Hercules To Cut More Jobs
Houston, Texas-based Hercules Offshore has announced its intention to cut 50 jobs in offshore Louisiana. The cuts will be made around Thanksgiving.
Hercules declared bankruptcy in August and has made massive layoffs since the decline in oil prices last year. In July 2013, one of its rigs, Hercules 265, caused a blowout that resulted in a fire that raged for 2 days.
The company owns and operates primarily older-model shallow-water drilling rigs, which are the first rigs to be shelved when the offshore market weakens.
Shell To Discontinue Arctic Drilling
On October 1, 2015, Shell announced it was discontinuing its exploration and production program in Alaska “for the foreseeable future.” The drilling program just started two months ago on the J. Burger Well near Barrow, Alaska.
It is estimated that there are 29 billion barrels of oil in the Arctic. Additionally, the Outer Continental Shelf or “OCS” in this region is relatively shallow, 150 to 6,800 feet.
But the high costs of producing in the difficult Arctic conditions–including lease costs, drilling costs (including increased risk of personal injury), and transport costs—coupled with the decline in oil prices and uncertain regulatory conditions, have led Shell to discontinue its efforts, at least for now.
U.S. Government Sells 42 Million Acres Of New Offshore Drilling Sites
In September 2015, the federal government’s Bureau of Ocean Energy Management stated that it will conduct an auction in March 2016 involving 42 million acres of new oil and gas leases offshore Louisiana, Mississippi, Alabama, and Florida.
The blocks are in water depths as shallow as 9 feet and as deep as 11,000 feet.
Republican Senators Oppose New Offshore Drilling Regulations
Louisiana senators David Vitter and Bill Cassidy vehemently oppose the new “regulatory avalanche” the Obama Administration and federal regulators have imposed since the 2010 Deepwater Horizon rig explosion. The offshore injury disaster killed 11 offshore workers and injured many more. Offshore injury attorneys have been litigating related issues ever since.
Senator Vitter said “Ensuring high safety standards is always a priority. That is not of question here. . . . What we must also understand is the economic impacts of the Obama administration’s far-left environmental policies.”
Much of the discussion centered on an April 2015 well control proposal which would impose new requirements for maintenance, design, and repair of offshore well control equipment, including BOPs with back-up shears, and third party inspection systems.
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