The U.S. Interior Department announced on Thursday that it has established new guidelines aimed at increasing offshore oil drilling activities, specifically in a portion of the Gulf of Mexico. These new rules are expected to boost domestic oil production, which has seen record highs in recent years under previous administrations.
The initiative is part of President Donald Trump’s Energy Dominance Council, led by Interior Secretary Doug Burgum, which is focused on reducing costs, minimizing regulations, and enhancing oil output. The newly introduced regulations permit operators in the Wilcox rock formation to extract oil from multiple offshore reservoirs while employing greater pressure differences. The allowable pressure differential for downhole commingling between these reservoirs in the Paleogene has been expanded significantly from 200 pounds per square inch to 1,500 psi.
The Interior Department projects that these changes could contribute an additional 100,000 barrels of oil per day from the region over the next decade. Burgum expressed enthusiasm about the new rules, stating, “This is a monumental milestone in achieving American Energy Dominance. We’re delivering more American energy, more efficiently, and with fewer regulatory roadblocks.”
While the lift in restrictions is designed to stimulate production, producers must still adhere to certain requirements, such as maintaining pressure monitoring and providing regular performance reports, as outlined by Interior’s Bureau of Safety and Environmental Enforcement.
It’s essential to note that during the latter part of the Biden administration, safety regulations for offshore drilling were implemented to address concerns related to new technologies that operate under extreme subsea pressures. The previous administration’s safety rules were influenced by breakthroughs in drilling, particularly following Chevron’s launch of production at its Anchor asset, which was the first to operate at 20,000 psi pressure and reached depths of 34,000 feet.