BSEE and Coast Guard Sign Memorandum of Agreement for Regulating Mobile Offshore Drilling Units

by Davis Wright Tremaine LLP

On June 4, 2013, the U.S. Department of the Interior’s Bureau of Safety and Environmental Enforcement (“BSEE”) and the U.S. Coast Guard signed a Memorandum of Agreement regarding division of lead agency responsibilities between the two agencies for regulation, inspection, and oversight of systems and sub-systems on mobile offshore drilling units (“MODUs”) used for oil, gas, or sulphur drilling, production, or related activities. The lead agency will be responsible for coordinating with the other agency as appropriate.

MODUs fall under Coast Guard authority for regulation of vessels, are inspected and certificated by the Coast Guard, and are subject to USCG regulatory authority under the Outer Continental Shelf Lands Act for matters relating to the protection of life and property, as well as for unregulated hazardous working conditions on the Outer Continental Shelf. During periods when a MODU is temporarily attached to the seabed, BSEE regulates well operations, including drilling, completions, workover, production, and decommissioning.

The Memorandum of Agreement sets forth the basis on which BSEE and the Coast Guard intend to work together to identify and coordinate responsibilities for the inspection and oversight of MODUs. Implementation is to be in accordance with a prior Memorandum of Understanding executed between the two agencies on Nov. 27, 2012, which generally addressed coordination of shared agency responsibility for management of the Outer Continental Shelf. As illustrated in the chart below, this new Memorandum of Agreement presents a detailed breakdown of lead responsibility by system and sub-system, thereby allowing operators of MODUs to more quickly identify the principal agency with regulatory oversight over any specific area.

Under the Memorandum of Agreement, the Coast Guard will have lead agency responsibilities over the following systems and sub-systems: 

System Sub-System
Structural Integrity Structural integrity, modifications for construction and repair requirements
Design environmental conditions
Floating Stability  
Station Keeping Foundations, supporting mat, spud cans or footings
Mooring and anchoring equipment
Dynamic positioning
Lightering Equipment & Procedures  
Marine Engineering Systems  
Lifts, Elevators and Personnel Transfer  
Aircraft Landing and Refueling Decks, fuel handling, and storage
Fire Protection Structural fire protection for accommodations
Fire suppression systems
Firefighting, water pumps, piping, hose reels and monitor equipment
Fixed fire extinguishing equipment
Portable and semi-portable extinguishers
Fire and smoke detection
Gas detection systems approval
Electrical Design & Equipment (other than electrical equipment on the drill floor)  
Hazardous Areas Hazardous area classification & equipment approval
Aids to Navigation  
Pollution Prevention Prevention of unauthorized discharges to marine environment
Petroleum and other product transfers to and from a vessel (including transfer of produced hydrocarbons)
Marine Cranes and Material Handling Equipment (other than cranes and lifting systems associated with drilling)  
Ventilation in Non-Hazardous Locations  
Life Saving Equipment  
Workplace Safety and Health  
Living Quarters and Accommodation Spaces  
General Arrangements (including means of escape)  
Operational Requirements Structural inspection requirements
Manning/credentialing of Coast Guard credentialed personnel
Training of Coast Guard credentialed personnel
Emergency evacuation plans
Drills – fire, abandon, and lifeboat

Inspection and testing of marine and lifesaving equipment
Riveting, welding and burning
Diving operations & equipment
Safety Management System (SMS) per 33 CFR Part 96

BSSE’s lead agency responsibilities will extend to the following areas: 

System Sub-System
Structural Integrity Risers (drilling and pipeline)
Station Keeping Mooring analysis & anchoring plan
Drilling, Completion, Well Servicing & Workover Systems Drilling systems
Blowout prevention equipment and control systems
Riser and guideline tensioning systems
Motion compensating systems
Atmospheric vessels and piping
Lifting and hoisting systems
Cementing systems
Circulating systems
Bulk drilling, material storage and handling systems
Drilling Floor Electrical Equipment
Pipeline Operations and Components  
Fire Protection Gas detection in drilling fluid handling areas
Hazardous Areas Hazardous area equipment in the drilling fluid handling areas
Pollution Prevention Pollution associated with exploration, development, production, and transportation of oil and gas and sulphur
Operational Requirements Training of drilling personnel
For floating drilling units, a Contingency Plan for moving off location in an emergency situation
Well control drills
Testing of Emergency Disconnect Systems and disconnect functions of blowout preventer
Inspection and testing of all drilling equipment
H2S contingency plan (including equipment, control, and detection systems)
Production test flow-back system (if installed)


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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