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Ensco, Government Negotiating Settlement on Permit Applications

Attorneys for Ensco Offshore Inc. and the federal government are jointly pursuing an extension of the deadline for the Interior Department to act on offshore permit applications so that the two sides can continue ongoing settlement negotiations.

Specifically Ensco and the federal government have asked the U.S. District Court of Louisiana to grant a 11-day stay of its May 10 order, which required Interior to act on six offshore permit applications within 30 days. The permit applications were filed by companies that contracted with Broussard, LA-based Ensco Offshore, a provider of offshore drilling services.

"The parties have been engaged in settlement negotiations that would resolve Ensco Offshore Co.'s remaining claims in this case without further litigation. The parties have made significant progress, but have not yet reached a final agreement," Ensco and the federal government told District Judge Martin Feldman. "Parties believe that further negotiations may enable [them] to reach a mutually agreeable resolution."

The two sides have asked Feldman to give Interior until June 20 to act on the pending permit applications. "If the parties are unable to reach settlement by June 20," they said they "may file a motion for an extension of the stay to allow for continued negotiation."

In the May 10 order, Feldman said Ensco's applications filed with Interior had been "unreasonably delayed," and he ordered Interior to act on them with dispatch. "In several cases in the permit applications here, the agency did hold onto the application for more than [the allotted] 30 days before returning it to the applicant for modifications. At some point this must end -- with a permit, or without," he wrote.

And while "the government has begun to issue some permit applications, plainly because of this lawsuit, the future of drilling in the Gulf of Mexico remains elusive; plaintiffs' [Ensco Offshore, et al.] other long-standing permit applications speak loudly to this," Feldman said.

"The government has presented no credible assurances that the permitting process will return to one marked by predictability and certainty. Processing a scant few applications is at best a tactical ploy in a real world setting."

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