Oilfield Site Restoration Program

The Louisiana Oilfield Site Restoration Program was created in 1993 within the Department of Natural Resources, which is now known as the Department of Conservation and Energy, to address the growing problem of unrestored "orphaned" oilfield sites across the State. Orphaned sites are oil and gas wells or production facilities for which no viable responsible party can be located, or where such party has failed to maintain the site in accordance with State regulations. The specific focus of the Oilfield Site Restoration Program is to properly plug and abandon orphan wells and to restore sites to approximate pre-wellsite conditions suitable for redevelopment.

Oilfield site restoration projects range in size and scope from the repair of small wellhead leaks and the removal of exploration and production related trash and debris to the plugging of wells and removal of associated facilities and structures. Orphaned wells are found throughout the State in all areas where there has been historic oil and gas activity. These sites deteriorate over time due to neglect from the operator of record and therefore become susceptible to releasing oil, gas, and saltwater to the surrounding area. The Program has addressed sites near schools and public buildings, in sensitive coastal wetland areas and near residential areas.

Orphaned sites are prioritized to direct available funding to those sites that pose the greatest threat to public safety and environment. However, in order to also economically decrease the total number of orphaned wells in the State, lower priority sites located near a proposed project area are often included in the project scope of work to increase cost-effectiveness by lowering overall individual well plugging costs. Project design and oversight is handled by in-house petroleum engineering staff while all other restoration-specific tasks are contracted to approved oilfield contractors. Project bids are solicited in accordance with the State bid law and projects are awarded to the lowest qualified bidder.

Revenue for the Program is entirely generated from fees on oil and gas production and inactive wells in the State of Louisiana which are paid by Louisiana oil and gas operators. These fees are deposited to the oilfield site restoration fund (Fund) which is dedicated by statute to fund the operation of the Program. No general fund tax dollars are utilized. The fee for full-rate wells varies from one and one-half cents ($.015) to four and one-half cents ($.045) for every barrel of oil and condensate produced based on the average preceding year oil price, and three-tenths of one cent ($.003) for every thousand cubic feet of gas produced. This currently equates to roughly $15 million dollars a year to be utilized by the Program for orphan oilfield site restoration projects.

In accordance with the provisions of the Oilfield Site Restoration Law (LSA R.S. 30:80 et seq), when a transfer of ownership interest of an oilfield site occurs, either party of the transfer can elect to file an application to establish a site specific trust account (SSTA) to cover future site restoration costs. To the extent permitted under the law, once established and fully funded, a SSTA will release from liability the Transferor and all prior responsible parties for site restoration costs for the transferred oilfield site. Thereafter, the Transferee will be considered the responsible party for the purposes of site restoration. For more information, please see the document entitled 'Establishing a Site Specific Trust Account' or contact Program staff.

The basis for SSTA minimums has been updated per the August 2021 memorandum from Commissioner Ieyoub.  Acceptable funding mechanisms are provided in the June 2023 memorandum from Commissioner Edwards.

The following documents and forms related to SSTAs are also available:

Funding Policy (8/2021)

Acceptable Funding (6/2023)

Qualified Cost Spreadsheet

Qualified Cost User Guide

FORM 9604 - Site Specific Trust Account

FORM 9604-1 - SSTA Reassessment

The operator of record for an orphan wellsite is in all cases the primary party required to restore an oilfield site once it becomes unusable. This responsibility remains whether or not a site specific trust account has been established for this purpose. Should a site be restored using monies from the Fund, and if a fully-funded site specific trust account does not exist for the site, former operators and their working interest owners may then also have some liability in addition to the responsible party for repayment of the monies spent from the Fund.

The process of recovery of site restoration costs of orphaned oilfield sites from the responsible party and others who may share in this liability is addressed in LSA-R.S. 30:93. The Secretary of the Department of Conservation and Energy is empowered by law to recover all costs incurred by the Program resulting from orphan site restoration operations. The procedures to be utilized in this matter are dependent on the specific cost of site restoration activity and whether or not a site specific trust account has been established for the site restored. For a site without a site specific trust account, the Secretary is authorized to collect only from the responsible party (i.e. the last operator of record and his working interest owners) unless the cost of the site restoration exceeds $250,000, at which time all former operators and working interest owners become liable for the entire restoration cost in inverse chronological order. 

For purposes of cost recovery, the program considers a single site to be all wells and facilities for an operator in a field.

The OSR Program is operated by the Department of Conservation and Energy. Program oversight is provided by the Natural Resources Trust Authority (NRTA), under the direction of the secretary and subject to oversight by the State Mineral and Energy Board via the NRTA Committee.  The NRTA Committee meets monthly in Baton Rouge in conjunction with State Mineral and Energy Board monthly meeting.

Only those contractors on the list of contractors approved by the Oilfield Site Restoration Commission as of the first public notice of a bid solicitation are eligible to participate in the bid solicitation process. (Reference: Louisiana Oilfield Site Restoration Law, R.S. 30:80 et seq., ACT 404 of 1993). Pre-registration and completion of a Mandatory site visit are typically required to be eligible to submit a bid.

Applications are reviewed by OSR staff for completeness and then presented by staff at the next quarterly OSR Commission meeting for approval. Contractors are eligible to bid on projects once approved by the OSR Commission. Contact OSR staff for dates of upcoming quarterly meetings.

New contractors should complete the OSR New Contractor Application, then log in to the OSR Contractor Program below to upload the application. 

OSR CONTRACTOR PROGRAM