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On June 29, 2023, the Office proposed a brand new rule in lieu of finalizing the BOEM provisions of the 2020 joint proposal. The brand new proposed rule furnished proposed revisions towards the regulations concerning threat administration and financial assurance for OCS lease and grant obligations.

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Just one commenter expressed guidance for The brand new “Financial assurance” term and famous that it supported “the breadth and optionality while in the proposed” definition. Reaction:

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On June 29, 2023, DOI published an NPRM while in the Federal Sign up at 88 FR 42136, which proposed amendments to thirty CFR components 550, 556, and 590. This NPRM proposed to streamline the factors employed for analyzing the monetary overall health of lessees, codify the usage of the BSEE probabilistic estimates of decommissioning Price tag for determining the amount of supplemental economic assurance essential, remove restrictive provisions for third-celebration assures and decommissioning accounts, add criteria for which a bond or third-bash warranty that was supplied as supplemental economic assurance could possibly be canceled, and make clear bonding necessities for RUEs serving Federal leases. Specifically, the Department proposed to revise the criteria employed To guage the necessity for supplemental money assurance from lessees from the existing five requirements—economic ability, projected fiscal energy, small business stability, reliability in meeting obligations according to credit score score or trade references, and report of compliance with guidelines, regulations, and lease terms—to one of two criteria: (1) credit rating and (two) the ratio of the worth of proved reserves to decommissioning legal responsibility connected to All those reserves. The Office proposed using an investment decision grade credit score score threshold (or proxy credit score score equivalent) as well as a least three-to-one ratio of the worth of proved reserves to decommissioning legal responsibility connected to These reserves to determine if a lessee is required to provide supplemental monetary assurance.

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Commenters who objected to the removing from the history of compliance criterion urged BOEM for being more attentive to previous safety performance, deny waivers to any firm with idle iron, stipulate that owners with decommissioning obligations for deserted or idle wells would not be suitable for new leases, and acquire a scoring system to quality businesses on several security and environmental metrics to include in the financial assurance Investigation. Response:

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