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BP Wins U.S. Approval to Drill Well in Gulf’s Deep Waters

BP Plc won its first U.S. permit to drill a new oil well in the Gulf of Mexico’s deep waters, clearing the way for the company to resume exploration after the record offshore spill last year.

BP will drill in 6,034 feet (1,839 meters) of water in the so-called Kaskida prospect, 246 miles (396 kilometers) south of Lafayette, Louisiana, according to a Bureau of Safety and Environmental Enforcement statement today. The London-based company’s exploration plan for the site was approved Oct. 21.

“It’s important for the U.S. to have BP drilling and finding resources,” Jason Kenney, a European oil-industry analyst for Madrid-based Banco Santander SA, said in an interview. “Kaskida will be closely watched, but BP is a very capable deep-water operator.”

BP third-quarter earnings, adjusted for one-time items and changes in inventory, declined 3.6 percent to $5.3 billion as last year’s suspension of drilling after the spill caused Gulf of Mexico output to drop. The recovery of Gulf operations will be “a major factor in operating cash-flow momentum,” Chief Executive Officer Bob Dudley said on an earnings call yesterday.

BP rose 0.8 percent to 461 pence as of the London close, the highest since July 29.

The explosion of BP’s Macondo well about 40 miles off the Louisiana coast last year killed 11 people, spilled 4.9 million barrels of oil and halted exploration in the region.

‘We Are Pleased’

“We are pleased to have received a permit,” BP spokesman Scott Dean said in an e-mailed statement.

BP got three permits to plug and abandon wells this year, letting the company put rigs back to work. Daily production in the region is likely to stagnate at about 250,000 barrels of oil equivalent through next year, Dudley said on the call.

“BP has met all of the enhanced safety requirements that we have implemented and applied consistently over the past year,” Michael R. Bromwich, director of the U.S. offshore drilling-safety regulator, said in a statement. “BP has adhered to voluntary standards that go beyond the agency’s regulatory requirements.”

BP can’t be trusted to operate in deep waters safely, and investors should turn instead to clean technologies that are less risky, Ben Stewart, a Washington-based spokesman for the environmental group Greenpeace, said today in a statement.

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