The U.S. government agency created after the 2010 Deepwater Horizon oil spill plans in coming weeks to unveil tougher financial requirements for offshore oil producers aimed at protecting taxpayers from the risk of cleaning up abandoned oil rigs, Reuters reported yesterday. Under the new guidelines, the Bureau of Ocean Energy Management (BOEM) will demand additional guarantees to cover producers' legal obligation to plug offshore wells and dismantle rigs in the Outer Continental Shelf once they have extracted oil and gas, according to Renee Orr, chief of Strategic Resources at the agency. Currently, companies are exempt from providing supplemental bonds for the cleanup-process, known as decommissioning, if the total estimated liability is less than half of their net worth. The stricter bonding rules, which will demand more capital of more companies, were proposed by the federal agency in September and will be implemented this year, Orr said. They follow more than 80 bankruptcy filings by North American oil and gas producers since the beginning of 2015, when plunging oil prices gripped the sector, triggering concerns at the agency that companies would walk away from clean-ups. Read more.
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