UPDATE 2-BP plans slow return to Gulf drilling

Tue Jul 26, 2011 9:38pm GMT
 

By Tom Bergin
    LONDON, July 26 (Reuters) - BP Plc has not yet
applied for permission to drill its first new Gulf of Mexico
oil well since the 4 million-barrel Macondo spill a year ago,
the oil major said on Tuesday, although it received permission
this month to plug an old well.
    The London-based company said it hoped to restart drilling
by the end of the year, but added it was still working to
improve drilling procedures before making applications.
    "We are making sure we have our standards in place for us
to go forward," Chief Executive Bob Dudley told analysts
Tuesday on a conference call.
    Peter Hutton, analyst at RBC Capital Markets, noted on a
call between analysts and management: "So far this year, Shell
have had 16 (drilling permits approved), Chevron have had 23,
BHP have had 15, Exxon has had 11 and BP has had nil."
    President Barack Obama banned oil and gas drilling from
late May to mid-October last year after BP's deepwater Macondo
well ruptured and spewed more than 4 million barrels of oil
into the basin. The gusher followed a blast on the Deepwater
Horizon oil rig, in which 11 workers died.
    U.S. regulators did not begin approving permits until late
February, after industry consortiums had established
rapid-response systems to contain and control a Macondo-like
spill.
    BP, the largest oil producer in the Gulf, has received one
permit so far this year. It allows the company to plug and
abandon a well it had drilled before the spill.
    Dudley said BP's oil output in the Gulf is now 250,000
barrels a day. That's down from 400,000 barrels a day
pre-Macondo.
    BP's loss of high margin barrels from the Gulf of Mexico
contributed to lower than expected second quarter earnings on
Tuesday.
    Executives said BP aims to seek permits to drill production
wells in its prolific Thunder Horse and Atlantis oil fields, as
well as new exploration and appraisal wells.
    "We'll be aggressively applying for permits there in the
Gulf," Dudley said.
    He said the U.S. Bureau of Ocean Energy Management, which
regulates Gulf oil and gas activity, has "made it clear" that
the agency is not holding BP to a higher standard than other
Gulf producers. He insisted BP has set higher standards for
itself, and will return to the Gulf intent on working with less
risk.
    Head of new projects Bernard Looney said the company would
likely start by completing wells which were suspended by the
moratorium rather than spudding new wells.

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