States Sue to Block Biden Administration Rule on Offshore Decommissioning

By Georgina McCartney Reuters June 17, 2024

HOUSTON, June 17 (Reuters) – Texas, Louisiana and Mississippi on Monday sued the U.S. government to block the Biden administration’s proposed rule that would require the offshore oil and gas industry to provide nearly $7 billion in financial assurances to cover costs of dismantling old infrastructure.

The rule, which would take effect later this year, will predominantly affect smaller companies that do not have investment grade ratings or sufficient proven oil reserves. Oil majors are more likely to meet the credit criteria or have large reserves.

The lawsuit was filed against the U.S. Bureau of Ocean Energy Management (BOEM), which has said the rule could affect around three quarters of operators in the Gulf of Mexico.

The BOEM did not immediately respond for comment on the suit. When the rule was announced in April, the Department of the Interior said it was “to protect taxpayers from covering costs that should be borne by the oil and gas industry when offshore platforms require decommissioning.”

Decommissioning old wells can cost billions of dollars and that expense could fall to taxpayers if companies fail to meet their obligations due to bankruptcies or the transfer of assets from large to smaller companies with fewer resources.

Louisiana Attorney General Liz Murrill filed the lawsuit in a Louisiana federal district court and was joined by attorney generals of Texas and Mississippi.

“This is a really egregious direct assault on intermediate level producers of oil and gas, and that affects a lot of business in our state,” Murrill told Reuters in an interview.

“The new regulation is a solution in search of a problem, imposing unnecessary financial burdens that will have far-reaching impacts to many small to mid-size energy producers and all Americans,” said Kevin Bruce, executive director of the Gulf Alliance, a coalition of leading independent offshore oil and natural gas producers joining the legal challenge against the BOEM.

Some 37 offshore oil and gas operators have filed for bankruptcy since 2009, according to a U.S. government agency.

“This is a significant cost to our industry that would really put a lot of people out of business,” said Mike Minarovic, CEO of Arena Offshore, which operates more than 100 platforms in the Gulf of Mexico that produce some 50,000 barrels per day of oil equivalent

The new rule could cost Arena Offshore some $800-850 million in surety bonds, plus the costs of the bonds themselves, Minarovic said, citing government estimates of decommissioning cost.

Minarovic pointed to an outflow of money from surety markets in the past five years and said securing the bonds required to guarantee fiduciary and contractual obligations “will just be a requirement the government has that cannot be fulfilled.”

As of June 2023, more than 2,700 wells and 500 platforms were overdue for decommissioning in the Gulf of Mexico, according to the U.S. Government Accountability Office, pushing the government to require operators offer additional surety bonds in a bid to protect taxpayers from footing the bill.

The BOEM held around $3.5 billion in supplemental bonds to cover between $40 billion and $70 billion in total estimated decommissioning costs.

Under the new rule, the BOEM will allow current lessees and grant holders to request phased-in payments over three years to meet the new supplemental financial assurance demands required by the rule.

It was unclear yet whether the ruling would pressure offshore production. Minarovic said there could be shut ins if companies are unable to provide the bonds in time.

The U.S. Gulf of Mexico produces roughly 1.8 million barrels per day of oil, according to the last government figures, about 14% of total U.S. output.

“These (oil) companies should pay their fair share and clean up the mess they leave behind, and that starts with assurances like this one,” Mike Scott, Sierra Club national oil and gas campaign manager told Reuters.

https://gcaptain.com/states-sue-to-block-biden-administration-rule-on-offshore-decommissioning/

Related:

New Rule Aims to Protect U.S. Taxpayers from Bearing Offshore Decommissioning Costs

By Mike Schuler April 16, 2024

https://gcaptain.com/new-rule-aims-to-protect-u-s-taxpayers-from-bearing-offshore-decommissioning-costs/

Top Shipping Flag Withdraws Approval for Russian Insurer

Bloomberg June 17, 2024

The world’s largest shipping register withdrew its approval for Russia’s Ingosstrakh Insurance Co. to provide a key document enabling ships to enter ports.

The Liberian Register — under whose flag 16% of the world’s ships by capacity sail — said in a circular that it no longer authorizes Moscow-based Ingosstrakh Insurance Co. to issue so-called blue cards. Blue cards provide proof of cover against risks including oil spills and collisions. They are essential for port entry.

Last week, the UK sanctioned Ingosstrakh as part of a set of wide-ranging Group of Seven measures designed to target Russia as it continues its war in Ukraine. The firm has become an important provider of cover against spills and collisions for Russian oil exports, effectively displacing western entities.

EU Weighs Proposal to Sanction Russian Oil Tanker Insurer Ingosstrakh

In practice, the Liberia’s move may well prove symbolic. There are only three vessels covered by Ingosstrakh that sail under the flag of Liberia and none of them are oil tankers, according to a vessel database maintained for the International Maritime Organization. However, the move reinforces a growing divide between the parts of the global shipping fleet that are able to serve Russia and those that can’t.

Any ship with Ingosstrakh cover will receive a 90 day grace period, the circular said.

Despite its name, the Liberian register is headquartered in the US. National shipping registries are a common feature of the international shipping industry, applying common sets of rules that vessels must stick to in order to fly a nation’s flag.

https://gcaptain.com/top-shipping-flag-withdraws-approval-for-russian-insurer/

Crews evacuated from two ships hit by the Houthis

By Sam Chambers June 17, 2024

The crews of two vessels struck by the Houthis in recent days were forced to evacuate ship over the weekend with the Yemeni militants showing no let up in their attacks on merchant shipping. Both ships are reportedly at risk of sinking.

The Houthis have displayed greater sophistication in their attacks on merchant shipping this past week, hitting targets both by sea and air for the first time.

Their first successful sea drone strike on a commercial ship, Evalend Shipping’s Tutor kamsarmax, sustained damage and water ingress in the engine room last Wednesday with reports emerging that one seafarer died in the attack.

Another attack on Thursday on the Verbena, a general cargo ship owned by Ukraine-based Donbasstransitservice, saw three projectiles hit the ship, creating a severe blaze onboard with nearby US military personnel medevacing one seriously injured seafarer to hospital.

All crew on both ships were evacuated on Saturday with images from both sites showing the vessels were severely damaged. Salvors have been sent to try and save the Tutor while the fate of the Verbena remains unknown.

The Houthis claimed to have targeted a number of other vessels over the weekend.

In early March, the Rubymar became the first constructive total loss from the Houthi campaign, sinking in the Red Sea, having been hit by missiles in the middle of February.

Last week was a noticeable step up for the Houthis, both in terms of the volume of attacks as well as their improving accuracy.

Commenting on the escalation, Arsenio Dominguez, the secretary-general of the International Maritime Organization (IMO), said: “I’m appalled at the fact that seafarers going about their work continue to be targeted and injured.”

Dominguez reiterated his urgent call to find a solution to the ongoing Red Sea shipping crisis which has seen more than 100 vessels targeted by the Houthis since last November.

“This situation simply cannot go on. Everybody is going to feel the negative effect if international shipping is not able to trade as normal,” the IMO head said.

“Commercial ships and innocent seafarers must be allowed safe passage as they go about their regular business of carrying trade across the globe. We reiterate our call for international governments to do all they can to ensure the safety of merchant ships and civilian seafarers,” shipmanagement trade body InterManager told Splash on Friday.

https://splash247.com/crews-evacuated-from-two-ships-hit-by-the-houthis/

Canada #59 >>21033661

Twelve states refuse to sign Zelensky ‘peace conference’ declaration

The UAE, India, Saudi Arabia, and Brazil are among the countries that have not supported the Swiss summit’s final document

Twelve countries attending the Swiss-hosted Ukraine ‘peace conference’ have refused to sign the final communique. This is based on the list of countries that approved the document, RIA Novosti reported on Sunday.

According to the list, Armenia, Brazil, India, Saudi Arabia, South Africa, and the UAE are among the states that did not sign the declaration, as well as four organizations, including the UN and OSCE. Meanwhile, 79 nations, including Hungary, Serbia, Argentina, Türkiye, and Georgia, as well as four international bodies, joined Ukraine in endorsing the document.

The final communique has not yet been made public, but according to Reuters, citing a June 13 draft, it places the blame for the “war against Ukraine” on Russia, accusing it of causing “large-scale human suffering and destruction” and “creating risks and crises with global repercussions.”

The document calls for Ukraine’s territorial integrity “within internationally recognized borders” to be respected – specifically, the restoration of Ukrainian control over the Zaporozhye Nuclear Power Plant, as well as access to sea ports in the Black Sea and the Sea of Azov. The document also demands the release of all prisoners of war through a “complete exchange,” and the return of “deported and unlawfully displaced” Ukrainian children.

Ukraine ‘peace summit’ is ‘Animal Farm’ – ex-Russian president READ MORE: Ukraine ‘peace summit’ is ‘Animal Farm’ – ex-Russian president

It is so far unclear why several attendees did not support the document. However, Saudi Arabian Foreign Minister Prince Faisal bin Farhan Al Saud said earlier on Sunday that any meaningful progress toward a peaceful resolution to the conflict would require Russia’s participation.

Austrian Chancellor Karl Nehammer earlier predicted that not all attendees would sign the declaration, because “it’s a question of the specific choice of words.”

Russia was not invited to attend the conference, and said it would not have taken part even if invited due to the exclusive focus on Kiev’s demands.

More than 160 participants were invited to the talks, but nearly half declined due to the absence of a Russian delegation. The final list of attendees included representatives from 92 countries and eight international bodies.

https://www.rt.com/russia/599384-twelve-states-refuse-ukraine-peace/

Russian Tanker Spotted for First Time in Mariupol as Port Handles Logistics

Published Jun 14, 2024 1:04 PM by The Maritime Executive

Mariupol on the Sea of Azov, which was the scene of intense fighting in the spring of 2022, is becoming a new Russian supply port according to unconfirmed reports from local officials. Ukrainian media is carrying reports from the Russian social media channel Telegram of the arrival of the first tanker as Russian President Vladimir Putin outlined terms for a cease-fire that was immediately rejected by Ukraine.

The mayor of Mariupol Vadym Boichenko is quoted as saying Russian forces are using the port city as a logistics base. He reports that the Russians have begun using the remaining infrastructure for military purposes and are laying new railway tracks.

On Telegram, Pyotr Andryushchenko, an adviser to the Ukrainian mayor of Mariupol, posted pictures of an unidentified tanker at the port. He reports it is the first time that Russia has sent a tanker into the occupied port.

“Don’t pay attention to the size of the tanker. One of these is enough to supply the front for two or three days, taking into account tank columns,” he writes in the caption of the photo. “This is about full preparation for the launch of the railway to the port.… This is either for diesel locomotives for long distances or for their armored cargo. There are no options,” the message says.

Last month, he also reported the movement of equipment in the direction of Berdyansk through Mariupol. He said they had spotted “dozens of trucks with ammunition and manpower.”

At the beginning of the invasion in February 2022, the U.S. reported that Russia had launched an amphibious assault on Ukraine's Sea of Azov coastline near Mariupol. The city was the tenth-largest in Ukraine and the second-largest city in the Donetsk region before the start of the war. It was also a major seaport.

After seizing the port, Ukraine accused the Russians of stealing grain stored in warehouses. Several ships were damaged or destroyed in the seaport. Italian shipping company Fratelli Cosulich reported that one of its bulkers was trapped in the port and was only released in November 2022 after months of fighting in the region.

News of the Russian use of the area for logistics came as Putin said he would issue a decree for a ceasefire if Ukraine ceded control of the occupied regions and agreed to abandon efforts to join NATO. The Associated Press is quoting Ukrainian officials as calling the proposal “manipulative” and “absurd.” It comes as Western nations are meeting in Switzerland to seek the first steps toward peace in Ukraine.

https://maritime-executive.com/article/russian-tanker-spotted-for-first-time-in-mariupol-as-port-handles-logistics

>>21039511

Oh look, more garbage from Vatican Dude

>>21039609