MFI-54 Well Containment Service Providers

This document addresses joint interest accounting issues related to regulations implemented by the Bureau of Safety and Environmental Enforcement (BSEE) in 2011. These regulations require operators drilling in the deepwater Gulf of Mexico to secure and have available, on standby, well containment equipment. Two companies currently provide the necessary well containment equipment and services and charge fees based upon different ownership and pricing structures. This document provides guidance as to how and when these costs can be charged to the joint account. September 2013. 32 pages.

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Table of Contents

  1. Introduction
  2. Background
  3. Charges from Well Containment Service Providers
    1. Example 1 – Vendor A – owns well containment equipment – charges a per-well fee
    2. Example 2 – Vendor B – does not own the equipment but has access to equipment – charges to become member of Vendor B
    3. Comparison of Vendor A and Vendor B
  4. Chargeability of Fees/Costs Charged by Well Containment Service Providers
    1. General Chargeability Concepts
    2. Chargeability of Specific Costs
    3. Other Chargeability Issues
  5. Accounting Procedure Provisions for Well Containment Service Provider Costs
  6. Exhibit #1A – Allocation of Vendor B charges to original members for their share of cost of equipment based on number of wells drilled
  7. Exhibit #1B – allocation of Vendor B charges to new members for their share of cost of equipment based on number of drilling & completion days
  8. Exhibit #1C – allocation of Vendor B initiation fee
  9. Exhibit #1D – allocation of Vendor B quarterly member fee
  10. Exhibit #1E – allocation of Vendor B costs of required containment exercises
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