Feds expand offshore contractor oversight

May 3, 2011 at 1:04 PM   |   Comments

HOUSTON, May 3 (UPI) -- Federal regulation of oil and gas companies doing business in the United States soon will extend to service providers and others, the Obama administration said.

Michael Bromwich, head of the Bureau of Ocean Energy Management, Regulation and Enforcement, said the shift may mean fines and penalties for contractors engaging in "egregious" behavior while working on projects in federal waters leased for energy development, the Houston Chronicle reported Tuesday.

Bromwich, speaking at the Offshore Technology Conference in Houston, said the move wouldn't supplant the principle that oil and gas companies are "fully liable for things that go wrong" offshore.

"There is a virtue in the clarity that we've had historically in being able to go directly against the operators even when it relates to contractors, but there are at least a small number of cases where we want to be able to go against contractors," Bromwich said.

In some instances when non-operators act egregiously, "we need to have the ability to move directly to enforcement actions, through the assessment of civil fines and through the other regulatory tools that we have," Bromwich said.

Bromwich said a review of existing law determined the agency has "broad legal authority over all activities relating to offshore leases, whether it is engaged in by lessees, operators or contractors."

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