Gulf of Mexico. The Gulf of Mexico is in international waters. Oceanic airspace is divided into oceanic control areas (OCA) and delegated to a controlling authority bordering that region. The division among authorities is done by international agreement through the ICAO.
Gulf of Mexico. On July 14, 2016, the BOEM announced updated financial assurance and risk management requirements for offshore leases. The Notice to Lessees No. 2016-N01 (“NTL”) details procedures to determine a lessee’s ability to carry out its lease obligations – primarily the decommissioning of Outer Continental Shelf (OCS) facilities – and whether to require lessees to furnish additional financial assurance. The NTL provides updated criteria for determining a lessee’s ability to self-insure its OCS liabilities based upon the lessee’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 BOEM has stated that it will focus first on those 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 to comply. For all other holdings, leaseholders will have 120 days from the date they receive an order to provide additional security, if required. Alternatively, lessees can provide a tailored financial plan to BOEM, which will permit the use of forms of financial security other than surety bonds and pledges of treasury securities and allow companies to phase in funding of the additional security. We are continuing to review the NTL and guidance provided by the BOEM to assess its impact on our operations in the U.S. Gulf of Mexico, although it is possible we may receive an order from BOEM in the future to post additional financial security, which may not be available on acceptable terms, or at all. The NTL and any BOEM order to post additional financial security may increase our cost of operations or have a material adverse effect on our liquidity and impair our ability to operate in the U.S. Gulf of Mexico.
