Houston company accepts responsibility for oil spill off Louisiana

[Finfeatherfur]

Originally Posted by Ray

The original company that drilled the well is responsible for plugging and abandoning it. It is called "cradle to grave law". So if this company bought an old platform, had a spill and walked away, it might go bankrupt, but the original operator is ultimately responsible.
Also, every well that is drilled has a $$$ amount put into an account to cover costs of P&Aing the well if the gov't has to take over. This account had billions in it at one time, not sure if the gov't took it out and used it for anything else.

Whoever has the "P&A Liability" determined in the sale of the property is responsible. It is not necessarily the original company that drilled it. We negotiate and handle transfer of properties all the time, and that is a big part of negotiations. Sometimes a platform is at the end of it's production life cycle and is still producing. Some companies can come in a do re-entry work to stimulate the formations, but the payback may not be enough to cover P&A cost. Thus, the original well owner would be responsible for the P&A operations, unless the purchaser agress to it, which would de-value the facility greatly. It's all about the "deal" just like buying a house.