In this week’s news update, Baker Hughes closes a large facility in the Marcellus Shale, and Atlantic drilling rights will not be auctioned off.
The Obama administration is abandoning its plan to allow new offshore drilling on the southeast coast of the U.S., the Interior Department announced on March 15.
The Department said it will not auction off drilling rights for Atlantic Ocean waters off the coast of Virginia, North Carolina, South Carolina, Georgia and Florida. Offshore drilling in the Atlantic had drawn support from the American Petroleum Institute, which represents companies in the industry. The group said it would have bolstered jobs, tax revenue and economic development.
However, the Obama administration opened the door to the possibility of allowing limited drilling in Arctic waters. The administration said it would consider the sale of drilling rights in three spots in the Arctic — the Chukchi Sea, Beaufort Sea and Cook Inlet — from 2017 to 2022.
Petroleum Association Requests Money to Help with Cleanup
An oilfield services group based in Calgary has asked Ottawa to take half a billion dollars out of its infrastructure fund to help Albertans clean up the province’s old oil and gas well sites.
The Petroleum Services Association of Canada (PSAC) said March 14 that it recently presented a proposal to the federal government to free up $500 million for well decommissioning to create jobs, retain expertise and provide economic and environmental health benefits during the current commodity price downturn.
Saskatchewan Premier Brad Wall has also asked Ottawa for $156 million to clean up old wells in that province.
The PSAC reports that there are 75,000 inactive wells in the province requiring downhole wellbore abandonment and surface reclamation. The cleanup could cost as much as $82 billion but current industry cash flow for 2016 is estimated at $26.5 billion.
Baker Hughes Closes Large Facility in Marcellus Shale
Baker Hughes has closed a $40 million facility in the Marcellus Shale region due to the downturn in the oil industry. The facility, located in Clinton County, Pennsylvania, opened in 2012.
The pressure pumping facility was 90,000 square feet. Baker Hughes bought the property in late 2011 from the Clinton County Economic Partnership for $2 million and then spent $40 million the following year to develop the site.
At the peak of the Marcellus Shale drilling boom in 2013, approximately 250 people worked out of the complex. The company says employees at the location may be eligible for redeployment and the future of the site is uncertain.