Moratorium NTL

OMB Control Number: 1010-xxxx

OMB Expiration Date: xx/xx/xxxx

UNITED STATES DEPARTMENT OF THE INTERIOR

MINERALS MANAGEMENT SERVICE

NTL No. 2010-N04 Effective Date: May 30, 2010

NATIONAL NOTICE TO LESSEES AND OPERATORS (NTL) OF FEDERAL OIL AND GAS LEASES IN THE OUTER CONTINENTAL SHELF (OCS)

To Implement the Directive to Impose a Moratorium on All Drilling of Deepwater Wells

Background

The events resulting from the April 20, 2010, Deepwater Horizon included the deaths of 11 people, and an oil spill of national significance that continues to harm the marine ecosystem, wildlife, and property along the Gulf Coast. Although the causes are still under investigation, these events highlight the importance of ensuring safe operations on the Outer Continental Shelf (OCS).

Directives

The Six-Month Deepwater Moratorium as set forth in this Notice to Lessees and Operators (Moratorium NTL) directs you to cease drilling all new deepwater wells, including any wellbore sidetracks and bypasses; prohibits you from spudding any new deepwater wells; and puts you on notice that, except as provided herein, MMS will not consider for six months from the date of this Moratorium NTL drilling permits for deepwater wells and for related activities as set forth herein. For the purposes of this Moratorium NTL, deepwater means depths greater than 500 feet.

If you are currently drilling any well covered by this Moratorium NTL, you must proceed at the next safe opportunity to secure the well and take all necessary steps to cease operations and temporarily abandon or close the well until you receive further guidance from the Regional Supervisor for Field Operations. You must submit to the appropriate District Manager your plans to stop operations and secure the well before 5:00 pm EDT, June 1, 2010.

If you have an approved Application for a Permit to Drill (APD) or other required permit for wells covered by this Moratorium NTL, but have not spud the well, you may not start drilling for the duration of this Moratorium NTL.

Under 30 CFR 250.172, the Regional Supervisor for Production and Development will issue Suspensions of Operations (SOO) to all OCS Lessees and Operators currently drilling or proposing to drill new deepwater wells consistent with this Moratorium NTL.

Findings

This Moratorium NTL is based on a May 28, 2010, Memorandum from the Secretary of the Interior to the Director of the MMS finding that, under current conditions, deepwater drilling poses an unacceptable threat of serious and irreparable harm or damage to wildlife and the marine, coastal and human environment , as set forth in 30 CFR 250.172(b). The Secretary also determined that the installation of additional safety or environmental protection equipment is necessary to prevent injury or loss of life and damage to property and the environment, as set forth in 30 CFR 250.172(c).

The Secretary’s determination that deepwater drilling activities on new wells must cease for six months, and that MMS will not process permits for such activities accordingly, is based on the recommendations in the May 27, 2010, Report from the Secretary of the Interior to the President, Increased Safety Measures for Energy Development on the Outer Continental Shelf (Report).

Based on the Secretary’s May 28, 2010, Memorandum, the recommendations in the Report, and the authority of 30 CFR 250.172, the Director of MMS has determined that this Moratorium NTL is warranted because of the significant risks of OCS drilling in deepwater without implementation of the safety equipment, practices and procedures recommended in the Report.

Therefore, under 30 CFR 250.172, the Regional Supervisor for Production and Development will issue SOOs to all OCS Lessees and Operators currently drilling or proposing to drill new deepwater wells covered by this Moratorium NTL.

Activities Not Affected by This Moratorium NTL

• This Moratorium NTL does not apply to intervention or relief wells for emergency purposes, including the 2 relief wells related to the ongoing BP spill.

• This Moratorium NTL does not apply to operations that are necessary to sustain reservoir pressure from production wells.

• This Moratorium NTL does not apply to workover operations.

• This Moratorium NTL does not apply to waterflood, gas injections, or disposal wells.

• This Moratorium NTL does not apply to drilling operations or other activities that are necessary to safely close or abandon a well, or to accomplish well completion operations under 30 CFR 250.500.

All activities not affected by this Moratorium NTL must be performed in compliance with all applicable regulations. For the duration of this Moratorium NTL, MMS will process only those APDs and other permits that are necessary to perform the activities not affected by this Moratorium NTL, as set forth above.

Requirements for Existing Deepwater Production

To obtain approval to conduct an activity in support of existing deepwater production, you must submit your request to the Regional Supervisor for Field Operations. Your request must include the following:

• A new APD or Application for Permit to Modify, as appropriate;

• Purpose of the well (disposal, injection, water flood);

• Type of rig/BOP;

• Water depth;

• Safety systems in place; and

• Location/placement of safety system devices (hydraulic accumulators located in a protected area).

In addition, you must submit a structured risk analysis that identifies and discusses the risks of the requested drilling or activity. The discussion must address risks of losing well control, risks of not conducting the requested activity, and your planned use of best practices. This analysis must be specific for each situation and include a detailed description of the activity.

Guidance Document Statement

The MMS issues NTLs as guidance documents in accordance with 30 CFR 250.103 to clarify, supplement, or provide more detail about certain MMS requirements. NTLs may also outline what must be provided as required information in submissions to the MMS.

The MMS will provide additional guidance on this Moratorium NTL and the recommendations contained in the Report through the issuance of additional NTLs, rulemaking, or by other appropriate means.

Authority

This Moratorium NTL provides guidance and requirements pursuant to 30 CFR 250.106, which requires safe lease operations, and pursuant to 30 CFR 250.172(b), which states that the Regional Supervisor may grant or direct a suspension when activities pose a threat of serious, irreparable, immediate harm or damage, this would include a threat to life, property, mineral deposit, or marine coastal or human environment and 30 CFR 250.172(c), which states that the Regional Supervisor may grant or direct a suspension when necessary for the installation of safety or environmental protection equipment.

Paperwork Reduction Act of 1995 Statement

The Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.) requires us to inform you that the MMS collects this information to carry out its responsibilities under the OCS Lands Act, as amended. The MMS will use the information to ensure safety and environmental protection on the OCS. No proprietary data are collected. This NTL references requirements already approved for 30 CFR 250 under Subpart A – 1010-0114 and Subpart D – 1010-0141. This NTL imposes new hour burdens; therefore, we have submitted to the Office of Management Budget (OMB) an emergency information collection for approval of these new burden hours. Once OMB has approved this collection of information, we will reissue this NTL with the OMB control number and expiration date. We estimate the public reporting burden specifically pertaining to the new requirements in this NTL to average 40 burden hours per response. 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. Direct any comments regarding the burden estimate or any other aspect of this collection of information to the Information Collection Clearance Officer, Mail Stop 5438, Minerals Management Service, Department of the Interior, 1849 C Street, NW, Washington, DC 20240.

Contact

If you have any questions regarding this Moratorium NTL, please contact Mike Saucier by e-mail at [email protected] or by telephone at (504) 736-2503 in the Gulf of Mexico Region, or Rishi Tyagi by e-mail at [email protected] or by telephone at (805) 389-7775 in the Pacific Region.

_______ __________________________

Dated Deputy Director

Minerals Management Service

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