A LAWYER TELLS WHAT’S ON THE MINDS OF HIS ENERGY CLIENTS.
Houston commercial litigator Glenn Legge advises energy clients on offshore regulations and contracts, and takes advantage of the Offshore Technology Conference to meet with clients who travel from around the world to attend the show.
Legge, a lawyer with Holman Fenwick Willan, is a self-described “equipment geek” who loves to examine the engineering marvels on display. He recently spoke about what’s on the minds of his offshore clients. Edited excerpts follow.
Q: What are the most important legal concerns facing your clients these days?
A: The majority of deepwater drilling and pipeline vessels in the Gulf of Mexico are foreign flag vessels. On Jan. 18, Customs and Border Protection issued a notice that will restrict the use of these vessels. This could greatly increase costs for deep-water drilling because the government notice could restrict the ability of vessels to move from one well location in the Gulf to another with all the equipment necessary to safely drill the wells.
Another concern is the threat of cyberattacks on offshore facilities that could damage property, the environment and injure people. The industry has increased its focus on cybersecurity concerns since the Bureau of Safety and Environmental Enforcement issued new regulations concerning real-time monitoring of certain drilling and production operations.
More companies are remotely monitoring their operations to lower costs, but we have to be just as careful to maintain adequate cybersecurity measures.
Q: What is the likelihood that safety regulations put in place after the explosion of the Deepwater Horizon will be put on hold in the new Trump administration?
A: Unlike some energy regulations, the federal Bureau of Safety and Environmental Enforcement’s new regulatory regime did not arise solely from the Obama administration — it was largely the result of the Deepwater Horizon catastrophe. The bureau’s safety and environmental regulations are already deeply ingrained in the policies of most operators and service companies. There is not a reasonable cost-benefit analysis that would support a wholesale abandonment of these safety regulations.
Q: If some of the safeguards are removed, will it make it easier for smaller companies to enter the oil and gas drilling business?
A: We don’t anticipate that current safety regulations will be significantly lessened, so, we don’t anticipate an impact on smaller companies entering the offshore oil and gas sector. However, if the government backs off new financial obligations for decommissioning offshore structures, the industry will see an increase in smaller exploration and production companies re-entering the offshore sector, particularly those backed by private equity.
Q: With new immigration policies in the offing, are oil and gas companies worried they’ll have enough employees?
A: The majority of workers in the Gulf of Mexico are either U.S. citizens or foreign laborers on H1B visas. A marked decrease in the issuance or renewal of these visas could impact the available workforce, particularly in decommissioning work, depending on whether U.S. workers are willing to do the work at competitive rates.