Coastwise Transportation; Outer Continental Shelf; Wells; Fixed Structure; 46 U.S.C. §§ 55102, 55111; 19 C.F.R. § 4.80.

H349684
May 1, 2026
OT:RR:BSTC:CCR H349684 JLE
CATEGORY: Carriers Sean T. Pribyl, Esq. Holland & Knight, LLP 800 17th Street, N.W. Suite 1100 Washington, DC 20006 RE: Coastwise Transportation; Outer Continental Shelf; Wells; Fixed Structure; 46 U.S.C. §§ 55102, 55111; 19 C.F.R. § 4.80. Dear Mr. Pribyl, This letter is in response to your June 19, 2025, ruling request submitted on behalf of your client, [ ] (the “Company”), regarding whether the use of foreign-flagged vessels on the Outer Continental Shelf (“OCS”), as described below, would violate the coastwise laws.1 Our decision follows. FACTS The following facts are from your client’s ruling request. Your client has requested U.S. Customs and Border Protection (“CBP”) determine whether the use of foreign-flagged vessels 1 You have asked this office for confidential treatment of specific information relating to the identity of your client and their customers, project site locations, number of components utilized, and vessel charters. If this office receives a Freedom of Information Act request for your submission, CBP Regulations (See 19 C.F.R. § 177.2, et seq.) regarding the disclosure of business information provide that the submitter of business information will be advised of receipt of a request for such information whenever the business submitter has in good faith designated the information as commercially or financially sensitive information. We accept your request for confidential treatment as a good faith request.

for transportation in connection with the decommissioning and removal of a remaining non- functional platform at the [ ] installation site on [ ] (the “Site”) on the Outer Continental Shelf (“OSC”) would comply with 46 U.S.C. § 55102 and 19 C.F.R. § 4.80. Particularly, your client’s proposed transportation activities contemplate using a foreign-flag barge to transport the removed topside modules of the rig to a U.S. onshore facility where the topside modules will be brought onshore, dismantled, and recycled; using foreign- flagged tugs to tow the floating hull to a reef site at a pristine location on the OCS; and, using a foreign-flagged vessel to retrieve and transport the disconnected mooring system to a U.S. onshore facility where the mooring lines will be recycled as scrap. The [ ] lease expiration clock commenced once the wells ceased production in [ ] and expired after one year in [ ]. Once the lease terminated [ ], [ ] was prohibited from using the lease or any of the physical assets on the lease for any exploration, development, or production activities. The site must be decommissioned by [ ] within one year by [ ] following lease expiration. You provided the following graphic of the decommissioning process: [ ] You aver that the state of the facilities will comply with all the Bureau of Safety and Environmental Enforcement (“BSEE”) requirements for permanently abandoned wellbores and will be unable to physically produce hydrocarbons. This compliance will occur ahead of any topside removal activity scheduled for the [ ]. More specifically, at the time of topside removal, the platform will no longer be operational as an oil and gas production facility or pipeline hub. All wells will be plugged and permanently abandoned, all topside facilities will be “air-gapped” where the process train will be disconnected at various points thereby no longer permitting oil and gas to be processed through the topside’s equipment, and all pipelines will be cleaned and disconnected from the regional pipeline system. Additionally, the platform cannot be repurposed for other uses such as an 2

offshore wind farm or a commercial fishing port. At that time the platform will be inactive and will simply be a stationary object on the OCS that poses a navigational obstruction to shipping. To decommission the platform, your client will start with the removal of the topside. The topside modules will be placed on a non-coastwise-qualified foreign-flag barge, which will return topside scrap material to a U.S. port for disposal. Once the topside modules are removed, the hull will be disconnected and towed to a pristine OCS seabed site beyond the three-mile U.S. territorial sea by foreign-flagged tugs to create an artificial reef under the “Rigs-to-Reef” program. The mooring system, having been disconnected from the hull, will be retrieved by a foreign-flagged vessel and transported to a U.S. port for disposal. ISSUES 1. Whether the well would lose its designation as a coastwise point after the permanent abandonment. 2. Whether the proposed platform decommissioning process after the permanent abandonment of a well would violate 46 U.S.C. § 55102. 3. Whether the proposed platform decommissioning process after the permanent abandonment of a well would violate the coastwise towing statute, 46 U.S.C. § 55111. LAW AND ANALYSIS Generally, the coastwise laws prohibit the transportation of merchandise between points in the United States embraced within the coastwise laws in any vessel other than a vessel built in, documented under the laws of, and owned by citizens of the United States. Such a vessel, after it has obtained a certificate of documentation with a coastwise endorsement from the U.S. Coast Guard, is said to be “coastwise qualified.” The coastwise laws generally apply to points in the territorial sea, which is defined as the belt, three nautical miles wide, seaward of the territorial sea baseline, and to points located in internal waters, landward of the territorial sea baseline.2 In addition, Section 4(a)(1) of the Outer Continental Shelf Lands Act of 1953 (“OCSLA”), as amended, provides that the Constitution and laws and civil and political jurisdiction of the United States are extended to: (i) the subsoil and seabed of the outer Continental Shelf; (ii) all artificial islands on the outer Continental Shelf; (iii) installations and other devices permanently or temporarily attached to the seabed, which may be erected thereon for the purpose of exploring for, developing, or producing resources, including non-mineral energy resources; or 2 33 C.F.R. § 2.22(a)(2). 3

(iv) any such installation or other device (other than a ship or vessel) for the purpose of transporting or transmitting such resources.3 Section 203 of the OCSLA Amendments of 1978 (92 Stat. 629, 635) (1978 Amendments), amended section 4(a) of the OCSLA by substituting “... and all installations and other devices permanently or temporarily attached to the seabed ...” for “...and fixed structures ....” The legislative history states the purpose of this change was to make it clear “...that Federal law is to be applicable to all activities on all devices in contact with the seabed for exploration, development, and production.” Thus, Federal law was intended “... to be applicable to activities on drilling ships, semisubmersible drilling rigs, and other watercraft, when they are connected to the seabed by drillstring, pipes, or other appurtenances, on the OCS for exploration, development, or production purposes."4 The coastwise law applicable to the transportation of merchandise, often referred to as “the Jones Act,” is found at 46 U.S.C. § 55102,5 and provides in pertinent part: Except as otherwise provided in this chapter or chapter 121 of this title, a vessel may not provide any part of the transportation of merchandise by water, or by land and water, between points in the United States to which the coastwise laws apply, either directly or via a foreign port, unless the vessel— (1) is wholly owned by citizens of the United States for purposes of engaging in the coastwise trade; and (2) has been issued a certificate of documentation with a coastwise endorsement under chapter 121 or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement. The Jones Act only partially defines the term “merchandise,” setting forth that merchandise “includes … merchandise owned by the United States Government, a State, or a subdivision of a State” and “valueless material.”6 CBP also defines the term “merchandise” in 19 U.S.C. § 1401(c) as “goods, wares, and chattels of every description, and includes merchandise the importation of which is prohibited, and monetary instruments as defined in section 5312 of Title 31.” Regarding the well itself, it is our longstanding position that a nonproducing and abandoned, plugged or capped oil well on the U.S. OCS is not a coastwise point subject to the coastwise laws. In Customs Service Decision 83-13, we stated, “[a] non-producing well that has been sealed or plugged as described in the affidavit is not, in our opinion, an installation or other device attached to the seabed of the outer continental shelf for the purpose of exploring for, developing, or producing resources therefrom so that it would be a coastwise point by virtue of 43 U.S.C. § 1333(a). Accordingly, we conclude that the abandoned and plugged well from 3 43 U.S.C. § 1333(a)(1). 4 Reproduced at 1978 U.S.C.C.A.N. 1450, 1534. 5 Formerly 46 U.S.C. App. § 883. See Pub. L. 109-304 (Oct. 6, 2006). 6 See 46 U.S.C. § 55102(a). 4

which the drilling rig is to be transported is not a point subject to the coastwise laws.8 ”7 This is a position which we have consistently followed. It must be noted, however, that the change in coastwise point status by the well when permanently abandoned, plugged or capped does not result in a similar change in the associated oil rig. The inquiry, for purposes of 46 U.S.C. § 55102, is to determine what is a coastwise point. Regarding installations and other devices permanently or temporarily attached to the seabed, there is a statutory element that these be erected on the seabed “for the purpose of exploring for, developing, or producing resources.” 43 U.S.C. § 1333(a)(1)(A)(iii). When the topic is decommissioning activities (“end of life for OCS wells”), CBP’s focus is on the complete terminus of “production.” As CBP’s prior rulings have held, the oil well itself (that part of the installation or device that is embedded in the seabed and subsoil) is considered a coastwise point up until the time it is decommissioned “permanently” – which generally means the wellhead and casings are completely removed to a depth of 15 feet below the seabed per BSEE regulations (see 30 C.F.R. § 250.1716). Thus, CBP has considered even inactive wells to be coastwise points (past CBP ruling letters have referred to these as “temporarily abandoned” wells). See HQ 113113 (June 28, 1994) (“…a well site on the Outer continental shelf which has not been permanently abandoned and capped, remains a location to which the coastwise laws of the United States are extended.”) and HQ 116350 (Jan. 18, 2005) (holding that an exploratory wellhead sunk into the seabed of the OCS for future resource exploration, development or production was a coastwise point). CBP applies the same reasoning to the platforms or other structures above the well itself. Even though the platform is not producing presently (because the well it is associated with is not producing presently), the platform is still attached to the seabed and is still considered a coastwise point until the complete terminus of its production. As with the removal (indeed, destruction) of the well, the platform will not reach the terminus of its production until it is removed. CBP would only consider this geographic area not to be a coastwise point when the well is permanently removed, and the platform associated with it is permanently removed. Accordingly, the platform remains a coastwise point until it is completely removed, at which time – assuming nothing remains at the site other than the permanently plugged well and any other decommissioned fixtures that remain in accordance with BSEE regulations – CBP would consider the location to have returned to pristine seabed status and no longer be a coastwise point. CBP has ruled that a drilling rig at anchor on the OCS, whether preparatory to, at the conclusion of, or during activities related to the exploration or exploitation of the for purposes of the OCSLA.9 OCS, is a “fixed structure” We find consistency between the BSEE regulations that separate the decommissioning of the well and the platform with CBP’s prior 7 Customs Service Decision (“C.S.D.”) 83-13 (Sept. 16, 1982); 17 Cust. B. & Dec. 743. 8 See e.g. HQ 110959 (Aug. 8, 1990), “[w]e have ruled that the plugging and permanent abandonment of a well on the OCS results in the well no longer being considered a coastwise point by virtue of the OCSLA;” see also HQ 116394 (Feb. 8, 2005); “[w]e have ruled, and it is our position, ‘that the plugging and permanent abandonment of a well on the OCS results in the well no longer being considered a coastwise point by virtue of the OCSLA.’” 9 Before the 1978 Amendment, see ruling letters 101523 (Jun. 19, 1975) and 101466 (Jul. 29, 1975), and subsequent rulings see 109516 (Jun. 15, 1988), and 110959 (Aug. 8, 1990). 5

statement that anchors attached to the OCS are fixed structures for the purposes of the OCSLA even at the conclusion of the activities related to exploration and exploitation of the OCS. In the present matter, the topside modules, hull, and mooring lines are held in place by [ ] anchors that are attached to the seabed. Due to this attachment to the OCS, the platform is considered a fixed structure for OCSLA purposes. As CBP previously stated, a fixed structure remains related to the purposes of the OSCLA even at the conclusion of activities related to the exploration or exploitation of the OCS. Thus, the platform would still be considered a U.S. coastwise point even after permanent abandonment of the well. Therefore, transportation of the topside modules, mooring system, and anchors by a non-coastwise-qualified vessel between the platform and another U.S. coastwise point, such as a U.S. port, would violate the coastwise laws. We further note that your client proposes using a foreign-flag barge to transport the removed topside modules of the rig to a U.S. onshore facility where the topside will be brought onshore, dismantled, and recycled. Since barges are often incapable of self10 -propulsion, we are obliged to address the applicability of the coastwise towing statute to the activities described in the FACTS section above. The coastwise towing statute, 46 U.S.C. § 55111, provides, in pertinent part: (a) IN GENERAL.—Except when towing a vessel in distress, a vessel may not do any part of any towing described in subsection (b) unless the towing vessel— (1) is wholly owned by citizens of the United States for purposes of engaging in the coastwise trade; and (2) has been issued a certificate of documentation with a coastwise endorsement under chapter 121 of this title or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement. (b) APPLICABLE TOWING.—Subsection (a) applies to the towing of— (1) a vessel between ports or places in the United States to which the coastwise laws apply, either directly or via a foreign port or place; (2) a vessel from point to point within the harbors of ports or places to which the coastwise laws apply; or …. The CBP Regulations at 19 C.F.R. § 4.92 provide, in pertinent part: No vessel other than a vessel documented for the coastwise trade, or which would be entitled to be so documented except for its tonnage (see § 4.80), may tow a vessel other than a vessel in distress between points in the U.S. embraced within the coastwise laws, or for any part of such towing …. “Towage service is the employment of one vessel to expedite the voyage of another.” Sacramento Navigation Co. v. Salz, 273 U.S. 326 (1927). “A towage service is one which is rendered for the mere purpose of expediting her voyage, without reference to any circumstances of danger.” The Mercer, 297 F. 981 (2d Cir. N.Y. 1924). “When a tug is called or taken by a sound vessel as a mere means of saving time, or from considerations of convenience, the service 10 Former 46 U.S.C. App. § 316(a) recodified as 46 U.S.C. § 55111, pursuant to P.L. 109-304 (October 6, 2006). 6

is classed as towage;….” The Flottbek, 118 F. 954 (9th Cir. Wash. 1902). Insofar as the oil rig remains a coastwise point after the associated well is plugged and abandoned, towing the barge between the rig site and U.S. onshore facility where the topside modules will be brought onshore, dismantled, and recycled would constitute coastwise towing. Therefore, use of non-coastwise- qualified tugs as proposed is in violation of the provisions of 46 U.S.C. § 55111. Regarding your client’s proposal to disconnect the hull from the mooring system and tow it to a pristine OCS seabed site beyond the three-mile U.S. territorial sea to create an artificial reef under the “Rigs-to-Reef” program, CBP previously has determined that OCSLA jurisdiction does not reach activity occurring on the pristine seabed of the OCS where there is no installation or device attached to the seabed, and thus for Jones Act purposes no coastwise point exists. See, e.g., HQ 115069 (June 14, 2000) (noting a pristine site “is not considered to be a coastwise point”). Accordingly, the hull may be towed from its mooring site to a site on the pristine seabed of the OCS for disposal as an artificial reef by non-coastwise-qualified vessels because no transportation will occur between two coastwise points. HOLDINGS 1. If the permanent abandonment and plugging of the well meets the relevant BSEE regulation standards, the well would no longer be considered a coastwise point. 2. The platform remains a coastwise point after the well is plugged and abandoned. Therefore, transportation of passengers or merchandise between the platform for the removal of the topside modules, the mooring system, and anchors with a non-coastwise-qualified vessel to a different United States coastwise point for disposal would violate 46 U.S.C. § 55102 and 19 C.F.R. § 4.80.11 Also, towage of a barge to transport the removed topside components ashore for recycling would require the use of coastwise-qualified tugs in compliance with 46 U.S.C. § 55111. 3. Towing of the hull to a pristine seabed site on the OCS beyond U.S. territorial waters using a foreign-flag vessel would not violate the coastwise laws. Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a Customs Service field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.” If the facts at 11 Although the ruling request did not reference the transportation of passengers, we note that any such transportation would need to occur on coastwise-qualified vessels to ensure compliance with the Passenger Vessel Services Act, 46 U.S.C § 55103. 7

hand vary from the facts stipulated to herein, this decision shall not be binding on CBP as provided for in 19 C.F.R. § 177.2(b)(1), (2) and (4), and § 177.9(b)(1) and (4). Sincerely yours, W. Richmond Beevers. Chief Cargo Security, Carriers, and Restricted Merchandise Branch Office of Trade, Regulations and Rulings U.S. Customs and Border Protection 8