I posted about this abandonment of many wells in the shallow areas of the Gulf by Fieldwood Energy. The move was opposed by the major oil companies as there was no plan to plug them or someone designated to do the clean up. The Bankruptcy Judge has “frozen” time to answer some of these questions.
Citing the far-reaching implications of Fieldwood Energy LLC’s second bankruptcy in three years, a federal judge said Friday he wants to “freeze time” in a dispute pitting the bullish Houston-based company against some of the world’s biggest oil and gas corporations over more than 1,700 old wells in the Gulf of Mexico. At the crux of the case is whether Fieldwood may abandon about 6% of all active wells offshore of Louisiana, as well as hundreds of offshore production platforms and pipeline infrastructure. If that is allowed, responsibility for them would revert to their former owners: big international players such as BP, Royal Dutch Shell and Chevron. These giants oppose Fieldwood’s request, saying they – and possibly U.S. taxpayers – would be stuck with environmental cleanup costs that could swell into the billions of dollars. Too, they argue it could invite any other debt-ridden oil and gas operator to use the bankruptcy process to abandon assets of declining value and avoid the environmental costs and decommissioning.nola.com
The Houston based court reacted quickly to this case.
Bankruptcy Judge Marvin Isgur, who sits in Houston, issued a preliminary order Friday to give BP and Fieldwood Energy representatives time to meet outside of arbitration and the court process and discuss settling. “I want to freeze and extend time so I can make a decision,” Isgur said. Addressing a BP representative, he added: If this thing goes to arbitration, you guys are going to lose … I think your client has a big risk here. “I didn’t know the consequence of the operatorship removal. Y’all have a big risk with the arbitrator. I’m not sure if winning today doesn’t put your client still in a bad position. Just looking at this stuff, there’s something here for everybody to be worried about. I want all parties to meet. This is a big important issue.”
This is a problem situation with many companies involved. All that can be said is to stay tuned!