Statoil Revives BP's Plans to Drill in Great Australian Bight
June 09 2017 - 2:55AM
Dow Jones News
By Robb M. Stewart
MELBOURNE, Australia--Norway's state-owned oil giant Statoil ASA
(STL.OS) has revived plans dropped by BP PLC (BP.LN) to drill
deepwater wells in a search for oil off Australia's southern coast,
an area of wild seas that environmental groups want to see
protected from exploration.
In a swap of exploration rights over claims in the Great
Australian Bight, Statoil said it had strengthened its position in
an unproven but promising basin. The deal with BP has the approval
of Australia's National Offshore Petroleum Titles Administrator and
comes with an extension on approval to drill one exploration well
by late 2019.
Last October, BP gave up on plans to drill wells in the Bight,
saying the projects didn't stack up financially against other
opportunities globally.
That came after oil and natural-gas regulators sought more
information from the company on how it intended to manage
environmental risk in a remote stretch of ocean that is home to
whales, sea lions and other wildlife. Environmental organizations
has said a deep-sea well blowout could put endangered animals at
risk, and claimed BP's emergency-response plans weren't
sufficient.
Statoil said it had swapped its minority 30% stakes in two
offshore exploration permits for BP's 70% equity interests in two
other permits, including the EPP39 permit that contains the
proposed Stromlo well. In December, BP withdrew its environmental
plan submissions for the Stromlo and Whinham wells
Paal Haremo, vice president of exploration in Australasia at
Statoil, in a statement said the Scandinavian company was pleased
to have found a way forward for its exploration project in the
Bight. He said Statoil had already mapped a number of prospects in
its licence area, including the candidate Stromlo well.
"We have a good understanding of the geology in our licence
area, based on high-quality 3D data analysis," he said, adding the
company would now prepare for drilling, building on the previous
work to redevelop plans.
It will be up to Australian regulatory authorities to grant the
necessary approvals for activity to go ahead.
Greenpeace said Statoil's intention to drill would face intense
opposition, and said regulators shouldn't approve its plans in what
is an environmentally sensitive area.
"The Great Australian Bight has some of the most extreme weather
conditions on the planet. Extreme deepwater drilling under such
conditions is too risky," Greenpeace campaigner Jonathan Moylan
said.
Stretching about 1,000 miles between the states of South
Australia and Western Australia, the Bight is a marine reserve
whose rich fishing grounds yield tuna and other prize species, as
well as fearsome Great White sharks popular with thrill-seeking
tourists who view them from the safety of diving cages.
Other oil companies have sought to explore in the region,
including Chevron Corp. (CVX) which bought two deep-water
exploration permits in the Bight in October 2013.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
June 09, 2017 02:40 ET (06:40 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Chevron (NYSE:CVX)
Historical Stock Chart
From Aug 2024 to Sep 2024
Chevron (NYSE:CVX)
Historical Stock Chart
From Sep 2023 to Sep 2024