Australia's Oil Regulator Again Seeks More Information on BP's Drill Plan -- Update
September 28 2016 - 9:39AM
Dow Jones News
By Sarah Kent
LONDON--Australia's oil and gas regulator on Wednesday threw a
wrench in BP PLC's plans to drill deepwater oil-exploration wells
off the country's southern coast, requesting more information on
how the company intends to manage environmental risks before it
will provide approval. BP said it plans to start drilling this
year, subject to receiving the necessary permits.
Australian environmental groups have criticized the British oil
giant's plan to explore for oil in the Great Australian Bight, a
remote stretch of ocean that is home to whales, sea lions and other
wildlife. They say a deep-sea well blowout could imperil endangered
animals, and that BP's emergency-response plans are
insufficient.
"The risks posed by this project to the environment and the
economy of coastal communities across southern Australia are simply
too great," Peter Owen, the director of the environmental
protection group The Wilderness Society in South Australia, said in
a prepared statement.
Australia's National Offshore Petroleum Safety and Environmental
Authority has given BP a month to provide additional information
before reconsidering the company's proposal.
"This is not a rejection or an acceptance--it is a request to
clarify aspects of our plan and for us to provide information that
has not been included in the plan," BP said in a prepared
statement.
This is the third time the offshore petroleum authority has
asked BP for changes or additional information about its
environmental plans, and comes after academics, environmentalists
and politicians critical of the proposal claimed BP didn't have an
adequate strategy to respond to a spill. The regulator didn't give
a reason of its latest request for more information, and a
spokesman for the authority said he wasn't permitted to speak about
the specific details it requested.
The decision comes during a difficult time for the oil and gas
industry, which has been buffeted by a steep drop in oil prices
over the past two years. Companies have slashed their budgets and
laid off thousands of workers as profits plummeted. BP expects to
spend less than $17 billion on finding and producing oil this year,
down from nearly $23 billion in 2014.
The Australian Bight remains attractive for its potential to
become a vast new oil basin. BP has said its geology is similar to
some of the world's biggest oil and gas regions, such as the
Mississippi Delta. Other oil companies including Chevron Corp. and
Statoil ASA have licenses to drill in the region.
Australia first gave BP permits to explore in the Australian
Bight in 2011, months after a fatal blowout on a BP-operated rig in
the Gulf of Mexico claimed 11 lives and sent millions of barrels of
oil spewing into the ocean. BP says the disaster has led to
significant changes in the industry and the company, which have
been applied in its preventive planning for Australia.
"Since the 2010 Deepwater Horizon accident in the Gulf of
Mexico, BP and the industry have advanced equipment, procedures and
training/competency management in the areas of drilling safety and
prevention; containment; and oil spill response," BP said in a
submission to the Australian Senate in March.
"Whilst the priority for planning is to prevent any accidents,
the impact of potential unplanned events--e.g. oil spills--is
modeled and prepared for in significant detail," it said.
Write to Sarah Kent at sarah.kent@wsj.com
(END) Dow Jones Newswires
September 28, 2016 09:24 ET (13:24 GMT)
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