BP Wins U.S. Approval for First Drilling Plan Since Macondo
BP Plc (BP/) received U.S. permission for oil exploration in the deep waters of the Gulf of Mexico, the first approval since the company’s Macondo well caused the nation’s worst offshore spill last year.
The company must obtain a permit before drilling begins in a field about 192 miles (309 kilometers) off the Louisiana coast, according to the Bureau of Ocean Energy Management, which announced approval of BP’s plan today in an e-mailed statement.
“This is definitely progress,” said Iain Armstrong, an analyst at broker Brewin Dolphin Ltd. in London. “I don’t think the ship’s quite turned around yet, but the compass is pointing in the right direction.”
BP Chief Executive Officer Robert Dudley is seeking to revive U.S. output in the Gulf as the lack of new wells drags down production. The London-based company waited almost a year to submit drilling plans while it reviewed safety after President Barack Obama in October 2010 lifted a moratorium on deep-water work imposed after the well blowout and the spill.
BP rose as much as 3.2 percent in London trading after the announcement, and climbed 2.2 percent to 439.4 pence at the close. The stock is up 13 percent this month.
BP will comply with U.S. safety requirements added after the spill, as well as standards the company imposed on itself, which exceed government rules, according to a company statement.
“We are working through the regulatory process” to drill in the Kaskida Field, according to the e-mailed statement. “Exact timing for commencement of drilling is subject to approval of the regulator.”
BP is planning to drill Gulf wells in water as deep as 6,034 feet (1,839 meters), according to the agency statement. The Macondo well was in about 5,000 feet of water 40 miles south of Louisiana.
“Our review of BP’s plan included verification of BP’s compliance with the heightened standards that all deep-water activities must meet,” Tommy Beaudreau, the bureau director, said in the statement.
‘Keys to Drill’
“Comprehensive safety legislation hasn’t passed Congress, and BP hasn’t paid the fines they owe for their spill, yet BP is being given back the keys to drill in the Gulf,” Markey said. “The major investigations into the BP oil spill disaster are now complete and it is time to assess and levy the fines against BP for its damage to the environment and economy.”
Starting work in the Gulf is part of Dudley’s campaign to repair BP’s standing with investors, regulators and the U.S. public. The company wrote off $41 billion in costs related to the spill caused by a blowout on the Deepwater Horizon rig that killed 11 people.
“This is a company that spent the weeks following the blowout concentrating on its PR strategy, making a series of optimistic claims that were invariably at odds with the unfolding reality,” Ben Stewart, a London based spokesman for environmental group Greenpeace, said in an e-mail. “Now they’ve been let back into the Gulf of Mexico to conduct the kind of drilling operation that nearly bankrupted the company.”
BP reports third-quarter earnings on Oct. 25.
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