US Gulf Players Fret Over Future Access

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The offshore oil and gas industry was blindsided by a shock federal court ruling last month that annulled the results of Gulf of Mexico Lease Sale 257, held in November. It has left companies and industry groups scrambling to figure out how to respond and to assess the implications for their offshore portfolios. “People are freaked out, in a big way,” one E&P source told Energy Intelligence. That’s due largely to deep uncertainty around both the industry’s legal standing to fight the ruling and the Biden administration’s inscrutable energy policy. Companies are now facing “a real possibility that [they] won’t be able to take a lease in the Gulf of Mexico for four years,” the source said. The district court ruling cited insufficient environmental reviews under the National Environmental Policy Act (Nepa), specifically related to calculations of greenhouse gas emissions associated with offshore drilling and production. The ruling “came out of left field” and was barely on the radar of potential legal risks, said one industry insider. Anxiety, he said, is now multiples higher than when President Joe Biden early last year signed an executive order to halt future lease sales as part of his ambitious climate agenda — a move subsequently blocked by a federal judge more sympathetic to the oil industry. This forced the November lease sale to proceed, to the apparent chagrin of the administration.

Resource Access, Policy and Regulation, Offshore Oil and Gas, Upstream Licensing, Deepwater, Exploration, Independent E&Ps, Majors, Corporate Strategy
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