On February 17, 2017, the Bureau of Ocean Energy Management (“BOEM”), which manages oil and gas leasing in the Outer Continental Shelf, announced that it is withdrawing previously-issued orders to sole liability property owners. The announcement is likely to be welcome news for the oil & gas industry, which has been grappling with sweeping changes in a BOEM 2016 notice to lessees regarding additional security for decommissioning liabilities (NTL No. 2016-N01).

In NTL No. 2016-N01, BOEM issued changes with respect to its determination of a lessee’s financial capability and decommissioning liability, as well as requirements relating to additional security. Industry participants have expressed concerns that these changes, among other things, could only be issued under a notice and comment rulemaking procedure. Participants were also concerned with the high cost of compliance with the changes and the potential adverse effect on the value of offshore assets. The issues are further complicated given that decommissioning liability extends jointly and severally among colessees and even predecessors-in-interest to leases.