Washington (Platts)--20Mar2013/232 pm EDT/1832 GMT

Reviews of offshore oil and gas exploration plans and approval of drilling permits may be delayed by mandatory across-the-board budget cuts known as a "sequester," US Bureau of Ocean Energy Management Director Tommy Beaudreau said Wednesday.

Beaudreau called the mandated sequester budget cuts "a step backwards" in the progress his agency, as well as the Bureau of Safety and Environmental Enforcement, have made in implementing tough new safety standards and speeding the permit process after the 2010 Macondo oil spill in the Gulf of Mexico.

"Folks have worked weekends, folks have worked late nights on plan reviews," Beaudreau said at a news conference in New Orleans after Wednesday's Central Gulf lease sale. "We're in a position now because of sequester where we're going to have to limit that type of activity. We can't have overtime. We can't have people putting in as much of the extra expense into these reviews. I do fear the result may be some prolonged time periods on plan reviews."

He said one of the lessons learned from the spill was that the former Minerals Management Service was "under-resourced." He said Congress responded by providing extra money for the two new regulatory agencies formed after the spill to hire additional staff to help handle the more complicated reviews required under new safety regulations.

"This has allowed us, through extremely hard work, to not only implement the heightened standards, but to increase the efficiency and speed, frankly, of our plan review and permitting processes," Beaudreau said. "And we have seen tremendous progress over the last year and a half or so in that area. Plan review times have come down. Permit review times have come down, all while under the heightened standards.

"What I am afraid of and what is frustrating to me about sequester is I feel that it is a step backwards from there," he said.

--Gary Gentile, gary_gentile@platts.com
--Edited by Jeff Barber, jeff_barber@platts.com

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