[Ray]

Good news
Yesterday, we received the great news that the drilling permit for Cardamom in the Gulf of Mexico was approved. This is significant in that it is the first permit for drilling a new deepwater well based on an Exploration Plan that has been approved after the moratorium was imposed in early 2010.

However, the story doesn’t stop with Cardamom. Shell has submitted other exploration and development plans and is progressing additional permits to drill. It is important that these plans and permits are reviewed in a timely manner. We are particularly concerned about the time lost on our leases due to the moratorium and delays in permitting due to the new requirements.

Bad News
This week, at the request of the President, the Department of Interior released a report that indicates that "more than two-thirds of offshore leases in the Gulf of Mexico and more than half of onshore leases on federal lands remain idle, neither producing nor under active exploration and development by companies who hold those leases." Additionally, “Use It, Or Lose It” or “Idle lease” legislative scheme that hurts our industry was recently introduced in Congress.

It is disappointing that the President has resurrected the allegations of “idle leases.” It reflects a misunderstanding of the business and the hard work – often years of hard work - that must be done before a well is drilled.

At a time when companies are unable to develop existing leases due to delays in getting their drilling permits, this legislation is not useful. We urge policy makers to come together around the facts and focus on real energy solutions that make sense for America. Solutions, for example, that support the timely and efficient permitting of oil and gas prospects particularly in the Gulf of Mexico and in Alaska.