The U.S. Minerals Management Service has tweaked its lease rules in an attempt to encourage ultradeep drilling in the federal offshore. As of January 2006, the agency is allowing operators to suspend operations on wells deeper than 25,000 feet (true vertical depth) below the ocean surface. This provision could help operators extend leases beyond their primary terms, as granting of a "suspension of operations" or SOO temporarily prevents a lease from expiring. The MMS says it will grant SOOs under the following circumstances: The lease has either a five-year primary term, or an eight-year primary term with a requirement to drill within the first five years; The lessee or operator has approved plans to drill an ultradeep well on the lease; Before the end of the fifth year of the primary term, the lessee or operator must have acquired and interpreted geophysical information, including full 3-D depth migration, which indicates that a potential hydrocarbon-bearing formation is ultradeep; Before requesting the suspension, the lessee or operator is processing or interpreting the seismic data to identify ultradeep prospects; The lessee or operator needs additional time to complete geophysical processing, or to acquire new data that would impact the decision to drill the ultradeep prospect. The MMS is not covering leases with 10-year primary terms under the new rules, as the agency says that a decade is sufficient time to explore and develop ultradeep prospects.
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