{"id":1708,"date":"2016-07-23T21:42:39","date_gmt":"2016-07-23T21:42:39","guid":{"rendered":"http:\/\/suretyone.com\/blog\/?p=1708"},"modified":"2019-05-30T23:08:15","modified_gmt":"2019-05-30T23:08:15","slug":"bureau-of-ocean-energy-management-surety-bond-requirements","status":"publish","type":"post","link":"https:\/\/suretyone.com\/blog\/bureau-of-ocean-energy-management-surety-bond-requirements\/","title":{"rendered":"Bureau of Ocean Energy Management Announces New Surety Bond Requirements"},"content":{"rendered":"<p>On July 14th, 2016, the Bureau of Ocean Energy Management (BOEM) &#8220;notified companies holding oil and gas leases in federal waters that it is updating the surety bond\u00a0and risk management requirements to ensure that U.S. taxpayers never have to pay for decommissioning and removing a company\u2019s offshore production facilities.\u00a0BOEM\u2019s Notice to Lessees and Operators (NTL) details improved procedures to determine a lessee\u2019s ability to carry out its lease obligations &#8212; primarily the decommissioning of Outer Continental Shelf (OCS) facilities &#8212; and whether to require lessees to furnish additional <strong>Bureau of Ocean Energy Management surety bond <\/strong>security.<\/p>\n<p>\u201cBOEM\u2019s goal is to modernize its approach to risk management in a way that better aligns with the realities of the industry and protects the U.S. government and taxpayers from risk in a manner that isn\u2019t overly burdensome to the oil and gas industry,\u201d said BOEM Director Abigail Ross Hopper. \u201cBy implementing these changes, we will create comprehensive procedures to decrease risks to taxpayers while providing industry flexibility to negotiate adaptive solutions and use tailored financial plans to meet their surety bond requirements.\u201d<\/p>\n<p>All OCS leases require that when decommissioning, the company must remove all facilities and restore the site to its pre-lease state. Due in part to the industry\u2019s move into deepwater areas in the Gulf of Mexico, decommissioning costs have risen significantly. Moreover, as existing infrastructure ages, larger companies are transferring older facilities to smaller or less experienced companies. Current estimated routine decommissioning liabilities in the OCS are approximately $40 billion.\u00a0The NTL replaces NTL No. 2008-N07 and provides updated procedures for requiring additional <strong>Bureau of Ocean Energy Management surety bond<\/strong> capacity\u00a0for oil and gas or sulphur leases. The revised NTL will provide updated criteria for determining a lessee&#8217;s ability to self-insure its OCS liabilities based on the lessee&#8217;s financial capacity and financial strength. It also provides new methods and additional flexibility for lessees to meet their additional financial security requirements through a tailored plan. The guidance and clarification will apply to all BOEM regions and planning areas. In addition to lease holders, the NTL also applies to right of use and easement holders.<\/p>\n<p>\u201cBOEM\u2019s financial assurance regulations need to take into account current industry practices,\u201d Hopper said. \u201cWe must ensure the U.S. taxpayer never pays to decommission an OCS facility and that the environment is protected. Managing risk in the early stages of a lease will provide lessees negotiated solutions that improve business certainty and leverage existing company strengths.\u201d<\/p>\n<p>BOEM will work with all lessees, both large and smaller individual lessees, to develop an approach that works best for the government and for each company while focusing on the highest risk properties first. The intent is to examine each company individually, assess its total &#8216;environmental surety bond&#8217;\u00a0needs and then work with the company to determine the (appropriate)\u00a0financial assurance instrument(s) for its individual needs. After today\u2019s publication, BOEM is providing a 60-day grace period before the NTL is implemented. BOEM will focus first on those properties that pose the highest risk to the government, namely, properties for which there is only one leaseholder responsible for decommissioning. Those leaseholders will have 60 days, from the date of an order requiring additional financial security (<strong>Bureau of Ocean Energy Management\u00a0surety bond<\/strong> capacity), to comply.\u00a0Additionally, for all other holdings, lessees will have 120 days from the date they receive an order to provide additional security, if required.&#8221;<\/p>\n<p>More information about the NTL can be found here: <a title=\"http:\/\/www.boem.gov\/Risk-Management\/\" href=\"http:\/\/www.boem.gov\/Risk-Management\/\">http:\/\/www.boem.gov\/Risk-Management\/<\/a>. The NTL is posted at<a title=\"http:\/\/www.boem.gov\/Notices-to-Lessees-and-Operators\/\" href=\"http:\/\/www.boem.gov\/Notices-to-Lessees-and-Operators\/\">http:\/\/www.boem.gov\/Notices-to-Lessees-and-Operators\/<\/a>. Connie Gillette and Abigail Ross Harper authored the foregoing announcement and are available for guidance with the new surety bond and risk management guidelines.<\/p>\n<p><strong>National\u00a0surety leader<\/strong>,\u00a0<a title=\"Surety One\" href=\"https:\/\/suretyone.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Surety One, Inc.<\/a>\u00a0is the premier bonding underwriter for any operation requiring reclamation surety and offshore closure\/decommissioning operations. We\u00a0offer\u00a0reclamation bond\u00a0support of petroleum, coal, uranium, metal mining, and horizontal hydraulic fracturing \u201cfracking\u201d operations. \u00a0We will write these for ALL state departments of environmental protection, Bureau of Ocean Energy Management, the Railroad Commission of Texas, and federal Bureau of Land Management (BLM).\u00a0Visit our reclamation <a href=\"https:\/\/suretyone.com\/reclamation-bond\" target=\"_blank\" rel=\"noopener noreferrer\">page<\/a>,\u00a0call (800) 373-2804, or email\u00a0Underwriting@SuretyOne.com\u00a0for a <strong>decommissioning surety\u00a0bond<\/strong>\u00a0application or further information regarding surety in any state.<\/p>\n<p>#suretybond #suretybonds #decommissioningbond #reclamationbond #boem #OceanEnergyManagment #offshoredrilling #petroleum #SuretyOne<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>On July 14th, 2016, the Bureau of Ocean Energy Management (BOEM) &#8220;notified companies holding oil and gas leases in federal waters that it is updating the surety bond\u00a0and risk management requirements to ensure that U.S. taxpayers never have to pay&#8230; <a class=\"more-link\" href=\"https:\/\/suretyone.com\/blog\/bureau-of-ocean-energy-management-surety-bond-requirements\/\">Continue Reading &rarr;<\/a><\/p>\n","protected":false},"author":1,"featured_media":1709,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"image","meta":[],"categories":[8],"tags":[2068,2069,2070,9,10,1728,1734,1871,51],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v17.7.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Bureau of Ocean Energy Management Surety Bond<\/title>\n<meta name=\"description\" content=\"Bureau of Ocean Energy Management surety bond requirements have changed for companies holding oil and gas leases in federal waters.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/suretyone.com\/blog\/bureau-of-ocean-energy-management-surety-bond-requirements\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bureau of Ocean Energy Management Surety Bond\" \/>\n<meta property=\"og:description\" content=\"Bureau of Ocean Energy Management surety bond requirements have changed for companies holding oil and gas leases in federal waters.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/suretyone.com\/blog\/bureau-of-ocean-energy-management-surety-bond-requirements\/\" \/>\n<meta property=\"og:site_name\" content=\"Surety One, Inc.\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Surety1\/\" \/>\n<meta property=\"article:author\" content=\"https:\/\/www.facebook.com\/Surety1\" \/>\n<meta property=\"article:published_time\" content=\"2016-07-23T21:42:39+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-05-30T23:08:15+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/suretyone.com\/blog\/wp-content\/uploads\/BOEM-Drilling-Bond-Surety-One-Inc..jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"627\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@SuretyOne\" \/>\n<meta name=\"twitter:site\" content=\"@SuretyOne\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"C. 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