Gulf of Mexico Update

Michael Prendergast, Deputy Regional Director Agenda

Regulatory Update Activity Looking to the Future Questions? Regulatory Update

Published proposed rulemaking Oil and Gas Production Safety Systems – Subpart H Published August 22, 2013, comment period was extended and closed December 5, 2013 Includes: safety and pollution prevention equipment lifecycle analysis, production safety systems, subsurface safety devices, and safety device testing In preparation, due out mid-2014 Blowout Prevention Systems Arctic (joint with BOEM)

Upcoming Proposed Rules

Suspensions of Production and Operations

Natural Gas Fluids Measurement

Oil Spill Mechanical Recovery Drilling Permits

Shallow Water < 500 ft. Deepwater > 500 ft. Total Year New Well Bypass Sidetrack New Well Bypass Sidetrack Approved 2013 72 51 120 57 34 23 357 2012 67 42 108 112 25 23 377 2011 71 40 87 38 19 22 277 2010 72 32 92 32 19 23 270 2009 95 28 70 76 26 46 341 Rig Activity Deepwater GOM

Rigs Working in Deepwater GOM: 2009-2013 60

50

40

30 # of Rigs

20

10

0 Drilling Rigs Working in U.S. Gulf of Mexico

Semi-submersible = 20

Jack-up rig = 25 Platform Rig = 24

Drillship = 19 U.S. Gulf of Mexico New Deepwater Rigs

Deepwater Rig & Type Operator Quarter Expected

Seadrill West Auriga drillship BP 3rd Qtr. 2013 Noble Don Taylor drillship Shell Seadrill West Vela – drillship BP 4th Qtr. 2013 Stena IceMAX – drillship Shell Diamond Offshore Ocean Onyx – rebuilt semi Apache Atwood Advantage - drillship Noble Energy 1st Qtr. 2014 Maersk Viking – drillship ExxonMobil Sevan – cylinder hull LLOG Exploration Diamond Offshore Ocean Blackhawk - drillship Anadarko Noble Bob Douglas - drillship Anadarko 2nd Qtr 2014 Maersk Valiant - drillship ConocoPhillips Pacific Sharav – drillship Chevron Diamond Offshore Ocean BlackHornet – drillship Anadarko Deepwater Invictus – drillship BHP Billiton 3rd Qtr. 2014 Noble Sam Croft – drill ship Freeport McMoran Rowan Resolute – drillship Anadarko Seadrill West Neptune – drillship LLOG Exploration 4th Qtr 2014 Rowan Reliance - drillship Cobalt Intl. Energy 1st Qtr 2015 Noble Tom Madden - drillship Freeport McMoran Deepwater Appraisal Activity

Deepwater Prospect Operator Map Area

North Platte Cobalt Intl. Energy Garden Banks 959 Stampede(Pony)*Sanction ‘14, 1st prod.–’16 Hess Corp Green Canyon 468 Stampede(Knotty Head)*Sanction ‘14, 1st prod.–‘16 Hess Corp Green Canyon 512 Big Dog (Mad Dog B) BP Green Canyon 825 Appomattox Shell Mississippi Canyon 806 Vito Shell Mississippi Canyon 984 Gunflint Noble Energy Mississippi Canyon 948 Hadrian North ExxonMobil Keathley Canyon 918 Buckskin/Moccasin Chevron Keathley Canyon 872/736 Kaskida/Tiber/Gila BP Keathley Canyon 292/102/93 Shenandoah Anadarko Walker Ridge 52 Coronada Chevron Walker Ridge 98 Production Facilities

Shallow Water Deepwater Production Facilities Production Facilities (less than 500 ft) (greater than 500 ft) 2647 73 Fixed Fixed SPAR

Single Caisson

FPSO TLP

4 Pile Caisson New Gulf of Mexico Deepwater Projects

Deepwater Project Operator 1st Production Expected

Olympus TLP (Mars B) {**subsea} Started production Shell Mississippi Canyon 806 1st Qtr. 2014 Jack – St. Malo Chevron 2014 Walker Ridge 718 Big Foot Chevron 2014 Walker Ridge 29 Lucius (oil/gas)/S. Hadrian (gas) Anadarko/ 2014 Keathley Canyon 875 ExxonMobil Tubular Bells Hess 2014 Mississippi Canyon 725 Delta House LLOG Exploration 2015 Mississippi Canyon 254 Olympus TLP (Mars B) {**platform} Shell 2015 Mississippi Canyon 806 Heidelberg Anadarko 2016 Green Canyon 860 Stones (**2nd FPSO in GOM) Shell 2016 Walker Ridge 508 Gulf of Mexico OCS Oil Production Total vs. Deepwater

MM Bbls /Day

2.000

1.800 1.6 1.600 1.5 1.6 1.5 1.6 1.4 1.5 1.400 1.4 1.3 1.3 1.3 1.3 1.3 1.3 1.2 1.3 1.2 1.200 1.1 1.2 1.0 1.0 1.0 1.0 0.9 1.0 1.0 1.0 0.9 1.000 0.9 0.9 0.8 0.9 0.9 0.9 0.800 0.7 0.6 0.600 0.4 0.400 0.3 0.2 0.2 0.200 0.1 0.1

0.000 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total Deepwater Portion (> 1000 ft) (est) Gulf of Mexico OCS Gas Production Total vs. Deepwater

BCF / Day 16.0 14.2 14.4 14.0 13.5 13.9 13.6 13.9 14.0 13.0 13.3 12.4 12.1 12.0 11.0 10.0 8.7 8.0 7.7 8.0 6.7 6.4 6.2 6.0 5.0 3.9 3.8 4.2 3.5 3.3 3.6 4.0 3.2 3.0 2.8 3.0 2.9 2.3 2.7 2.5 2.3 1.6 2.0 1.7 2.0 0.8 1.1 0.3 0.4 0.5 0.0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total Deepwater Portion (> 1000 ft) (est) Looking to the Future

Increased drilling activity Industry mastering enhanced information requirements for APDs Inspections and Enforcement efforts BOP test witnessing Increased inspection force and helicopter fleet eInspections Increased coordination with USCG Looking to the Future

Production Projects Start-ups Pre-production Inspections Inspections and Enforcement efforts Increased inspection force and helicopter fleet eInspections New and emerging technologies Review of Deepwater Operation Plans (DWOPs) Decommissioning of subsea and deepwater structures, i.e. Spars & TLPs Total Inspections Performed by Type

Inspection 2009 2010 2011 2012 2013 Type

Well 619 586 640 942 960 Operations

Production 3,267 2,737 2,266 2,420 2,690 Recent Response to Incidents July 8, 2013 – Energy Resource Technology, LLC (ERT) Loss of well control @ Ship Shoal 225, 146 feet water depth BSEE oversees response through Houma District July 23, 2013 – Walter Oil and Gas Loss of well control @ South Timbalier 220, 154 feet water depth BSEE participates in Unified Command with US Coast Guard, Joint Information Center is stood up January 30, 2014 - EnVen Loss of well control @ Vermilion 356, 262 feet water depth BSEE leads coordinated response with US Coast Guard

Thank you for your attention.

Website: www.bsee.gov