators in conformance with ANSI Z88.2 (as specified in § 250.198).


(iii) Make available at least two voice-transmission devices, which can be used while wearing a respirator, for use by designated personnel.


(iv) Make spectacle kits available as needed.


(v) Store protective-breathing equipment in a location that is quickly and easily accessible to all personnel.


(vi) Label all breathing-air bottles as containing breathing-quality air for human use.


(vii) Ensure that vessels attendant to facilities carry appropriate protective-breathing equipment for each crew member. The District Manager may require additional protective-breathing equipment on certain vessels attendant to the facility.


(viii) During H2S alerts, limit helicopter flights to and from facilities to the conditions specified in the H2S Contingency Plan. During authorized flights, the flight crew and passengers must use pressure-demand-type respirators. You must train all members of flight crews in the use of the particular type(s) of respirator equipment made available.


(ix) As appropriate to the particular operation(s), (production, drilling, well-completion or well-workover operations, or any combination of them), provide a system of breathing-air manifolds, hoses, and masks at the facility and the briefing areas. You must provide a cascade air-bottle system for the breathing-air manifolds to refill individual protective-breathing apparatus bottles. The cascade air-bottle system may be recharged by a high-pressure compressor suitable for providing breathing-quality air, provided the compressor suction is located in an uncontaminated atmosphere.


(k) Personnel safety equipment: (1) What additional personnel-safety equipment do I need? You must ensure that your facility has:


(i) Portable H2S detectors capable of detecting a 10 ppm concentration of H2S in the air available for use by all personnel;


(ii) Retrieval ropes with safety harnesses to retrieve incapacitated personnel from contaminated areas;


(iii) Chalkboards and/or note pads for communication purposes located on the rig floor, shale-shaker area, the cement-pump rooms, well-bay areas, production processing equipment area, gas compressor area, and pipeline-pump area;


(iv) Bull horns and flashing lights; and


(v) At least three resuscitators on manned facilities, and a number equal to the personnel on board, not to exceed three, on normally unmanned facilities, complete with face masks, oxygen bottles, and spare oxygen bottles.


(2) What are the requirements for ventilation equipment? You must:


(i) Use only explosion-proof ventilation devices;


(ii) Install ventilation devices in areas where H2S or SO2 may accumulate; and


(iii) Provide movable ventilation devices in work areas. The movable ventilation devices must be multidirectional and capable of dispersing H2S or SO2 vapors away from working personnel.


(3) What other personnel safety equipment do I need? You must have the following equipment readily available on each facility:


(i) A first-aid kit of appropriate size and content for the number of personnel on the facility; and


(ii) At least one litter or an equivalent device.


(l) Do I need to notify BSEE in the event of an H2S release? You must notify BSEE without delay in the event of a gas release which results in a 15-minute time-weighted average atmospheric concentration of H2S of 20 ppm or more anywhere on the OCS facility. You must report these gas releases to the District Manager immediately by oral communication, with a written follow-up report within 15 days, pursuant to §§ 250.188 through 250.190.


(m) Do I need to use special drilling, completion and workover fluids or procedures? When working in an area classified as H2S present or H2S unknown:


(1) You may use either water- or oil-base muds in accordance with § 250.300(b)(1).


(2) If you use water-base well-control fluids, and if ambient air sensors detect H2S, you must immediately conduct either the Garrett-Gas-Train test or a comparable test for soluble sulfides to confirm the presence of H2S.


(3) If the concentration detected by air sensors in over 20 ppm, personnel conducting the tests must don protective-breathing equipment conforming to paragraph (j)(13) of this section.


(4) You must maintain on the facility sufficient quantities of additives for the control of H2S, well-control fluid pH, and corrosion equipment.


(i) Scavengers. You must have scavengers for control of H2S available on the facility. When H2S is detected, you must add scavengers as needed. You must suspend drilling until the scavenger is circulated throughout the system.


(ii) Control pH. You must add additives for the control of pH to water-base well-control fluids in sufficient quantities to maintain pH of at least 10.0.


(iii) Corrosion inhibitors. You must add additives to the well-control fluid system as needed for the control of corrosion.


(5) You must degas well-control fluids containing H2S at the optimum location for the particular facility. You must collect the gases removed and burn them in a closed flare system conforming to paragraph (q)(6) of this section.


(n) What must I do in the event of a kick? In the event of a kick, you must use one of the following alternatives to dispose of the well-influx fluids giving consideration to personnel safety, possible environmental damage, and possible facility well-equipment damage:


(1) Contain the well-fluid influx by shutting in the well and pumping the fluids back into the formation.


(2) Control the kick by using appropriate well-control techniques to prevent formation fracturing in an open hole within the pressure limits of the well equipment (drill pipe, work string, casing, wellhead, BOP system, and related equipment). The disposal of H2S and other gases must be through pressurized or atmospheric mud-separator equipment depending on volume, pressure and concentration of H2S. The equipment must be designed to recover well-control fluids and burn the gases separated from the well-control fluid. The well-control fluid must be treated to neutralize H2S and restore and maintain the proper quality.


(o) Well testing in a zone known to contain H2S. When testing a well in a zone with H2S present, you must do all of the following:


(1) Before starting a well test, conduct safety meetings for all personnel who will be on the facility during the test. At the meetings, emphasize the use of protective-breathing equipment, first-aid procedures, and the Contingency Plan. Only competent personnel who are trained and are knowledgeable of the hazardous effects of H2S must be engaged in these tests.


(2) Perform well testing with the minimum number of personnel in the immediate vicinity of the rig floor and with the appropriate test equipment to safely and adequately perform the test. During the test, you must continuously monitor H2S levels.


(3) Not burn produced gases except through a flare which meets the requirements of paragraph (q)(6) of this section. Before flaring gas containing H2S, you must activate SO2 monitoring equipment in accordance with paragraph (j)(11) of this section. If you detect SO2 in excess of 2 ppm, you must implement the personnel protective measures in your H2S Contingency Plan, required by paragraph (f) of this section. You must also follow the requirements of § 250.1164. You must pipe gases from stored test fluids into the flare outlet and burn them.


(4) Use downhole test tools and wellhead equipment suitable for H2S service.


(5) Use tubulars suitable for H2S service. You must not use drill pipe for well testing without the prior approval of the District Manager. Water cushions must be thoroughly inhibited in order to prevent H2S attack on metals. You must flush the test string fluid treated for this purpose after completion of the test.


(6) Use surface test units and related equipment that is designed for H2S service.


(p) Metallurgical properties of equipment. When operating in a zone with H2S present, you must use equipment that is constructed of materials with metallurgical properties that resist or prevent sulfide stress cracking (also known as hydrogen embrittlement, stress corrosion cracking, or H2S embrittlement), chloride-stress cracking, hydrogen-induced cracking, and other failure modes. You must do all of the following:


(1) Use tubulars and other equipment, casing, tubing, drill pipe, couplings, flanges, and related equipment that is designed for H2S service.


(2) Use BOP system components, wellhead, pressure-control equipment, and related equipment exposed to H2S-bearing fluids in conformance with NACE Standard MR0175-03 (as specified in § 250.198).


(3) Use temporary downhole well-security devices such as retrievable packers and bridge plugs that are designed for H2S service.


(4) When producing in zones bearing H2S, use equipment constructed of materials capable of resisting or preventing sulfide stress cracking.


(5) Keep the use of welding to a minimum during the installation or modification of a production facility. Welding must be done in a manner that ensures resistance to sulfide stress cracking.


(q) General requirements when operating in an H2S zone: (1) Coring operations. When you conduct coring operations in H2S-bearing zones, all personnel in the working area must wear protective-breathing equipment at least 10 stands in advance of retrieving the core barrel. Cores to be transported must be sealed and marked for the presence of H2S.


(2) Logging operations. You must treat and condition well-control fluid in use for logging operations to minimize the effects of H2S on the logging equipment.


(3) Stripping operations. Personnel must monitor displaced well-control fluid returns and wear protective-breathing equipment in the working area when the atmospheric concentration of H2S reaches 20 ppm or if the well is under pressure.


(4) Gas-cut well-control fluid or well kick from H2S-bearing zone. If you decide to circulate out a kick, personnel in the working area during bottoms-up and extended-kill operations must wear protective-breathing equipment.


(5) Drill- and workover-string design and precautions. Drill- and workover-strings must be designed consistent with the anticipated depth, conditions of the hole, and reservoir environment to be encountered. You must minimize exposure of the drill- or workover-string to high stresses as much as practical and consistent with well conditions. Proper handling techniques must be taken to minimize notching and stress concentrations. Precautions must be taken to minimize stresses caused by doglegs, improper stiffness ratios, improper torque, whip, abrasive wear on tool joints, and joint imbalance.


(6) Flare system. The flare outlet must be of a diameter that allows easy nonrestricted flow of gas. You must locate flare line outlets on the downside of the facility and as far from the facility as is feasible, taking into account the prevailing wind directions, the wake effects caused by the facility and adjacent structure(s), and the height of all such facilities and structures. You must equip the flare outlet with an automatic ignition system including a pilot-light gas source or an equivalent system. You must have alternate methods for igniting the flare. You must pipe to the flare system used for H2S all vents from production process equipment, tanks, relief valves, burst plates, and similar devices.


(7) Corrosion mitigation. You must use effective means of monitoring and controlling corrosion caused by acid gases (H2S and CO2) in both the downhole and surface portions of a production system. You must take specific corrosion monitoring and mitigating measures in areas of unusually severe corrosion where accumulation of water and/or higher concentration of H2S exists.


(8) Wireline lubricators. Lubricators which may be exposed to fluids containing H2S must be of H2S-resistant materials.


(9) Fuel and/or instrument gas. You must not use gas containing H2S for instrument gas. You must not use gas containing H2S for fuel gas without the prior approval of the District Manager.


(10) Sensing lines and devices. Metals used for sensing line and safety-control devices which are necessarily exposed to H2S-bearing fluids must be constructed of H2S-corrosion resistant materials or coated so as to resist H2S corrosion.


(11) Elastomer seals. You must use H2S-resistant materials for all seals which may be exposed to fluids containing H2S.


(12) Water disposal. If you dispose of produced water by means other than subsurface injection, you must submit to the District Manager an analysis of the anticipated H2S content of the water at the final treatment vessel and at the discharge point. The District Manager may require that the water be treated for removal of H2S. The District Manager may require the submittal of an updated analysis if the water disposal rate or the potential H2S content increases.


(13) Deck drains. You must equip open deck drains with traps or similar devices to prevent the escape of H2S gas into the atmosphere.


(14) Sealed voids. You must take precautions to eliminate sealed spaces in piping designs (e.g., slip-on flanges, reinforcing pads) which can be invaded by atomic hydrogen when H2S is present.


Subpart E – Oil and Gas Well-Completion Operations

§ 250.500 General requirements.

Well-completion operations must be conducted in a manner to protect against harm or damage to life (including fish and other aquatic life), property, natural resources of the OCS, including any mineral deposits (in areas leased and not leased), the National security or defense, or the marine, coastal, or human environment. In addition to the requirements of this subpart, you must also follow the applicable requirements of subpart G of this part.


[81 FR 26021, Apr. 29, 2016]


§ 250.501 Definition.

When used in this subpart, the following term shall have the meaning given below:


Well-completion operations means the work conducted to establish the production of a well after the production-casing string has been set, cemented, and pressure-tested.


§ 250.502 [Reserved]

§ 250.503 Emergency shutdown system.

When well-completion operations are conducted on a platform where there are other hydrocarbon-producing wells or other hydrocarbon flow, an emergency shutdown system (ESD) manually controlled station shall be installed near the driller’s console or well-servicing unit operator’s work station.


§ 250.504 Hydrogen sulfide.

When a well-completion operation is conducted in zones known to contain hydrogen sulfide (H2S) or in zones where the presence of H2S is unknown (as defined in § 250.490 of this part), the lessee shall take appropriate precautions to protect life and property on the platform or completion unit, including, but not limited to operations such as blowing the well down, dismantling wellhead equipment and flow lines, circulating the well, swabbing, and pulling tubing, pumps, and packers. The lessee shall comply with the requirements in § 250.490 of this part as well as the appropriate requirements of this subpart.


§ 250.505 Subsea completions.

No subsea well completion shall be commenced until the lessee obtains written approval from the District Manager in accordance with § 250.513 of this part. That approval shall be based upon a case-by-case determination that the proposed equipment and procedures will adequately control the well and permit safe production operations.


§§ 250.506-250.508 [Reserved]

§ 250.509 Well-completion structures on fixed platforms.

Derricks, masts, substructures, and related equipment shall be selected, designed, installed, used, and maintained so as to be adequate for the potential loads and conditions of loading that may be encountered during the proposed operations. Prior to moving a well-completion rig or equipment onto a platform, the lessee shall determine the structural capability of the platform to safely support the equipment and proposed operations, taking into consideration the corrosion protection, age of platform, and previous stresses to the platform.


§ 250.510 Diesel engine air intakes.

Diesel engine air intakes must be equipped with a device to shut down the diesel engine in the event of runaway. Diesel engines that are continuously attended must be equipped with either remote operated manual or automatic-shutdown devices. Diesel engines that are not continuously attended must be equipped with automatic-shutdown devices.


§ 250.511 Traveling-block safety device.

All units being used for well-completion operations that have both a traveling block and a crown block must be equipped with a safety device that is designed to prevent the traveling block from striking the crown block. The device must be checked for proper operation weekly and after each drill-line slipping operation. The results of the operational check must be entered in the operations log.


§ 250.512 Field well-completion rules.

When geological and engineering information available in a field enables the District Manager to determine specific operating requirements, field well-completion rules may be established on the District Manager’s initiative or in response to a request from a lessee. Such rules may modify the specific requirements of this subpart. After field well-completion rules have been established, well-completion operations in the field shall be conducted in accordance with such rules and other requirements of this subpart. Field well-completion rules may be amended or canceled for cause at any time upon the initiative of the District Manager or upon the request of a lessee.


§ 250.513 Approval and reporting of well-completion operations.

(a) No well-completion operation may begin until the lessee receives written approval from the District Manager. If completion is planned and the data are available at the time you submit the Application for Permit to Drill and Supplemental APD Information Sheet (Forms BSEE-0123 and BSEE-0123S), you may request approval for a well-completion on those forms (see §§ 250.410 through 250.418 of this part). If the District Manager has not approved the completion or if the completion objective or plans have significantly changed, you must submit an Application for Permit to Modify (Form BSEE-0124) for approval of such operations.


(b) You must submit the following with Form BSEE-0124 (or with Form BSEE-0123; Form BSEE-0123S):


(1) A brief description of the well-completion procedures to be followed, a statement of the expected surface pressure, and type and weight of completion fluids;


(2) A schematic drawing of the well showing the proposed producing zone(s) and the subsurface well-completion equipment to be used;


(3) For multiple completions, a partial electric log showing the zones proposed for completion, if logs have not been previously submitted;


(4) All applicable information required in § 250.731.


(5) When the well-completion is in a zone known to contain H2S or a zone where the presence of H2S is unknown, information pursuant to § 250.490 of this part; and


(6) Payment of the service fee listed in § 250.125.


(c) Within 30 days after completion, you must submit to the District Manager an End of Operations Report (Form BSEE-0125), including a schematic of the tubing and subsurface equipment.


(d) You must submit public information copies of Form BSEE-0125 according to § 250.186.


[76 FR 64462, Oct. 18, 2011, as amended at 77 FR 50894, Aug. 22, 2012; 81 FR 26021, Apr. 29, 2016]


§ 250.514 Well-control fluids, equipment, and operations.

(a) Well-control fluids, equipment, and operations shall be designed, utilized, maintained, and/or tested as necessary to control the well in foreseeable conditions and circumstances, including subfreezing conditions. The well shall be continuously monitored during well-completion operations and shall not be left unattended at any time unless the well is shut in and secured.


(b) The following well-control-fluid equipment shall be installed, maintained, and utilized:


(1) A fill-up line above the uppermost BOP;


(2) A well-control, fluid-volume measuring device for determining fluid volumes when filling the hole on trips; and


(3) A recording mud-pit-level indicator to determine mud-pit-volume gains and losses. This indicator shall include both a visual and an audible warning device.


(c) When coming out of the hole with drill pipe, the annulus shall be filled with well-control fluid before the change in such fluid level decreases the hydrostatic pressure 75 pounds per square inch (psi) or every five stands of drill pipe, whichever gives a lower decrease in hydrostatic pressure. The number of stands of drill pipe and drill collars that may be pulled prior to filling the hole and the equivalent well-control fluid volume shall be calculated and posted near the operator’s station. A mechanical, volumetric, or electronic device for measuring the amount of well-control fluid required to fill the hole shall be utilized.


[76 FR 64462, Oct. 18, 2011, as amended at 77 FR 50894, Aug. 22, 2012; 81 FR 26021, Apr. 29, 2016]


§§ 250.515-250.517 [Reserved]

§ 250.518 Tubing and wellhead equipment.

(a) No tubing string shall be placed in service or continue to be used unless such tubing string has the necessary strength and pressure integrity and is otherwise suitable for its intended use.


(b) When the tree is installed, you must equip wells to monitor for casing pressure according to the following chart:


If you . . .
you must equip . . .
so you can monitor . . .
(1) fixed platform wells,the wellhead,all annuli (A, B, C, D, etc., annuli).
(2) subsea wells,the tubing head,the production casing annulus (A annulus).
(3) hybrid * wells,the surface wellhead,all annuli at the surface (A and B riser annuli). If the production casing below the mudline and the production casing riser above the mudline are pressure isolated from each other, provisions must be made to monitor the production casing below the mudline for casing pressure.

* Characterized as a well drilled with a subsea wellhead and completed with a surface casing head, a surface tubing head, a surface tubing hanger, and a surface christmas tree.


(c) Wellhead, tree, and related equipment shall have a pressure rating greater than the shut-in tubing pressure and shall be designed, installed, used, maintained, and tested so as to achieve and maintain pressure control. New wells completed as flowing or gas-lift wells shall be equipped with a minimum of one master valve and one surface safety valve, installed above the master valve, in the vertical run of the tree.


(d) Subsurface safety equipment must be installed, maintained, and tested in compliance with the applicable sections in §§ 250.810 through 250.839.


(e) When installed, packers and bridge plugs must meet the following:


(1) The uppermost permanently installed packer and all permanently installed bridge plugs qualified as mechanical barriers must comply with ANSI/API Spec. 11D1 (as incorporated by reference in § 250.198);


(2) The production packer must be set at a depth that will allow for a column of weighted fluids to be placed above the packer that will exert a hydrostatic force greater than or equal to the force created by the reservoir pressure below the packer;


(3) The production packer must be set as close as practically possible to the perforated interval; and


(4) The production packer must be set at a depth that is within the cemented interval of the selected casing section.


(f) Your APM must include a description and calculations for how you determined the production packer setting depth.


(g) You must have two independent barriers, one being mechanical, in the exposed center wellbore prior to removing the tree and/or well control equipment.


[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012, as amended at 81 FR 26021, Apr. 29, 2016; 81 FR 61918, Sept. 7, 2016; 84 FR 21976, May 15, 2019]


Casing Pressure Management

§ 250.519 What are the requirements for casing pressure management?

Once you install your wellhead, you must meet the casing pressure management requirements of API RP 90 (as incorporated by reference in § 250.198) and the requirements of §§ 250.519 through 250.531. If there is a conflict between API RP 90 and the casing pressure requirements of this subpart, you must follow the requirements of this subpart.


[84 FR 21976, May 15, 2019]


§ 250.520 How often do I have to monitor for casing pressure?

You must monitor for casing pressure in your well according to the following table:


If you have . . .
you must monitor . . .
with a minimum one pressure data point recorded per . . .
(a) fixed platform wells,monthly,month for each casing.
(b) subsea wells,continuously,day for the production casing.
(c) hybrid wells,continuously,day for each riser and/or the production casing.
(d) wells operating under a casing pressure request on a manned fixed platform,daily,day for each casing.
(e) wells operating under a casing pressure request on an unmanned fixed platform,weekly,week for each casing.

[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012]


§ 250.521 When do I have to perform a casing diagnostic test?

(a) You must perform a casing diagnostic test within 30 days after first observing or imposing casing pressure according to the following table:


If you have a . . .
you must perform a casing diagnostic test if . . .
(1) fixed platform well,the casing pressure is greater than 100 psig.
(2) subsea well,the measurable casing pressure is greater than the external hydrostatic pressure plus 100 psig measured at the subsea wellhead.
(3) hybrid well,a riser or the production casing pressure is greater than 100 psig measured at the surface.

(b) You are exempt from performing a diagnostic pressure test for the production casing on a well operating under active gas lift.


[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012]


§ 250.522 How do I manage the thermal effects caused by initial production on a newly completed or recompleted well?

A newly completed or recompleted well often has thermal casing pressure during initial startup. Bleeding casing pressure during the startup process is considered a normal and necessary operation to manage thermal casing pressure; therefore, you do not need to evaluate these operations as a casing diagnostic test. After 30 days of continuous production, the initial production startup operation is complete and you must perform casing diagnostic testing as required in §§ 250.521 and 250.523.


[84 FR 21976, May 15, 2019]


§ 250.523 When do I have to repeat casing diagnostic testing?

Casing diagnostic testing must be repeated according to the following table:


When . . .
you must repeat diagnostic testing . . .
(a) your casing pressure request approved term has expired,immediately.
(b) your well, previously on gas lift, has been shut-in or returned to flowing status without gas lift for more than 180 days,immediately on the production casing (A annulus). The production casing (A annulus) of wells on active gas lift are exempt from diagnostic testing.
(c) your casing pressure request becomes invalid,within 30 days.
(d) a casing or riser has an increase in pressure greater than 200 psig over the previous casing diagnostic test,within 30 days.
(e) after any corrective action has been taken to remediate undesirable casing pressure, either as a result of a casing pressure request denial or any other action,within 30 days.
(f) your fixed platform well production casing (A annulus) has pressure exceeding 10 percent of its minimum internal yield pressure (MIYP), except for production casings on active gas lift,once per year, not to exceed 12 months between tests.
(g) your fixed platform well’s outer casing (B, C, D, etc., annuli) has a pressure exceeding 20 percent of its MIYP,once every 5 years, at a minimum.

[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012]


§ 250.524 How long do I keep records of casing pressure and diagnostic tests?

Records of casing pressure and diagnostic tests must be kept at the field office nearest the well for a minimum of 2 years. The last casing diagnostic test for each casing or riser must be retained at the field office nearest the well until the well is abandoned.


[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012]


§ 250.525 When am I required to take action from my casing diagnostic test?

You must take action if you have any of the following conditions:


(a) Any fixed platform well with a casing pressure exceeding its maximum allowable wellhead operating pressure (MAWOP);


(b) Any fixed platform well with a casing pressure that is greater than 100 psig and that cannot bleed to 0 psig through a
1/2-inch needle valve within 24 hours, or is not bled to 0 psig during a casing diagnostic test;


(c) Any well that has demonstrated tubing/casing, tubing/riser, casing/casing, riser/casing, or riser/riser communication;


(d) Any well that has sustained casing pressure (SCP) and is bled down to prevent it from exceeding its MAWOP, except during initial startup operations described in § 250.522;


(e) Any hybrid well with casing or riser pressure exceeding 100 psig; or


(f) Any subsea well with a casing pressure 100 psig greater than the external hydrostatic pressure at the subsea wellhead.


[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012; 84 FR 21976, May 15, 2019]


§ 250.526 What do I submit if my casing diagnostic test requires action?

Within 14 days after you perform a casing diagnostic test requiring action under § 250.525:


You must submit either . . .
to the appropriate . . .
and it must include . . .
You must also . . .
(a) a notification of corrective action; or,District Manager and copy the Regional Supervisor, Field Operations,requirements under § 250.527,submit an Application for Permit to Modify or Corrective Action Plan within 30 days of the diagnostic test.
(b) a casing pressure request,Regional Supervisor, Field Operations,requirements under § 250.528.

[84 FR 21976, May 15, 2019]


§ 250.527 What must I include in my notification of corrective action?

The following information must be included in the notification of corrective action:


(a) Lessee or Operator name;


(b) Area name and OCS block number;


(c) Well name and API number; and


(d) Casing diagnostic test data.


[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012]


§ 250.528 What must I include in my casing pressure request?

The following information must be included in the casing pressure request:


(a) API number;


(b) Lease number;


(c) Area name and OCS block number;


(d) Well number;


(e) Company name and mailing address;


(f) All casing, riser, and tubing sizes, weights, grades, and MIYP;


(g) All casing/riser calculated MAWOPs;


(h) All casing/riser pre-bleed down pressures;


(i) Shut-in tubing pressure;


(j) Flowing tubing pressure;


(k) Date and the calculated daily production rate during last well test (oil, gas, basic sediment, and water);


(l) Well status (shut-in, temporarily abandoned, producing, injecting, or gas lift);


(m) Well type (dry tree, hybrid, or subsea);


(n) Date of diagnostic test;


(o) Well schematic;


(p) Water depth;


(q) Volumes and types of fluid bled from each casing or riser evaluated;


(r) Type of diagnostic test performed:


(1) Bleed down/buildup test;


(2) Shut-in the well and monitor the pressure drop test;


(3) Constant production rate and decrease the annular pressure test;


(4) Constant production rate and increase the annular pressure test;


(5) Change the production rate and monitor the casing pressure test; and


(6) Casing pressure and tubing pressure history plot;


(s) The casing diagnostic test data for all casing exceeding 100 psig;


(t) Associated shoe strengths for casing shoes exposed to annular fluids;


(u) Concentration of any H2S that may be present;


(v) Whether the structure on which the well is located is manned or unmanned;


(w) Additional comments; and


(x) Request date.


[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012]


§ 250.529 What are the terms of my casing pressure request?

Casing pressure requests are approved by the Regional Supervisor, Field Operations, for a term to be determined by the Regional Supervisor on a case-by-case basis. The Regional Supervisor may impose additional restrictions or requirements to allow continued operation of the well.


[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012]


§ 250.530 What if my casing pressure request is denied?

(a) If your casing pressure request is denied, then the operating company must submit plans for corrective action to the respective District Manager within 30 days of receiving the denial. The District Manager will establish a specific time period in which this corrective action will be taken. You must notify the respective District Manager within 30 days after completion of your corrected action.


(b) You must submit the casing diagnostic test data to the appropriate Regional Supervisor, Field Operations, within 14 days of completion of the diagnostic test required under § 250.523(e).


[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012, as amended at 84 FR 21976, May 15, 2019]


§ 250.531 When does my casing pressure request approval become invalid?

A casing pressure request becomes invalid when:


(a) The casing or riser pressure increases by 200 psig over the approved casing pressure request pressure;


(b) The approved term ends;


(c) The well is worked-over, side-tracked, redrilled, recompleted, or acid stimulated;


(d) A different casing or riser on the same well requires a casing pressure request; or


(e) A well has more than one casing operating under a casing pressure request and one of the casing pressure requests become invalid, then all casing pressure requests for that well become invalid.


[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50894, Aug. 22, 2012]


Subpart F – Oil and Gas Well-Workover Operations

§ 250.600 General requirements.

Well-workover operations must be conducted in a manner to protect against harm or damage to life (including fish and other aquatic life), property, natural resources of the Outer Continental Shelf (OCS) including any mineral deposits (in areas leased and not leased), the National security or defense, or the marine, coastal, or human environment. In addition to the requirements of this subpart, you must also follow the applicable requirements of subpart G of this part.


[81 FR 26021, Apr. 29, 2016]


§ 250.601 Definitions.

When used in this subpart, the following terms shall have the meanings given below:


Expected surface pressure means the highest pressure predicted to be exerted upon the surface of a well. In calculating expected surface pressure, you must consider reservoir pressure as well as applied surface pressure.


Routine operations mean any of the following operations conducted on a well with the tree installed:


(a) Cutting paraffin;


(b) Removing and setting pump-through-type tubing plugs, gas-lift valves, and subsurface safety valves which can be removed by wireline operations;


(c) Bailing sand;


(d) Pressure surveys;


(e) Swabbing;


(f) Scale or corrosion treatment;


(g) Caliper and gauge surveys;


(h) Corrosion inhibitor treatment;


(i) Removing or replacing subsurface pumps;


(j) Through-tubing logging (diagnostics);


(k) Wireline fishing; and


(l) Setting and retrieving other subsurface flow-control devices.


(m) Acid treatments.


Workover operations mean the work conducted on wells after the initial completion for the purpose of maintaining or restoring the productivity of a well.


[76 FR 64462, Oct. 18, 2011, as amended at 84 FR 21976, May 15, 2019]


§ 250.602 [Reserved]

§ 250.603 Emergency shutdown system.

When well-workover operations are conducted on a well with the tree removed, an emergency shutdown system (ESD) manually controlled station shall be installed near the driller’s console or well-servicing unit operator’s work station, except when there is no other hydrocarbon-producing well or other hydrocarbon flow on the platform.


§ 250.604 Hydrogen sulfide.

When a well-workover operation is conducted in zones known to contain hydrogen sulfide (H2S) or in zones where the presence of H2S is unknown (as defined in § 250.490 of this part), the lessee shall take appropriate precautions to protect life and property on the platform or rig, including but not limited to operations such as blowing the well down, dismantling wellhead equipment and flow lines, circulating the well, swabbing, and pulling tubing, pumps and packers. The lessee shall comply with the requirements in § 250.490 of this part as well as the appropriate requirements of this subpart.


§ 250.605 Subsea workovers.

No subsea well-workover operation including routine operations shall be commenced until the lessee obtains written approval from the District Manager in accordance with § 250.613 of this part. That approval shall be based upon a case-by-case determination that the proposed equipment and procedures will maintain adequate control of the well and permit continued safe production operations.


§§ 250.606-250.608 [Reserved]

§ 250.609 Well-workover structures on fixed platforms.

Derricks, masts, substructures, and related equipment shall be selected, designed, installed, used, and maintained so as to be adequate for the potential loads and conditions of loading that may be encountered during the operations proposed. Prior to moving a well-workover rig or well-servicing equipment onto a platform, the lessee shall determine the structural capability of the platform to safely support the equipment and proposed operations, taking into consideration the corrosion protection, age of the platform, and previous stresses to the platform.


§ 250.610 Diesel engine air intakes.

You must equip diesel engine air intakes with a device to shut down the diesel engine in the event of runaway. Diesel engines that are continuously attended must be equipped with remotely operated, manual, or automatic shutdown devices. Diesel engines that are not continuously attended must be equipped with automatic shutdown devices.


[81 FR 36149, June 6, 2016]


§ 250.611 Traveling-block safety device.

You must equip all units being used for well-workover operations that have both a traveling block and a crown block with a safety device that is designed to prevent the traveling block from striking the crown block. You must check the device for proper operation weekly and after each drill-line slipping operation. You must enter the results of the operational check in the operations log.


[81 FR 36149, June 6, 2016]


§ 250.612 Field well-workover rules.

When geological and engineering information available in a field enables the District Manager to determine specific operating requirements, field well-workover rules may be established on the District Manager’s initiative or in response to a request from a lessee. Such rules may modify the specific requirements of this subpart. After field well-workover rules have been established, well-workover operations in the field shall be conducted in accordance with such rules and other requirements of this subpart. Field well-workover rules may be amended or canceled for cause at any time upon the initiative of the District Manager or upon the request of a lessee.


§ 250.613 Approval and reporting for well-workover operations.

(a) No well-workover operation except routine ones, as defined in § 250.601 of this part, shall begin until the lessee receives written approval from the District Manager. Approval for these operations must be requested on Form BSEE-0124, Application for Permit to Modify.


(b) You must submit the following with Form BSEE-0124:


(1) A brief description of the well-workover procedures to be followed, a statement of the expected surface pressure, and type and weight of workover fluids;


(2) When changes in existing subsurface equipment are proposed, a schematic drawing of the well showing the zone proposed for workover and the workover equipment to be used;


(3) All information required in § 250.731.


(4) Where the well-workover is in a zone known to contain H2S or a zone where the presence of H2S is unknown, information pursuant to § 250.490 of this part; and


(5) Payment of the service fee listed in § 250.125.


(c) The following additional information shall be submitted with Form BSEE-0124 if completing to a new zone is proposed:


(1) Reason for abandonment of present producing zone including supportive well test data, and


(2) A statement of anticipated or known pressure data for the new zone.


(d) Within 30 days after completing the well-workover operation, except routine operations, Form BSEE-0124, Application for Permit to Modify, shall be submitted to the District Manager, showing the work as performed. In the case of a well-workover operation resulting in the initial recompletion of a well into a new zone, a Form BSEE-0125, End of Operations Report, shall be submitted to the District Manager and shall include a new schematic of the tubing subsurface equipment if any subsurface equipment has been changed.


[76 FR 64462, Oct. 18, 2011, as amended at 77 FR 50895, Aug. 22, 2012; 81 FR 26021, Apr. 29, 2016]


§ 250.614 Well-control fluids, equipment, and operations.

The following requirements apply during all well-workover operations with the tree removed:


(a) Well-control fluids, equipment, and operations shall be designed, utilized, maintained, and/or tested as necessary to control the well in foreseeable conditions and circumstances, including subfreezing conditions. The well shall be continuously monitored during well-workover operations and shall not be left unattended at anytime unless the well is shut in and secured.


(b) When coming out of the hole with drill pipe or a workover string, the annulus shall be filled with well-control fluid before the change in such fluid level decreases the hydrostatic pressure 75 pounds per square inch (psi) or every five stands of drill pipe or workover string, whichever gives a lower decrease in hydrostatic pressure. The number of stands of drill pipe or workover string and drill collars that may be pulled prior to filling the hole and the equivalent well-control fluid volume shall be calculated and posted near the operator’s station. A mechanical, volumetric, or electronic device for measuring the amount of well-control fluid required to fill the hold shall be utilized.


(c) The following well-control-fluid equipment shall be installed, maintained, and utilized:


(1) A fill-up line above the uppermost BOP;


(2) A well-control, fluid-volume measuring device for determining fluid volumes when filling the hole on trips; and


(3) A recording mud-pit-level indicator to determine mud-pit-volume gains and losses. This indicator shall include both a visual and an audible warning device.


[76 FR 64462, Oct. 18, 2011, as amended at 77 FR 50895, Aug. 22, 2012; 81 FR 26021, Apr. 29, 2016]


§§ 250.615-250.618 [Reserved]

§ 250.619 Tubing and wellhead equipment.

The lessee shall comply with the following requirements during well-workover operations with the tree removed:


(a) No tubing string shall be placed in service or continue to be used unless such tubing string has the necessary strength and pressure integrity and is otherwise suitable for its intended use.


(b) When reinstalling the tree, you must:


(1) Equip wells to monitor for casing pressure according to the following chart:


If you have . . .
you must equip . . .
so you can monitor . . .
(i) fixed platform wells,the wellhead,all annuli (A, B, C, D, etc., annuli).
(ii) subsea wells,the tubing head,the production casing annulus (A annulus).
(iii) hybrid* wells,the surface wellhead,all annuli at the surface (A and B riser annuli). If the production casing below the mudline and the production casing riser above the mudline are pressure isolated from each other, provisions must be made to monitor the production casing below the mudline for casing pressure.

* Characterized as a well drilled with a subsea wellhead and completed with a surface casing head, a surface tubing head, a surface tubing hanger, and a surface christmas tree.


(2) Follow the casing pressure management requirements in subpart E of this part.


(c) Wellhead, tree, and related equipment shall have a pressure rating greater than the shut-in tubing pressure and shall be designed, installed, used, maintained, and tested so as to achieve and maintain pressure control. The tree shall be equipped with a minimum of one master valve and one surface safety valve in the vertical run of the tree when it is reinstalled.


(d) Subsurface safety equipment must be installed, maintained, and tested in compliance with the applicable sections in §§ 250.810 through 250.839.


(e) If you pull and reinstall packers and bridge plugs, you must meet the following requirements:


(1) The uppermost permanently installed packer and all permanently installed bridge plugs qualified as mechanical barriers must comply with ANSI/API Spec. 11D1 (as incorporated by reference in § 250.198).


(2) The production packer must be set at a depth that will allow for a column of weighted fluids to be placed above the packer that will exert a hydrostatic force greater than or equal to the force created by the reservoir pressure below the packer;


(3) The production packer must be set as close as practically possible to the perforated interval; and


(4) The production packer must be set at a depth that is within the cemented interval of the selected casing section.


(f) Your APM must include a description and calculations for how you determined the production packer setting depth.


(g) You must have two independent barriers, one being mechanical, in the exposed center wellbore prior to removing the tree and/or well control equipment.


[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50895, Aug. 22, 2012, as amended at 81 FR 26021, Apr. 29, 2016; 81 FR 61918, Sept. 7, 2016; 84 FR 21976, May 15, 2019]


§ 250.620 Wireline operations.

The lessee shall comply with the following requirements during routine, as defined in § 250.601 of this part, and nonroutine wireline workover operations:


(a) Wireline operations shall be conducted so as to minimize leakage of well fluids. Any leakage that does occur shall be contained to prevent pollution.


(b) All wireline perforating operations and all other wireline operations where communication exists between the completed hydrocarbon-bearing zone(s) and the wellbore shall use a lubricator assembly containing at least one wireline valve.


(c) When the lubricator is initially installed on the well, it shall be successfully pressure tested to the expected shut-in surface pressure.


[76 FR 64462, Oct. 18, 2011. Redesignated at 77 FR 50895, Aug. 22, 2012]


Subpart G – Well Operations and Equipment


Source:81 FR 26022, Apr. 29, 2016, unless otherwise noted.

General Requirements

§ 250.700 What operations and equipment does this subpart cover?

This subpart covers operations and equipment associated with drilling, completion, workover, and decommissioning activities. This subpart includes regulations applicable to drilling, completion, workover, and decommissioning activities in addition to applicable regulations contained in subparts D, E, F, and Q of this part unless explicitly stated otherwise.


§ 250.701 May I use alternate procedures or equipment during operations?

You may use alternate procedures or equipment during operations after receiving approval as described in § 250.141. You must identify and discuss your proposed alternate procedures or equipment in your Application for Permit to Drill (APD) (Form BSEE-0123) (see § 250.414(h)) or your Application for Permit to Modify (APM) (Form BSEE-0124). Procedures for obtaining approval of alternate procedures or equipment are described in § 250.141.


§ 250.702 May I obtain departures from these requirements?

You may apply for a departure from these requirements as described in § 250.142. Your request must include a justification showing why the departure is necessary. You must identify and discuss the departure you are requesting in your APD (see § 250.414(h)) or your APM.


§ 250.703 What must I do to keep wells under control?

You must take the necessary precautions to keep wells under control at all times, including:


(a) Use recognized engineering practices to reduce risks to the lowest level practicable when monitoring and evaluating well conditions and to minimize the potential for the well to flow or kick;


(b) Have a person onsite during operations who represents your interests and can fulfill your responsibilities;


(c) Ensure that the toolpusher, operator’s representative, or a member of the rig crew maintains continuous surveillance on the rig floor from the beginning of operations until the well is completed or abandoned, unless you have secured the well with blowout preventers (BOPs), bridge plugs, cement plugs, or packers;


(d) Use personnel trained according to the provisions of subparts O and S of this part;


(e) Use and maintain equipment and materials necessary to ensure the safety and protection of personnel, equipment, natural resources, and the environment; and


(f) Use equipment that has been designed, tested, and rated for the maximum environmental and operational conditions to which it may be exposed while in service.


Rig Requirements

§ 250.710 What instructions must be given to personnel engaged in well operations?

Prior to engaging in well operations, personnel must be instructed in:


(a) Hazards and safety requirements. You must instruct your personnel regarding the safety requirements for the operations to be performed, possible hazards to be encountered, and general safety considerations to protect personnel, equipment, and the environment as required by subpart S of this part. The date and time of safety meetings must be recorded and available at the facility for review by BSEE representatives.


(b) Well control. You must prepare a well-control plan for each well. Each well-control plan must contain instructions for personnel about the use of each well-control component of your BOP, procedures that describe how personnel will seal the wellbore and shear pipe before maximum anticipated surface pressure (MASP) conditions are exceeded, assignments for each crew member, and a schedule for completion of each assignment. You must keep a copy of your well-control plan on the rig at all times, and make it available to BSEE upon request. You must post a copy of the well-control plan on the rig floor.


§ 250.711 What are the requirements for well-control drills?

You must conduct a weekly well-control drill with all personnel engaged in well operations. Your drill must familiarize personnel engaged in well operations with their roles and functions so that they can perform their duties promptly and efficiently as outlined in the well-control plan required by § 250.710.


(a) Timing of drills. You must conduct each drill during a period of activity that minimizes the risk to operations. The timing of your drills must cover a range of different operations, including drilling with a diverter, on-bottom drilling, and tripping. The same drill may not be repeated consecutively with the same crew.


(b) Recordkeeping requirements. For each drill, you must record the following in the daily report:


(1) Date, time, and type of drill conducted;


(2) The amount of time it took to be ready to close the diverter or use each well-control component of BOP system; and


(3) The total time to complete the entire drill.


(c) A BSEE ordered drill. A BSEE representative may require you to conduct a well-control drill during a BSEE inspection. The BSEE representative will consult with your onsite representative before requiring the drill.


§ 250.712 What rig unit movements must I report?

(a) You must report the movement of all rig units on and off locations to the District Manager using Form BSEE-0144, Rig Movement Notification Report. Rig units include MODUs, platform rigs, snubbing units, wire-line units used for non-routine operations, and coiled tubing units. You must inform the District Manager 24 hours before:


(1) The arrival of a rig unit on location;


(2) The movement of a rig unit to another slot. For movements that will occur less than 24 hours after initially moving onto location (e.g., coiled tubing and batch operations), you may include your anticipated movement schedule on Form BSEE-0144; or


(3) The departure of a rig unit from the location.


(b) You must provide the District Manager with the rig name, lease number, well number, and expected time of arrival or departure.


(c) If a MODU or platform rig is to be warm or cold stacked, you must inform the District Manager:


(1) Where the MODU or platform rig is coming from;


(2) The location where the MODU or platform rig will be positioned;


(3) Whether the MODU or platform rig will be manned or unmanned; and


(4) If the location for stacking the MODU or platform rig changes.


(d) Prior to resuming operations after stacking, you must notify the appropriate District Manager of any construction, repairs, or modifications associated with the drilling package made to the MODU or platform rig.


(e) If a drilling rig is entering OCS waters, you must inform the District Manager where the drilling rig is coming from.


(f) If you change your anticipated date for initially moving on or off location by more than 24 hours, you must submit an updated Form BSEE-0144, Rig Movement Notification Report.


(g) You are not required to report rig unit movements to and from the safe zone during the course of permitted operations.


(h) If a rig unit is already on a well, you are not required to report any additional rig unit movements on that well.


[81 FR 26022, Apr. 29, 2016, as amended at 84 FR 21976, May 15, 2019]


§ 250.713 What must I provide if I plan to use a mobile offshore drilling unit (MODU) for well operations?

If you plan to use a MODU for well operations, you must provide:


(a) Fitness requirements. Information and data to demonstrate the MODU’s capability to perform at the proposed location. This information must include the maximum environmental and operational conditions that the MODU is designed to withstand, including the minimum air gap necessary for both hurricane and non-hurricane seasons. If sufficient environmental information and data are not available at the time you submit your APD or APM, the District Manager may approve your APD or APM, but require you to collect and report this information during operations. Under this circumstance, the District Manager may revoke the approval of the APD or APM if information collected during operations shows that the MODU is not capable of performing at the proposed location.


(b) Foundation requirements. Information to show that site-specific soil and oceanographic conditions are capable of supporting the proposed bottom-founded MODU. If you provided sufficient site-specific information in your EP, DPP, or DOCD submitted to BOEM for that well location and conditions, you may reference that information. The District Manager may require you to conduct additional surveys and soil borings before approving the APD or APM if additional information is needed to make a determination that the conditions are capable of supporting the MODU, or equipment installed on a subsea wellhead. For a moored rig, you must submit a plat of the rig’s anchor pattern approved in your EP, DPP, or DOCD in your APD or APM.


(c) For frontier areas. (1) If the design of the MODU you plan to use in a frontier area is unique or has not been proven for use in the proposed environment, the District Manager may require you to submit a third-party review of the MODU design. If required, you must obtain a third-party review of your MODU similar to the process outlined in §§ 250.915 through 250.918. You may submit this information before submitting an APD or APM.


(2) If you plan to conduct operations in a frontier area, you must have a contingency plan that addresses design and operating limitations of the MODU. Your plan must identify the actions necessary to maintain safety and prevent damage to the environment. Actions must include the suspension, curtailment, or modification of operations to remedy various operational or environmental situations (e.g., vessel motion, riser offset, anchor tensions, wind speed, wave height, currents, icing or ice-loading, settling, tilt or lateral movement, resupply capability).


(d) Additional documentation. You must provide the current Certificate of Inspection (for U.S.-flag vessels) or Certificate of Compliance (for foreign-flag vessels) from the USCG and Certificate of Classification. You must also provide current documentation of any operational limitations imposed by an appropriate classification society.


(e) Dynamically positioned MODU. If you use a dynamically positioned MODU, you must include in your APD or APM your contingency plan for moving off location in an emergency situation. At a minimum, your plan must address emergency events caused by storms, currents, station-keeping failures, power failures, and losses of well control. The District Manager may require your plan to include additional events that may require movement of the MODU and other information needed to clarify or further address how the MODU will respond to emergencies or other events.


(f) Inspection of MODU. The MODU must be available for inspection by the District Manager before commencing operations and at any time during operations.


(g) Current monitoring. For water depths greater than 400 meters (1,312 feet), you must include in your APD or APM:


(1) A description of the specific current speeds that will cause you to implement rig shutdown, move-off procedures, or both; and


(2) A discussion of the specific measures you will take to curtail rig operations and move off location when such currents are encountered. You may use criteria, such as current velocities, riser angles, watch circles, and remaining rig power to describe when these procedures or measures will be implemented.


[81 FR 26022, Apr. 29, 2016, as amended at 81 FR 36150, June 6, 2016]


§ 250.714 Do I have to develop a dropped objects plan?

If you use a floating rig unit in an area with subsea infrastructure, you must develop a dropped objects plan and make it available to BSEE upon request. This plan must be updated as the infrastructure on the seafloor changes. Your plan must include:


(a) A description and plot of the path the rig will take while running and pulling the riser;


(b) A plat showing the location of any subsea wells, production equipment, pipelines, and any other identified debris;


(c) Modeling of a dropped object’s path with consideration given to metocean conditions for various material forms, such as a tubular (e.g., riser or casing) and box (e.g., BOP or tree);


(d) Communications, procedures, and delegated authorities established with the production host facility to shut-in any active subsea wells, equipment, or pipelines in the event of a dropped object; and


(e) Any additional information required by the District Manager as appropriate to clarify, update, or evaluate your dropped objects plan.


§ 250.715 Do I need a global positioning system (GPS) for all MODUs?

All MODUs must have a minimum of two functioning GPS transponders at all times, and you must provide to BSEE real-time access to the GPS data prior to and during each hurricane season.


(a) The GPS must be capable of monitoring the position and tracking the path in real-time if the MODU moves from its location during a severe storm.


(b) You must install and protect the tracking system’s equipment to minimize the risk of the system being disabled.


(c) You must place the GPS transponders in different locations for redundancy to minimize risk of system failure.


(d) Each GPS transponder must be capable of transmitting data for at least 7 days after a storm has passed.


(e) If the MODU is moved off location in the event of a storm, you must immediately begin to record the GPS location data.


(f) You must contact the Regional Office and allow real-time access to the MODU location data. When you contact the Regional Office, provide the following:


(1) Name of the lessee and operator with contact information;


(2) MODU name;


(3) Initial date and time; and


(4) How you will provide GPS real-time access.


Well Operations

§ 250.720 When and how must I secure a well?

(a) Whenever you interrupt operations, you must notify the District Manager. Before moving off the well, you must have two independent barriers installed, at least one of which must be a mechanical barrier, as approved by the District Manager. You must install the barriers at appropriate depths within a properly cemented casing string or liner. Before removing a subsea BOP stack or surface BOP stack on a mudline suspension well, you must conduct a negative pressure test in accordance with § 250.721.


(1) The events that would cause you to interrupt operations and notify the District Manager include, but are not limited to, the following:


(i) Evacuation of the rig crew;


(ii) Inability to keep the rig on location;


(iii) Repair to major rig or well-control equipment;


(iv) Observed flow outside the well’s casing (e.g., shallow water flow or bubbling); or


(v) Impending National Weather Service-named tropical storm or hurricane.


(2) The District Manager may approve alternate procedures or barriers, in accordance with § 250.141, if you do not have time to install the required barriers or if special circumstances occur.


(3) If you unlatch the BOP or LMRP:


(i) Upon relatch of the BOP, you must test according to § 250.734(b)(2), or


(ii) Upon relatch of the LMRP, you must test according to § 250.734(b)(3); and


(iii) You must submit a revised permit with a written statement from an independent third party certifying that the previous certification under § 250.731(c) remains valid and receive District Manager approval before resuming operations.


(b) Before you displace kill-weight fluid from the wellbore and/or riser, thereby creating an underbalanced state, you must obtain approval from the District Manager. To obtain approval, you must submit with your APD or APM your reasons for displacing the kill-weight fluid and provide detailed step-by-step written procedures describing how you will safely displace these fluids. The step-by-step displacement procedures must address the following:


(1) Number and type of independent barriers, as described in § 250.420(b)(3), that are in place for each flow path that requires such barriers;


(2) Tests you will conduct to ensure integrity of independent barriers;


(3) BOP procedures you will use while displacing kill-weight fluids; and


(4) Procedures you will use to monitor the volumes and rates of fluids entering and leaving the wellbore.


(c) For Arctic OCS exploratory drilling operations, in addition to the requirements of paragraphs (a) and (b) of this section:


(1) If you move your drilling rig off a well prior to completion or permanent abandonment, you must ensure that any equipment left on, near, or in a wellbore that has penetrated below the surface casing is positioned in a manner to:


(i) Protect the well head; and


(ii) Prevent or minimize the likelihood of compromising the down-hole integrity of the well or the effectiveness of the well plugs.


(2) In areas of ice scour you must use a well mudline cellar or an equivalent means of minimizing the risk of damage to the well head and wellbore. BSEE may approve an equivalent means that will meet or exceed the level of safety and environmental protection provided by a mudline cellar if the operator can show that utilizing a mudline cellar would compromise the stability of the rig, impede access to the well head during a well control event, or otherwise create operational risks.


(d) You must have the equipment used solely for intervention operations (e.g., tree interface tools) identified, readily available, properly maintained, and available for BSEE inspection upon request. This equipment is required for subsea completed wells with a tree installed, that meet the following conditions:


(1) Have a shut-in tubing pressure that is greater than the hydrostatic pressure of the water column, or


(2) Are not capable of having the annulus monitored.


[81 FR 26022, Apr. 29, 2016, as amended at 81 FR 46563, July 15, 2016; 84 FR 21976, May 15, 2019]


§ 250.721 What are the requirements for pressure testing casing and liners?

(a) You must test each casing string that extends to the wellhead according to the following table:


Casing type
Minimum test pressure
(1) Drive or Structural,Not required.
(2) Conductor, excluding subsea wellheads,250 psi.
(3) Surface, Intermediate, and Production,70 percent of its minimum internal yield.

(b) You must test each drilling liner and liner-top to a pressure at least equal to the anticipated leak-off pressure of the formation below that liner shoe, or subsequent liner shoes if set. You must conduct this test before you continue operations in the well.


(c) You must test each production liner and liner-top to a minimum of 500 psi above the formation fracture pressure at the casing shoe into which the liner is lapped.


(d) The District Manager may approve or require other casing test pressures as appropriate under the circumstances to ensure casing integrity.


(e) If you plan to produce a well, you must:


(1) For a well that is fully cased and cemented, pressure test the entire well to maximum anticipated shut-in tubing pressure, not to exceed 70% of the burst rating limit of the weakest component before perforating the casing or liner; or


(2) For an open-hole completion, pressure test the entire well to maximum anticipated shut-in tubing pressure, not to exceed 70% of the burst rating limit of the weakest component before you drill the open-hole section.


(f) You may not resume operations until you obtain a satisfactory pressure test. If the pressure declines more than 10 percent in a 30-minute test, or if there is another indication of a leak, you must submit to the District Manager for approval your proposed plans to re-cement, repair the casing or liner, or run additional casing/liner to provide a proper seal. Your submittal must include a PE certification of your proposed plans.


(g) You must perform a negative pressure test on all wells that use a subsea BOP stack or wells with mudline suspension systems.


(1) You must perform a negative pressure test on your final casing string or liner. This test must be conducted after setting your second barrier just above the shoe track, but prior to conducting any completion operations.


(2) You must perform a negative pressure test prior to unlatching the BOP at any point in the well. The negative pressure test must be performed on those components, at a minimum, that will be exposed to the negative differential pressure that will occur when the BOP is disconnected.


(3) The District Manager may require you to perform additional negative pressure tests on other casing strings or liners (e.g., intermediate casing string or liner) or on wells with a surface BOP stack as appropriate to demonstrate casing or liner integrity.


(4) You must submit for approval with your APD or APM, test procedures and criteria for a successful negative pressure test. If any of your test procedures or criteria for a successful test change, you must submit for approval the changes in a revised APD or APM.


(5) You must document all your test results and make them available to BSEE upon request.


(6) If you have any indication of a failed negative pressure test, such as, but not limited to, pressure buildup or observed flow, you must immediately investigate the cause. If your investigation confirms that a failure occurred during the negative pressure test, you must:


(i) Correct the problem and immediately notify the appropriate District Manager; and


(ii) Submit a description of the corrective action taken and receive approval from the appropriate District Manager for the retest.


(7) You must have two barriers in place, as described in § 250.420(b)(3), at any time and for any well, prior to performing the negative pressure test.


(8) You must include documentation of the successful negative pressure test in the End-of-Operations Report (Form BSEE-0125).


§ 250.722 What are the requirements for prolonged operations in a well?

If wellbore operations continue within a casing or liner for more than 30 days from the previous pressure test of the well’s casing or liner, you must:


(a) Stop operations as soon as practicable, and evaluate the effects of the prolonged operations on continued operations and the life of the well. At a minimum, you must:


(1) Evaluate the well casing with a pressure test, caliper tool, or imaging tool. On a case-by-case basis, the District Manager may require a specific method of evaluation of the effects on the well casing of prolonged operations; and


(2) Report the results of your evaluation to the District Manager and obtain approval of those results before resuming operations. Your report must include calculations that indicate the well’s integrity is above the minimum safety factors, if an imaging tool or caliper is used. District Manager approval is not required to resume operations if you conducted a successful pressure test as approved in your permit. You must document the successful pressure test in the WAR.


(b) If well integrity has deteriorated to a level below minimum safety factors, you must:


(1) Obtain approval from the District Manager to begin repairs or install additional casing. To obtain approval, you must also provide a PE certification showing that he or she reviewed and approved the proposed changes;


(2) Repair the casing or run another casing string; and


(3) Perform a pressure test after the repairs are made or additional casing is installed and report the results to the District Manager as specified in § 250.721.


[81 FR 26022, Apr. 29, 2016, as amended at 84 FR 21977, May 15, 2019]


§ 250.723 What additional safety measures must I take when I conduct operations on a platform that has producing wells or has other hydrocarbon flow?

You must take the following safety measures when you conduct operations with a rig unit on or jacked-up over a platform with producing wells or that has other hydrocarbon flow:


(a) The movement of rig units and related equipment on and off a platform or from well to well on the same platform, including rigging up and rigging down, must be conducted in a safe manner;


(b) You must install an emergency shutdown station for the production system near the rig operator’s console;


(c) You must shut-in all producible wells located in the affected wellbay below the surface and at the wellhead when:


(1) You move a rig unit or related equipment on and off a platform. This includes rigging up and rigging down activities within 500 feet of the affected platform;


(2) You move or skid a rig unit between wells on a platform; or


(3) A MODU moves within 500 feet of a platform. You may resume production once the MODU is in place, secured, and ready to begin operations.


(d) All wells in the same well-bay which are capable of producing hydrocarbons must be shut-in below the surface with a pump-through-type tubing plug and at the surface with a closed master valve prior to moving rig units and related equipment, unless otherwise approved by the District Manager.


(1) A closed surface-controlled subsurface safety valve of the pump-through-type may be used in lieu of the pump-through-type tubing plug provided that the surface control has been locked out of operation.


(2) The well to which a rig unit or related equipment is to be moved must be equipped with a back-pressure valve prior to removing the tree and installing and testing the BOP system.


(3) The well from which a rig unit or related equipment is to be moved must be equipped with a back pressure valve prior to removing the BOP system and installing the production tree.


(e) Coiled tubing units, snubbing units, or wireline units may be moved onto and off of a platform without shutting in wells.


[81 FR 26022, Apr. 29, 2016, as amended at 84 FR 21977, May 15, 2019]


§ 250.724 What are the real-time monitoring requirements?

(a) When conducting well operations with a subsea BOP or with a surface BOP on a floating facility, or when operating in an high pressure high temperature (HPHT) environment, you must gather and monitor real-time well data using an independent, automatic, and continuous monitoring system capable of recording, storing, and transmitting data regarding the following:


(1) The BOP control system;


(2) The well’s active fluid circulating system; and


(3) The well’s downhole conditions with the bottom hole assembly tools (if any tools are installed).


(b) You must transmit these data as they are gathered, barring unforeseeable or unpreventable interruptions in transmission, and have the capability to monitor the data, using qualified personnel in accordance with a real-time monitoring plan, as provided in paragraph (c) of this section.


(c) You must develop and implement a real-time monitoring plan. Your real-time monitoring plan, and all real-time monitoring data, must be made available to BSEE upon request. Your real-time monitoring plan must include the following:


(1) A description of your real-time monitoring capabilities, including the types of the data collected;


(2) A description of how your real-time monitoring data will be transmitted during operations, how the data will be labeled and monitored by qualified personnel, and how the data will be stored as required in §§ 250.740 and 250.741;


(3) A description of your procedures for providing BSEE access, upon request, to your real-time monitoring data;


(4) The qualifications of the personnel monitoring the data;


(5) Your procedures for, and methods of, communication between rig personnel and the monitoring personnel; and


(6) Actions to be taken if you lose any real-time monitoring capabilities or communications between rig personnel and monitoring personnel, and a protocol for how you will respond to any significant and/or prolonged interruption of monitoring capabilities or communications, including your protocol for notifying BSEE of any significant and/or prolonged interruptions.


[84 FR 21977, May 15, 2019]


Blowout Preventer (BOP) System Requirements

§ 250.730 What are the general requirements for BOP systems and system components?

(a) You must ensure that the BOP system and system components are designed, installed, maintained, inspected, tested, and used properly to ensure well control. The working-pressure rating of each BOP component (excluding annular(s)) must exceed MASP as defined for the operation. For a subsea BOP, the MASP must be determined at the mudline. The BOP system includes the BOP stack, control system, and any other associated system(s) and equipment. The BOP system and individual components must be able to perform their expected functions and be compatible with each other. Your BOP system must be capable of closing and sealing the wellbore in the event of flow due to a kick, including under anticipated flowing conditions for the specific well conditions, without losing ram closure time and sealing integrity due to the corrosiveness, volume, and abrasiveness of any fluids in the wellbore that the BOP system may encounter. Your BOP system must meet the following requirements:


(1) The BOP requirements of API Standard 53 (incorporated by reference in § 250.198) and the requirements of §§ 250.733 through 250.739. If there is a conflict between API Standard 53 and the requirements of this subpart, you must follow the requirements of this subpart.


(2) The provisions of the following industry standards (all incorporated by reference in § 250.198) that apply to BOP systems:


(i) ANSI/API Spec. 6A;


(ii) ANSI/API Spec. 16A;


(iii) ANSI/API Spec. 16C;


(iv) API Spec. 16D; and


(v) ANSI/API Spec. 17D.


(3) For surface and subsea BOPs, the pipe and variable bore rams installed in the BOP stack must be capable of effectively closing and sealing on the tubular body of any drill pipe, workstring, and tubing (excluding tubing with exterior control lines and flat packs) in the hole under MASP, as defined for the operation, at the proposed regulator settings of the BOP control system.


(4) The current set of approved schematic drawings must be available on the rig and at an onshore location. If you make any modifications to the BOP or control system that will require changes to your BSEE-approved schematic drawings, you must suspend operations until you obtain approval from the District Manager.


(b) You must ensure that the design, fabrication, maintenance, and repair of your BOP system is in accordance with the requirements contained in this part, applicable Original Equipment Manufacturer’s (OEM) recommendations unless otherwise directed by BSEE, and recognized engineering practices. The training and qualification of repair and maintenance personnel must meet or exceed applicable OEM training recommendations unless otherwise directed by BSEE.


(c) You must follow the failure reporting procedures contained in API Standard 53, (incorporated by reference in § 250.198), and:


(1) You must provide a written notice of equipment failure to the Chief, Office of Offshore Regulatory Programs (OORP), unless BSEE has designated a third party as provided in paragraph (c)(4) of this section, and the manufacturer of such equipment within 30 days after the discovery and identification of the failure. A failure is any condition that prevents the equipment from meeting the functional specification.


(2) You must ensure that an investigation and a failure analysis are started within 120 days of the failure to determine the cause of the failure, and are completed within 120 days upon starting the investigation and failure analysis. You must also ensure that the results and any corrective action are documented. You must ensure that the analysis report is submitted to the Chief OORP, unless BSEE has designated a third party as provided in paragraph (c)(4) of this section, as well as the manufacturer. If you cannot complete the investigation and analysis within the specified time, you must submit an extension request detailing how you will complete the investigation and analysis to BSEE for approval. You must submit the extension request to the Chief, OORP.


(3) If the equipment manufacturer notifies you that it has changed the design of the equipment that failed or if you have changed operating or repair procedures as a result of a failure, then you must, within 30 days of such changes, report the design change or modified procedures in writing to the Chief OORP, unless BSEE has designated a third party as provided in paragraph (c)(4) of this section.


(4) Submit notices and reports to the Chief, Office of Offshore Regulatory Programs; Bureau of Safety and Environmental Enforcement; 45600 Woodland Road, Sterling, Virginia 20166. BSEE may designate a third party to receive the data and reports on behalf of BSEE. If BSEE designates a third party, you must submit the data and reports to the designated third party.


(d) If you plan to use a BOP stack manufactured after the effective date of this regulation, you must use one manufactured pursuant to an ANSI/API Spec. Q1 (as incorporated by reference in § 250.198) quality management system. Such quality management system must be certified by an entity that meets the requirements of ISO/IEC 17021-1 (as incorporated by reference in § 250.198).


(1) BSEE may consider accepting equipment manufactured under quality assurance programs other than ANSI/API Spec. Q1, provided you submit a request to the Chief, OORP for approval, containing relevant information about the alternative program.


(2) You must submit this request to the Chief, OORP; Bureau of Safety and Environmental Enforcement; 45600 Woodland Road, Sterling, Virginia 20166.


[84 FR 21977, May 15, 2019]


§ 250.731 What information must I submit for BOP systems and system components?

For any operation that requires the use of a BOP, you must include the information listed in this section with your applicable APD, APM, or other submittal. You are required to submit this information only once for each well, unless the information changes from what you provided in an earlier approved submission or you have moved off location from the well. After you have submitted this information for a particular well, subsequent APMs or other submittals for the well should reference the approved submittal containing the information required by this section and confirm that the information remains accurate and that you have not moved off location from that well. If the information changes or you have moved off location from the well, you must submit updated information in your next submission.


You must submit:
Including:
(a) A complete description of the BOP system and system components,(1) Pressure ratings of BOP equipment;
(2) Proposed BOP test pressures (for subsea BOPs, include both surface and corresponding subsea pressures);
(3) Rated capacities for liquid and gas for the fluid-gas separator system;
(4) Control fluid volumes needed to close, seal, and open each component;
(5) Control system pressure and regulator settings needed to close each ram BOP under MASP as defined for the operation;
(6) Number and volume of accumulator bottles and bottle banks (for subsea BOP, include both surface and subsea bottles);
(7) Accumulator pre-charge calculations (for subsea BOP, include both surface and subsea calculations);
(8) All locking devices; and
(9) Control fluid volume calculations for the accumulator system (for a subsea BOP system, include both the surface and subsea volumes).
(b) Schematic drawings,(1) The inside diameter of the BOP stack;
(2) Number and type of preventers (including blade type for shear ram(s));
(3) All locking devices;
(4) Size range for variable bore ram(s);
(5) Size of fixed ram(s);
(6) All control systems with all alarms and set points labeled, including pods;
(7) Location and size of choke and kill lines (and gas bleed line(s) for subsea BOP);
(8) Associated valves of the BOP system;
(9) Control station locations; and
(10) A cross-section of the riser for a subsea BOP system showing number, size, and labeling of all control, supply, choke, and kill lines down to the BOP.
(c) Certification by an independent third party,Verification that:

(1) Test data demonstrate the shear ram(s) will shear the drill pipe at the water depth as required in § 250.732;

(2) The BOP was designed, tested, and maintained to perform under the maximum environmental and operational conditions anticipated to occur at the well;

(3) The accumulator system has sufficient fluid to operate the BOP system without assistance from the charging system; and

(4) If using a subsea BOP, a BOP in an HPHT environment as defined in § 250.804(b), or a surface BOP on a floating facility, the BOP has not been compromised or damaged from previous service.
(d) If you are using a subsea BOP, descriptions of autoshear, deadman, and emergency disconnect sequence (EDS) systems,A listing of the functions with their sequences and timing.

[81 FR 26022, Apr. 29, 2016, as amended at 84 FR 21978, May 15, 2019]


§ 250.732 What are the independent third party requirements for BOP systems and system components?

(a) Prior to beginning any operation requiring the use of any BOP, you must submit verification by an independent third party and supporting documentation as required by this paragraph to the appropriate District Manager and Regional Supervisor.


You must submit verification and documentation related to:
That:
(1) Shear testing,(i) Demonstrates that the BOP will shear the tubular body of any drill pipe (excluding tool joints, bottom-hole tools, and bottom hole assemblies such as heavy-weight pipe or collars), workstring, tubing and associated exterior control lines and any electric-, wire-, and slick-line to be used in the well;
(ii) Demonstrates the use of test protocols and analysis that represent recognized engineering practices for ensuring the repeatability and reproducibility of the tests, and that the testing was performed by a facility that meets generally accepted quality assurance standards;
(iii) Provides a reasonable representation of field applications, taking into consideration the physical and mechanical properties of the tubular body of any drill pipe (excluding tool joints, bottom-hole tools, and bottom hole assemblies such as heavy-weight pipe or collars), workstring, tubing and associated exterior control lines and any electric-, wire-, and slick-line to be used in the well;
(iv) Ensures testing was performed on the outermost edges of the shearing blades of the shear ram;
(v) Demonstrates the shearing capacity of the BOP equipment to the physical and mechanical properties of the tubular body of any drill pipe (excluding tool joints, bottom-hole tools, and bottom hole assemblies such as heavy-weight pipe or collars), workstring, tubing and associated exterior control lines and any electric-, wire-, and slick-line to be used in the well; and
(vi) Includes relevant testing results.
(2) Pressure integrity testing for sealing components, and(i) Shows that testing is conducted after the shearing is completed and prior to opening the component;
(ii) Demonstrates that the equipment will seal at the rated working pressures (RWP) of the BOP for 5 minutes; and
(iii) Includes all relevant test results.
(3) CalculationsInclude shearing and sealing pressures for all pipe to be used in the well including corrections for MASP.

(b) The independent third-party must be a technical classification society, a licensed professional engineering firm, or a registered professional engineer capable of providing the required certifications and verifications.


(c) For wells in an HPHT environment, as defined by § 250.804(b), you must submit verification by an independent third party that it conducted a comprehensive review of the BOP system and related equipment you propose to use. You must provide the independent third party access to any facility associated with the BOP system or related equipment during the review process. You must submit the verifications required by this paragraph (c) to the appropriate District Manager and Regional Supervisor before you begin any operations in an HPHT environment with the proposed equipment.


You must submit:
Including:
(1) Verification that the independent third party conducted a detailed review of the design package to ensure that all critical components and systems meet recognized engineering practices,
(2) Verification that the designs of individual components and the overall system have been proven in a testing process that demonstrates the performance and reliability of the equipment in a manner that is repeatable and reproducible,(i) Identification of all reasonable potential modes of failure; and

(ii) Evaluation of the design verification tests. The design verification tests must assess the equipment for the identified potential modes of failure.
(3) Verification that the BOP equipment will perform as designed in the temperature, pressure, and environment that will be encountered, and
(4) Verification that the fabrication, manufacture, and assembly of individual components and the overall system uses recognized engineering practices and quality control and assurance mechanisms.For the quality control and assurance mechanisms, complete material and quality controls over all contractors, subcontractors, distributors, and suppliers at every stage in the fabrication, manufacture, and assembly process.

(d) You must make all documentation that demonstrates compliance with the requirements of this section available to BSEE upon request.


[84 FR 21978, May 15, 2019]


§ 250.733 What are the requirements for a surface BOP stack?

(a) When you drill or conduct operations with a surface BOP stack, you must install the BOP system before drilling or conducting operations to deepen the well below the surface casing and after the well is deepened below the surface casing point. The surface BOP stack must include at least four remote-controlled, hydraulically operated BOPs, consisting of one annular BOP, one BOP equipped with blind shear rams, and two BOPs equipped with pipe rams.


(1) The blind shear rams must be capable of shearing at any point along the tubular body of any drill pipe (excluding tool joints, bottom-hole tools, and bottom hole assemblies that include heavy-weight pipe or collars), workstring, tubing and associated exterior control lines, and any electric-, wire-, and slick-line that is in the hole and sealing the wellbore after shearing. Prior to April 29, 2021, if your blind shear rams are unable to cut any electric-, wire-, or slick-line under MASP as defined for the operation and seal the wellbore, you must use an alternative cutting device capable of shearing the lines before closing the BOP. This device must be available on the rig floor during operations that require their use.


(2) The two BOPs equipped with pipe rams must be capable of closing and sealing on the tubular body of any drill pipe, workstring, and tubing under MASP, as defined for the operation, except for tubing with exterior control lines and flat packs, a bottom hole assembly that includes heavy-weight pipe or collars, and bottom-hole tools.


(b) If you plan to use a surface BOP on a floating production facility you must:


(1) On new floating production facilities installed after April 29, 2021, that include a surface BOP, follow the BOP requirements in § 250.734(a)(1).


(2) For risers installed after July 28, 2016, use a dual bore riser configuration before drilling or operating in any hole section or interval where hydrocarbons are, or may be, exposed to the well. The dual bore riser must meet the design requirements of API RP 2RD (as incorporated by reference in § 250.198), including appropriate design for the maximum anticipated operating and environmental conditions.


(i) For a dual bore riser configuration, the annulus between the risers must be monitored for pressure during operations. You must describe in your APD or APM your annulus monitoring plan and how you will secure the well in the event a leak is detected.


(ii) The inner riser for a dual riser configuration is subject to the requirements at § 250.721 for testing the casing or liner.


(c) You must install separate side outlets on the BOP stack for the kill and choke lines. If your stack does not have side outlets, you must install a drilling spool with side outlets. The outlet valves must hold pressure from both directions.


(d) You must install a choke and a kill line on the BOP stack. You must equip each line with two full-bore, full-opening valves, one of which must be remote-controlled. On the kill line, you may install a check valve and a manual valve instead of the remote-controlled valve. To use this configuration, both manual valves must be readily accessible and you must install the check valve between the manual valves and the pump.


(e) Additional requirements for surface BOP systems used in well-completion, workover, and decommissioning operations. The minimum BOP system for well-completion, workover, and decommissioning operations must meet the appropriate standards from the following table:


When . . .
The minimum BOP stack must include . . .
(1) The expected pressure is less than 5,000 psi,Three BOPs consisting of an annular, one set of pipe rams, and one set of blind-shear rams.
(2) The expected pressure is 5,000 psi or greater or you use multiple tubing strings,Four BOPs consisting of an annular, two sets of pipe rams, and one set of blind-shear rams.
(3) You handle multiple tubing strings simultaneously,Four BOPs consisting of an annular, one set of pipe rams, one set of dual pipe rams, and one set of blind-shear rams.
(4) You use a tapered drill pipe, work string, or tubing,At least one set of pipe rams that are capable of sealing around each size of drill pipe, work string, or tubing. If the expected pressure is greater than 5,000 psi, then you must have at least two sets of pipe rams that are capable of sealing around the larger size drill pipe, work string, or tubing. You may substitute one set of variable bore rams for two sets of pipe rams.
(5) You use a surface BOP on a floating facility,The elements required by § 250.733(b)(1) of this part.

[81 FR 26022, Apr. 29, 2016, as amended at 84 FR 21979, May 15, 2019]


§ 250.734 What are the requirements for a subsea BOP system?

(a) When you drill or conduct operations with a subsea BOP system, you must install the BOP system before drilling to deepen the well below the surface casing or before conducting operations if the well is already deepened beyond the surface casing point. The District Manager may require you to install a subsea BOP system before drilling or conducting operations below the conductor casing if proposed casing setting depths or local geology indicate the need. The following table outlines your requirements.


When operating with a subsea BOP system, you must:
Additional requirements:
(1) Have at least five remote-controlled, hydraulically operated BOPs;You must have at least one annular BOP, two BOPs equipped with pipe rams, and two BOPs equipped with shear rams. For the dual ram requirement, you must comply with this requirement no later than April 29, 2021.
(i) Both BOPs equipped with pipe rams must be capable of closing and sealing on the tubular body of any drill pipe, workstring, and tubing under MASP, as defined for the operation, except tubing with exterior control lines and flat packs, a bottom hole assembly that includes heavy-weight pipe or collars, and bottom-hole tools.
(ii) Both shear rams must be capable of shearing at any point along the tubular body of any drill pipe (excluding tool joints, bottom-hole tools, and bottom hole assemblies such as heavy-weight pipe or collars), workstring, tubing and associated exterior control lines, appropriate area for the liner or casing landing string, shear sub on subsea test tree, and any electric-, wire-, slick-line in the hole; under MASP. At least one shear ram must be capable of sealing the wellbore after shearing under MASP conditions as defined for the operation. Any non-sealing shear ram(s) must be installed below a sealing shear ram(s).
(2) Have an operable redundant pod control system to ensure proper and independent operation of the BOP system;
(3) Have the accumulator capacity, to provide fast closure of the BOP components and to operate all critical functions;The accumulator capacity must:

(i) Close each required shear ram, ram locks, one pipe ram, and disconnect the LMRP.

(ii) Have the capability to perform ROV functions within the required times outlined in API Standard 53 with ROV or flying leads.

(iii) Have bottles located subsea for the autoshear and deadman (which may be shared between those two systems) to secure the wellbore. These bottles may also be utilized to perform the secondary control system functions (e.g., ROV or acoustic functions).

(iv) Perform under MASP conditions as defined for the operation.
(4) Have a subsea BOP stack equipped with remotely operated vehicle (ROV) intervention capability;You must have the ROV intervention capability to close each shear ram, ram locks, one pipe ram, and disconnect the LMRP under MASP conditions as defined for the operation. You must be capable of performing these functions in the response times outlined in API Standard 53 (as incorporated by reference in § 250.198). The ROV panels on the BOP and LMRP must be compliant with API RP 17H (as incorporated by reference in § 250.198).

(5) Maintain an ROV and have a trained ROV crew on each rig unit on a continuous basis once BOP deployment has been initiated from the rig until recovered to the surface. The ROV crew must examine all ROV-related well-control equipment (both surface and subsea) to ensure that it is properly maintained and capable of carrying out appropriate tasks during emergency operations;The crew must be trained in the operation of the ROV. The training must include simulator training on stabbing into an ROV intervention panel on a subsea BOP stack. The ROV crew must be in communication with designated rig personnel who are knowledgeable about the BOP’s capabilities.

(6) Provide autoshear, deadman, and EDS systems for dynamically positioned rigs; provide autoshear and deadman systems for moored rigs;(i) Autoshear system means a safety system that is designed to automatically shut-in the wellbore in the event of a disconnect of the LMRP. This is considered a rapid discharge system.
(ii) Deadman system means a safety system that is designed to automatically shut-in the wellbore in the event of a simultaneous absence of hydraulic supply and signal transmission capacity in both subsea control pods. This is considered a rapid discharge system.
(iii) Emergency Disconnect Sequence (EDS) system means a safety system that is designed to be manually activated to shut-in the wellbore and disconnect the LMRP in the event of an emergency situation. This is considered a rapid discharge system.
(iv) Autoshear/deadman functions and an EDS mode must close, at a minimum, two shear rams in sequence and be capable of performing their expected shearing and sealing action under MASP conditions as defined for the operation.
(v) Your sequencing must allow a sufficient delay when closing your two shear rams in order to provide maximum sealing efficiency.
(7) Demonstrate that any acoustic control system will function in the proposed environment and conditions;If you choose to use an acoustic control system in addition to the autoshear, deadman, and EDS requirements, you must demonstrate to the District Manager, as part of the information submitted under § 250.731, that the acoustic control system will function in the proposed environment and conditions. The District Manager may require additional information as appropriate to clarify or evaluate the acoustic control system information provided in your demonstration.
(8) Have operational or physical barrier(s) on BOP control panels to prevent accidental disconnect functions;You must incorporate enable buttons, or a similar feature, on control panels to ensure two-handed operation for all critical functions.
(9) Clearly label all control panels for the subsea BOP system;Label other BOP control panels, such as hydraulic control panel.
(10) Develop and use a management system for operating the BOP system, including the prevention of accidental or unplanned disconnects of the system;The management system must include written procedures for operating the BOP stack and LMRP (including proper techniques to prevent accidental disconnection of these components) and minimum knowledge requirements for personnel authorized to operate and maintain BOP components.
(11) Establish minimum requirements for personnel authorized to operate critical BOP equipment;Personnel must have:

(i) Training in deepwater well-control theory and practice according to the requirements of Subparts O and S; and

(ii) A comprehensive knowledge of BOP hardware and control systems.
(12) Before removing the marine riser, displace the fluid in the riser with seawater;You must maintain sufficient hydrostatic pressure or take other suitable precautions to compensate for the reduction in pressure and to maintain a safe and controlled well condition. You must follow the requirements of § 250.720(b).
(13) Install the BOP stack in a well cellar when in an ice-scour area;Your well cellar must be deep enough to ensure that the top of the stack is below the deepest probable ice-scour depth.
(14) Install at least two side outlets for a choke line and two side outlets for a kill line;(i) If your stack does not have side outlets, you must install a drilling spool with side outlets.

(ii) Each side outlet must have two full-bore, full-opening valves.

(iii) The valves must hold pressure from both directions and must be remote-controlled.

iv) You must install a side outlet below the lowest sealing shear ram. You may have a pipe ram or rams between the shearing ram and side outlet.
(15) Install a gas bleed line with two valves for the annular preventer no later than April 30, 2018;(i) The valves must hold pressure from both directions;

(ii) If you have dual annulars, you must install the gas bleed line below the upper annular.
(16) Use a BOP system that has the following mechanisms and capabilities;(i) No later than May 1, 2023, you must have the capability to position the entire pipe completely within the area of the shearing blade. This capability cannot be a separate ram BOP or annular preventer, but you may use those during a planned shear.

(ii) If your control pods contain a subsea electronic module with batteries, a mechanism for personnel on the rig to monitor the state of charge of the subsea electronic module batteries in the BOP control pods.

(b) If you suspend operations to make repairs to any part of the subsea BOP system, you must stop operations at a safe downhole location. Before resuming operations you must:


(1) Submit a revised permit with a written statement from an independent third party documenting the repairs and certifying that the previous certification in § 250.731(c) remains valid;


(2) Upon relatch of the BOP, perform an initial subsea BOP test in accordance with § 250.737(d)(4), including deadman in accordance with § 250.737(d)(12)(vi). If repairs take longer than 30 days, once the BOP is on deck, you must test in accordance with the requirements of § 250.737;


(3) Upon relatch of the LMRP, you must test according to the following:


(i) Pressure test riser connector/gasket in accordance with § 250.737(b) and (c);


(ii) Pressure test choke and kill stabs at LMRP/BOP interface in accordance with § 250.737(b) and (c);


(iii) Full function test of both pods and both control panels;


(iv) Verify acoustic pod communication (if equipped); and


(v) Deadman test with pressure test in accordance with § 250.737(d)(12)(vi).


(4) Receive approval from the District Manager.


(c) If you plan to drill a new well with a subsea BOP, you do not need to submit with your APD the verifications required by this subpart for the open water drilling operation. Before drilling out the surface casing, you must submit for approval a revised APD, including the verifications required in this subpart.


[81 FR 26022, Apr. 29, 2016, as amended at 84 FR 21980, May 15, 2019]


§ 250.735 What associated systems and related equipment must all BOP systems include?

All BOP systems must include the following associated systems and related equipment:


(a) An accumulator system (as specified in API Standard 53, incorporated by reference in § 250.198). Your accumulator system must have the fluid volume capacity and appropriate pre-charge pressures in accordance with API Standard 53. If you supply the accumulator regulators by rig air and do not have a secondary source of pneumatic supply, you must equip the regulators with manual overrides or other devices to ensure capability of hydraulic operations if rig air is lost;


(b) An automatic backup to the primary accumulator-charging system. The power source must be independent from the power source for the primary accumulator-charging system. The independent power source must possess sufficient capability to close and hold closed all BOP components under MASP conditions as defined for the operation;


(c) At least two full BOP control stations. One station must be on the rig floor. You must locate the other station in a readily accessible location away from the rig floor;


(d) The choke line(s) installed above the bottom well-control ram;


(e) The kill line must be installed beneath at least one well-control ram, and may be installed below the bottom ram;


(f) A fill-up line above the uppermost BOP;


(g) Locking devices for all BOP sealing rams (i.e., blind shear rams, pipe rams and variable bore rams), as follows:


(1) For subsea BOPs, hydraulic locking devices must be installed on all sealing rams;


(2) For surface BOPs:


(i) Remotely-operated locking devices must be installed on blind shear rams no later than April 29, 2019;


(ii) Manual or remotely-operated locking devices must be installed on pipe rams and variable bore rams; and


(h) A wellhead assembly with a RWP that exceeds the maximum anticipated wellhead pressure.


[81 FR 26022, Apr. 29, 2016, as amended at 84 FR 21981, May 15, 2019]


§ 250.736 What are the requirements for choke manifolds, kelly-type valves inside BOPs, and drill string safety valves?

(a) Your BOP system must include a choke manifold that is suitable for the anticipated surface pressures, anticipated methods of well control, the surrounding environment, and the corrosiveness, volume, and abrasiveness of drilling fluids and well fluids that you may encounter.


(b) Choke manifold components must have a RWP at least as great as the RWP of the ram BOPs. If your choke manifold has buffer tanks downstream of choke assemblies, you must install isolation valves on any bleed lines.


(c) Valves, pipes, flexible steel hoses, and other fittings upstream of the choke manifold must have a RWP at least as great as the RWP of the ram BOPs.


(d) You must use the following BOP equipment with a RWP and temperature of at least as great as the working pressure and temperature of the ram BOP during all operations:


(1) The applicable kelly-type valves as described in API Standard 53 (incorporated by reference in § 250.198);


(2) On a top-drive system equipped with a remote-controlled valve, a strippable kelly-type valve must be installed below the remote-controlled valve;


(3) An inside BOP in the open position located on the rig floor. You must be able to install an inside BOP for each size connection in the pipe;


(4) A drill string safety valve in the open position located on the rig floor. You must have a drill-string safety valve available for each size connection in the pipe;


(5) When running casing, a safety valve in the open position available on the rig floor to fit the casing string being run in the hole. For subsea BOPs, the safety valve must be available on the rig floor if the length of casing being run exceeds the water depth, which would result in the casing being across the BOP stack and the rig floor prior to crossing over to the drill pipe running string;


(6) All required manual and remote- controlled kelly-type valves, drill-string safety valves, and comparable-type valves (i.e., kelly-type valve in a top-drive system) that are essentially full opening; and


(7) A wrench to fit each manual valve. Each wrench must be readily accessible to the drilling crew.


[81 FR 26022, Apr. 29, 2016, as amended at 84 FR 21981, May 15, 2019]


§ 250.737 What are the BOP system testing requirements?

Your BOP system (this includes the choke manifold, kelly-type valves, inside BOP, and drill string safety valve) must meet the following testing requirements:


(a) Pressure test frequency. You must pressure test your BOP system:


(1) When installed;


(2) Before 14 days have elapsed since your last BOP pressure test, or 30 days since your last blind shear ram BOP pressure test. You must begin to test your BOP system before midnight on the 14th day (or 30th day for your blind shear rams) following the conclusion of the previous test;


(3) Before drilling out each string of casing or a liner. You may omit this pressure test requirement if you did not remove the BOP stack to run the casing string or liner, the required BOP test pressures for the next section of the hole are not greater than the test pressures for the previous BOP test, and the time elapsed between tests has not exceeded 14 days (or 30 days for blind shear rams). You must indicate in your APD which casing strings and liners meet these criteria;


(4) In lieu of meeting the schedule established in paragraph (a)(2) of this section, you may request that BSEE approve a 21-day BOP testing frequency. To obtain BSEE approval, you must submit a request to the appropriate BSEE Regional Supervisor, District Field Operations. Your request must demonstrate that you have developed a BOP health monitoring plan that includes certain system capabilities. As long as your plan is consistent with recognized engineering and industry practice, BSEE will approve your request if it includes the following:


(i) Condition monitoring tools, including continuous surveillance of sensor readings from the BOP control system, real-time condition analysis and displays, functional pressure signal analysis, historical sensor data;


(ii) Failure propagation analysis;


(iii) A failure tracking and resolution system that includes detailed failure reports and identification of recurring problems; and


(iv) Submission of quarterly reports of the data collected pursuant to paragraphs (a)(4)(i)(iii) to the BSEE Regional Supervisor, District Field Operations.


(5) The District Manager may require more frequent testing if conditions or your BOP performance warrant.


(b) Pressure test procedures. When you pressure test the BOP system, you must conduct a low-pressure test and a high-pressure test for each BOP component (excluding test rams and non-sealing shear rams). You must begin each test by conducting the low-pressure test then transition to the high-pressure test. Each individual pressure test must hold pressure long enough to demonstrate the tested component(s) holds the required pressure. The table in this paragraph (b) outlines your pressure test requirements.


You must conduct a . . .
According to the following procedures . . .
(1) Low-pressure testAll low-pressure tests must be between 250 and 350 psi. Any initial pressure above 350 psi must be bled back to a pressure between 250 and 350 psi before starting the test. If the initial pressure exceeds 500 psi, you must bleed back to zero and reinitiate the test.
(2) High-pressure test for blind shear ram-type BOPs, ram-type BOPs, the choke manifold, outside of all choke and kill side outlet valves (and annular gas bleed valves for subsea BOP), inside of all choke and kill side outlet valves below uppermost ram, and other BOP components(i) The high-pressure test must equal the RWP of the equipment or be 500 psi greater than your calculated MASP, as defined for the operation for the applicable section of hole. Before you may test BOP equipment to the MASP plus 500 psi, the District Manager must have approved those test pressures in your permit.

(ii) The blind shear ram (BSR) must be tested to:

(A) MASP plus 500 psi for the hole section to which it is exposed; or

(B) Full well MASP plus 500 psi on initial latch up and all subsequent BSR pressure tests can be done to the casing/liner test pressure for the applicable hole section.

(iii) The choke and kill side outlet valves must be tested to, except as provided in paragraph (d)(13) of this section:

(A) MASP plus 500 psi for the hole section to which it is exposed; or

(B) Full well MASP plus 500 psi on initial latch up and all subsequent pressure tests can be done to the casing/liner test pressure for the applicable hole section.
(3) High-pressure test for annular-type BOPs, inside of choke or kill valves (and annular gas bleed valves for subsea BOP) above the uppermost ram BOPThe high pressure test must equal 70 percent of the RWP of the equipment or be 500 psi greater than your calculated MASP, as defined for the operation for the applicable section of hole. Before you may test BOP equipment to the MASP plus 500 psi, the District Manager must have approved those test pressures in your APD or APM.

(c) Duration of pressure test. Each test must hold the required pressure for 5 minutes, which must be recorded on a chart not exceeding 4 hours, or on a digital recorder. However, for surface BOP systems and surface equipment of a subsea BOP system, a 3-minute test duration is acceptable if recorded on a chart not exceeding 4 hours, or on a digital recorder. The recorded test pressures must be within the middle half of the chart range, i.e., cannot be within the lower or upper one-fourth of the chart range. If the equipment does not hold the required pressure during a test, you must correct the problem and retest the affected component(s).


(d) Additional test requirements. You must meet the following additional BOP testing requirements:


You must . . .
Additional requirements . . .
(1) Follow the testing requirements of API Standard 53 (as incorporated in § 250.198)If there is a conflict between API Standard 53, testing requirements and this section, you must follow the requirements of this section.
(2) Use water to test a surface BOP system on the initial test. You may use drilling/completion/workover fluids to conduct subsequent tests of a surface BOP system(i) You must submit test procedures with your APD or APM for District Manager approval.

(ii) Contact the District Manager at least 72 hours prior to beginning the initial test to allow BSEE representative(s) to witness testing.
(3) Stump test a subsea BOP system before installation(i) You must use water to conduct this test. You may use drilling/completion/workover fluids to conduct subsequent tests of a subsea BOP system.
(ii) You must submit test procedures with your APD or APM for District Manager approval
(iii) Contact the District Manager at least 72 hours prior to beginning the stump test to allow BSEE representative(s) to witness testing.
(iv) You must verify closure of all ROV intervention functions on your subsea BOP stack during the stump test.
(v) You must follow paragraphs (b) and (c) of this section. Pressure testing of each ram and annular component is only required once.
(4) Perform an initial subsea BOP test
(i) You must begin the initial subsea BOP test on the seafloor within 30 days of the stump test.
(ii) You must submit test procedures with your APD or APM for District Manager approval.
(iii) You must pressure test well-control rams and annulars according to paragraphs (b) and (c) of this section.
(iv) You must notify the District Manager at least 72 hours prior to beginning the initial subsea test for the BOP system to allow BSEE representative(s) to witness testing.
(v) You must test and verify closure of at least one set of rams during the initial subsea test through a ROV hot stab. You must confirm closure of the selected ram through the ROV hot stab with a 1,000 psi pressure test for 5 minutes.