U.K.'s Premier Oil Sees Gulf of Mexico Spill Altering Drilling Worldwide

Premier Oil Plc, a U.K. crude and natural gas explorer, said the Gulf of Mexico oil spill will alter worldwide drilling operations amid the company’s plans to more than double production beyond 2012.

Premier plans to double operating cash flow to about $800 million on an annual basis in the next few years, Chief Executive Officer Simon Lockett said. It aims to more than double output beyond 100,000 barrels of oil equivalent a day following an expansion in Indonesia and the development of the Catcher discovery in the North Sea.

“Generally, governments are more concerned and are being slightly more conservative about taking approaches to the industry,” Lockett said today in a phone interview. “And therefore, we are going to have to end up having to manage our programs in slightly different ways. We all are trying to learn from” the Gulf spill.

BP Plc’s Macondo well blew out in the Gulf of Mexico in April, creating the world’s largest accidental oil spill and killing 11 people. The accident prompted President Barack Obama to suspend deepwater drilling in the Gulf, while governments from Brazil to Australia have pledged to review drilling regulations.

London-based Premier plans to pump about 44,000 barrels of oil equivalent a day this year and has a target to produce 75,000 barrels a day in 2012.

The exploration “program looks quite healthy at the moment” and “there are potential catalysts to make the change,” Lockett said. “The growth will be quite rapid over the next couple of years.”

Lockett forecast a short-term “weakness” in oil prices before they return to a “reasonable” $80 a barrel.

Premier delayed drilling the Gardrofa well in the North Sea until next year as it looks for a suitable rig, Lockett said. The Norwegian authorities earlier this year declined Premier’s request to move forward drilling of the well from the third quarter after requesting additional documentation, the explorer said in July.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

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