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North Dakota reviving waivers that extend idle well duration

BISMARCK (AP) — North Dakota regulators are planning to revive a policy amid the coronavirus pandemic that allows oil producers to receive waivers so that a well can remain inactive for more than a year.
The state Oil and Gas Division will sort out details after state regulators on Tuesday directed them to resurrect the policy that was in place from 2015 to 2017. If a well has not generated any oil for one year, North Dakota usually requires companies to permanently plug it or otherwise resume the operation.
North Dakota Mineral Resources Director Lynn Helms told the Industrial Commission that the policy would apply when the cost of West Texas Intermediate, a grade of oil deemed the U.S. pricing benchmark, drops under $50 per barrel. That price has stayed in the $20 to $30 range over the past week after plummeting from above $60 at the start of the year.
North Dakota oil is worth even less because it must be transported to market by pipeline or train, which costs several dollars per barrel.
“Today, a North Dakota Bakken producer is getting somewhere between $13 and $18 a barrel,” Helms said.
Helms said he expects more inactive wells in the months ahead as companies react to low oil prices. North Dakota recently bolstered guidelines surrounding abandoned wells in a move to prevent companies from evading their obligation to cap and clean up well sites, which would otherwise force the state to step in and potentially assume those costs.
From December to January, companies in North Dakota idled nearly 700 additional wells, according to the latest available state data. The number of wells drilled but not finished jumped by 66 to 1,024.
That happened before prices plunged substantially earlier this month after a Russia and OPEC alliance to curb oil production fell apart.
But prices were slowly falling even before the collapse as demand for oil dropped while the coronavirus spread, halting travel and business throughout the world, particularly in China.
For most people, the coronavirus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia, or death.
The state Health Department on Tuesday confirmed four new cases of COVID-19, bringing the total number of positive cases in North Dakota to 36.