§ 550.166 - If BOEM grants me a RUE, what financial assurance must I provide?

§ 550.166 If I have a State leaseBOEM grants me a RUE, what surety bond financial assurance must I have for a right-of-use and easement?

Cross Reference

Link to an amendment published at 89 FR 31589, Apr. 24, 2024.

Cross Reference

Link to an amendment published at 89 FR 47081, May 31, 2024.

provide?

(a) Before BOEM issues grants you a right-of-use and easement RUE on the OCS, you must furnish the Regional Director a surety bond for $500,000.

(b) The Regional Director may require additional security from you (i.e., security above the prescribed $500,000) to cover additional costs and liabilities for regulatory compliance. This additional surety:

(1) Must be in the form of a supplemental bond or bonds meeting the requirements of 30 CFR 556.54 (General requirements for bonds) or an increase in the coverage of an existing surety bond.

(2) Covers additional costs and liabilities for regulatory compliance, including well abandonment, platform and structure removal, and site clearance from the seafloor of the right-of-use and easement.

submit or maintain financial assurance of $500,000, which will guarantee compliance with the regulations and the terms and conditions of all RUEs you hold.

(1) You are not required to submit and maintain the financial assurance of $500,000 pursuant to this paragraph (a) if you furnish and maintain area-wide lease financial assurance in excess of $500,000 pursuant to § 556.901(a) of this subchapter, provided that the area-wide lease financial assurance also guarantees compliance with all the terms and conditions of all RUEs you hold in the area.

(2) The Regional Director may reduce the amount required in this paragraph (a) upon a determination that the reduced amount is sufficient to guarantee compliance with the regulations and the terms and conditions of all RUE grant(s) you hold.

(3) The requirements for financial assurance in §§ 556.900(d) through (g) 556.902 of this subchapter apply to the financial assurance required under paragraph (a) of this section.

(b) If BOEM grants you a RUE that serves either an OCS lease or a State lease, the Regional Director may require supplemental financial assurance above the amount required by paragraph (a) of this section, to ensure compliance with the obligations under your RUE grant, based on an evaluation of your ability to carry out present and future obligations on the RUE using the criteria set forth in § 556.901(d)(1) through (3) of this subchapter. This supplemental financial assurance must:

(1) Meet the requirements of §§ 556.900(d) through (g) and 556.902 of this subchapter; and

(2) Cover costs and liabilities for compliance with the obligations of your RUE grants and with applicable BOEM and Bureau of Safety and Environmental Enforcement (BSEE) orders.

(c) If you fail to replace any deficient financial assurance upon demand or fail to provide supplemental financial assurance upon demand, the Regional Director may:

(1) Assess penalties under subpart N of this part;

(2) Request BSEE to suspend operations on your RUE; and/or

(3) Initiate action for cancellation of your RUE grant.

[89 FR 31589, Apr. 24, 2024]