Interior Department awards $14.4M contract for offshore well decommissioning and safety operations

Contract Overview

Contract Amount: $14,399,351 ($14.4M)

Contractor: Promethean Operating I LLC

Awarding Agency: Department of the Interior

Start Date: 2025-09-16

End Date: 2026-09-16

Contract Duration: 365 days

Daily Burn Rate: $39.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: T06 - 'MAKE SAFE' OPERATIONS, WELL DIAGNOSTIC TESTING, WELL DECOMMISSIONING, AND POST PLUGGING ASSESSMENTS IN THE WEST DELTA AND HIGH ISLAND AREAS THE CONTRACTOR SHALL PROVIDE ALL LABOR, EQUIPMENT, MATERIALS, AND SUPERVISION NECESSARY T

Place of Performance

Location: NEW ORLEANS, JEFFERSON County, LOUISIANA, 70123

State: Louisiana Government Spending

Plain-Language Summary

Department of the Interior obligated $14.4 million to PROMETHEAN OPERATING I LLC for work described as: T06 - 'MAKE SAFE' OPERATIONS, WELL DIAGNOSTIC TESTING, WELL DECOMMISSIONING, AND POST PLUGGING ASSESSMENTS IN THE WEST DELTA AND HIGH ISLAND AREAS THE CONTRACTOR SHALL PROVIDE ALL LABOR, EQUIPMENT, MATERIALS, AND SUPERVISION NECESSARY T Key points: 1. Contract focuses on critical environmental safety and well integrity in the Gulf of Mexico. 2. Promethean Operating I LLC secured the award, indicating a need for specialized services. 3. The contract duration of one year suggests a need for ongoing or immediate operational support. 4. Fixed-price contract type aims to control costs and provide predictable spending. 5. Geographic focus on West Delta and High Island areas highlights specific operational zones. 6. The contract supports the Bureau of Safety and Environmental Enforcement's mission.

Value Assessment

Rating: good

The contract value of $14.4 million for a one-year term appears reasonable for specialized offshore environmental and safety services. Benchmarking against similar 'make safe' operations and well decommissioning contracts in the Gulf of Mexico would provide a more precise value-for-money assessment. The firm-fixed-price structure is generally favorable for cost control. However, without detailed breakdowns of labor, equipment, and materials, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple qualified bidders had the opportunity to submit proposals. This competitive process is expected to drive fair pricing and encourage efficient service delivery. The number of bidders and the specific evaluation criteria would further illuminate the strength of the competition and its impact on the final award price.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and higher quality services, ensuring federal funds are used efficiently.

Public Impact

Benefits the environment by ensuring the safe decommissioning of offshore oil and gas infrastructure. Protects marine ecosystems in the West Delta and High Island areas of the Gulf of Mexico. Supports the operational readiness and regulatory compliance of the Bureau of Safety and Environmental Enforcement. Ensures the integrity of wells, preventing potential environmental hazards. Contributes to the safe and responsible management of legacy oil and gas assets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen complexities arise during well decommissioning.
Dependence on specialized equipment and skilled personnel, which may have limited availability.
Environmental risks associated with offshore operations, despite safety protocols.
Contract duration may be insufficient for comprehensive decommissioning of all targeted wells.

Positive Signals

Firm-fixed-price contract helps mitigate cost uncertainty for the government.
Full and open competition suggests a robust selection process for the contractor.
Focus on safety and environmental protection aligns with regulatory priorities.
Clear scope of work for well diagnostic testing and decommissioning.

Sector Analysis

This contract falls within the Support Activities for Oil and Gas Operations sector, specifically addressing the critical need for well decommissioning and safety in mature offshore regions. The Gulf of Mexico, particularly areas like West Delta and High Island, has a significant number of legacy wells requiring attention. Spending in this niche area is driven by regulatory requirements and environmental stewardship, aiming to mitigate risks associated with aging infrastructure. Comparable spending benchmarks would likely be found in contracts awarded by agencies like the Bureau of Ocean Energy Management (BOEM) and other international bodies managing offshore resources.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. The award to Promethean Operating I LLC, a single entity, suggests that the primary focus was on technical capability and capacity for this specialized work. There is no explicit information regarding subcontracting plans for small businesses within this award. Future analysis could explore whether the prime contractor has a history of engaging small businesses in their supply chain.

Oversight & Accountability

Oversight for this contract will primarily be managed by the Bureau of Safety and Environmental Enforcement (BSEE), a division of the Department of the Interior. BSEE is responsible for ensuring compliance with safety and environmental regulations in the offshore oil and gas industry. The firm-fixed-price contract type provides a degree of financial oversight by setting a ceiling on costs. Transparency is expected through contract reporting mechanisms, and any significant issues or disputes would likely fall under the purview of BSEE's contract officers and potentially the Department of the Interior's Inspector General.

Related Government Programs

Offshore Oil and Gas Well Decommissioning
Environmental Remediation Services
Gulf of Mexico Energy Infrastructure Management
Oil Spill Prevention and Response
Bureau of Safety and Environmental Enforcement (BSEE) Operations

Risk Flags

Environmental Risk
Operational Complexity
Cost Overrun Potential
Specialized Resource Availability

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $14.4 million to PROMETHEAN OPERATING I LLC. T06 - 'MAKE SAFE' OPERATIONS, WELL DIAGNOSTIC TESTING, WELL DECOMMISSIONING, AND POST PLUGGING ASSESSMENTS IN THE WEST DELTA AND HIGH ISLAND AREAS THE CONTRACTOR SHALL PROVIDE ALL LABOR, EQUIPMENT, MATERIALS, AND SUPERVISION NECESSARY T

Who is the contractor on this award?

The obligated recipient is PROMETHEAN OPERATING I LLC.

Which agency awarded this contract?

Awarding agency: Department of the Interior (Bureau of Safety and Environmental Enforcement).

What is the total obligated amount?

The obligated amount is $14.4 million.

What is the period of performance?

Start: 2025-09-16. End: 2026-09-16.

What is Promethean Operating I LLC's track record with similar federal contracts, particularly in well decommissioning and environmental safety?

A review of federal contract databases indicates that Promethean Operating I LLC has been awarded contracts related to oil and gas operations, including some for well services. However, specific details on their experience with large-scale 'make safe' operations, well diagnostic testing, and comprehensive decommissioning projects, especially in the challenging offshore environment of the Gulf of Mexico, require deeper investigation. Analyzing past performance evaluations and contract modifications for previous BSEE or similar agency contracts would provide a clearer picture of their capabilities, reliability, and adherence to safety and environmental standards. Understanding their history with firm-fixed-price contracts of this magnitude is also crucial for assessing their suitability for this award.

How does the $14.4 million contract value compare to the average cost of similar offshore well decommissioning projects?

The $14.4 million contract value for a one-year term for 'make safe' operations, well diagnostic testing, and decommissioning in the West Delta and High Island areas is a significant investment. Benchmarking this against industry data for offshore well decommissioning is complex due to variations in well depth, complexity, location, and regulatory requirements. However, reports suggest that decommissioning a single deepwater well can range from several million to tens of millions of dollars. This contract likely encompasses multiple wells or a significant phase of work. A detailed cost-benefit analysis would require comparing the scope of services and the number of wells/platforms addressed against publicly available cost data for similar projects managed by BSEE or international counterparts. The firm-fixed-price nature suggests an attempt to contain these potentially variable costs.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

The primary risks associated with this contract include unforeseen subsurface conditions that could increase decommissioning complexity and costs, potential environmental incidents during operations, and the availability of specialized equipment and skilled labor. Given the firm-fixed-price structure, cost overruns due to unexpected complexities represent a significant financial risk for the contractor, which could impact project timelines or quality if not managed effectively. Environmental risks, though mitigated by BSEE's stringent regulations, remain a concern in offshore operations. Mitigation strategies likely include thorough pre-award risk assessments by BSEE, detailed operational plans from Promethean Operating I LLC, adherence to strict safety protocols, emergency response preparedness, and potentially performance bonds. The contract's emphasis on 'make safe' operations suggests a phased approach to manage immediate risks before full decommissioning.

How effective is the Bureau of Safety and Environmental Enforcement (BSEE) in overseeing contracts for offshore environmental and safety operations?

The Bureau of Safety and Environmental Enforcement (BSEE) is the primary federal agency responsible for regulating safety and environmental protection for offshore oil and gas operations on the U.S. Outer Continental Shelf. BSEE has a mandate to ensure that companies operating offshore meet stringent safety and environmental standards, including well integrity and decommissioning. Their effectiveness in contract oversight is generally considered robust, given their specialized mission and regulatory authority. BSEE employs inspectors and technical experts to monitor compliance and performance. However, like any large regulatory body, challenges can arise from resource limitations, the complexity of offshore operations, and the dynamic nature of the industry. Past IG reports and performance reviews of BSEE's contract management practices would offer a more detailed assessment of their oversight effectiveness.

What is the historical spending trend for 'make safe' operations and well decommissioning by the Department of the Interior in the Gulf of Mexico?

Historical spending by the Department of the Interior, particularly through the Bureau of Safety and Environmental Enforcement (BSEE), on 'make safe' operations and well decommissioning in the Gulf of Mexico has been substantial and is driven by regulatory requirements and the need to manage aging infrastructure. While specific annual figures fluctuate based on the number and complexity of wells requiring attention, there has been a consistent allocation of funds towards these activities. Factors influencing spending include the age of the infrastructure, enforcement of decommissioning mandates, and the discovery of previously unaddressed environmental risks. Analyzing BSEE's budget allocations and contract awards over the past decade would reveal trends, potentially showing an increasing focus on decommissioning as older fields mature and environmental regulations tighten.

Industry Classification

NAICS: Mining, Quarrying, and Oil and Gas Extraction › Support Activities for Mining › Support Activities for Oil and Gas Operations

Product/Service Code: NATURAL RESOURCES MANAGEMENT › ENVIRONMENTAL SYSTEMS PROTECTION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2200 POST OAK BLVD STE 1000, HOUSTON, TX, 77056

Business Categories: Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $16,392,299

Exercised Options: $14,399,351

Current Obligation: $14,399,351

Actual Outlays: $7,090,106

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 140E0123D0002

IDV Type: IDC

Timeline