With little more than a slap on the wrist for its crimes against human life and the environment, BP is ready to begin new drilling in the Gulf. Issued only two permits for deepwater work after the Macondo disaster - to plug and abandon two wells drilled before the Deepwater Horizon - BP has filed application for a new permit to drill four exploration wells in the Kaskida/Keathley Canyon prospect 220 miles off the Louisiana coast.
"I think BP's kind of licking their wounds and trying to figure out at what point do they go in and actually apply for deepwater exploration rights," said Eric Smith, an associate director at the Tulane Energy Institute.
Smith says he sees BP as "lying low and waiting; obviously they were waiting for the other shoe to fall" to get an idea of a possible total of fines the would be assessed.
But "licking their wounds"? Really? Their wounds only require a band-aid and a kiss from their corporate mommies in contrast to the real wounds sustained by eleven families of the men killed on the Deepwater Horizon, the residents of the Coast who have seen their lives turned upside down, and the ecological disaster of devastated marshlands, dead birds and marine animals, and a permanent - and still unfolding - environmental crisis in huge swaths of the Gulf of Mexico.
But BP had not been treading water in the months after the gusher. Several companies have been working in concert with BP in the background, drilling wells in which BP has major interests...
Earlier this month, Chevron unveiled a new oil discovery at its Moccasin prospect in the Gulf of Mexico, a project that BP has an almost 44 percent stake in.
A day later, BHP Billiton, a minority partner of BP, announced that it had drilled a successful appraisal well in the Mad Dog South field, which BP operates with a 60.5 percent stake, and proved to have a giant stash of oil. Last year, BP essentially transferred the operatorship of its Tubular Bells field to Hess Corp. in a $40 million deal that cut its stake in the field from 50 percent to 30 percent.
BP owns 100 percent of Kaskida after buying out Devon’s 30 percent stake in a sweeping $7 billion deal that included other assets in March 2010 — the month before the Macondo blowout.
Sean Shafer, a senior market analyst with Quest Offshore Resources in Sugar Land, estimated that 500 million to 800 million barrels of oil could be recovered from Kaskida using today’s technology, which would make it a “very major project” for the Gulf.The field may hold as much as 4 billion barrels of oil equivalent, according to BP.
And in February, BP received some good news when Noble Energy received the first drilling permit under the government's new safety rules; BP has a 46.5 percent stake in that well.
"For them to be able to participate in a Chevron well and get a percentage of the stake as a result of that, shouldn't be shocking to anybody," Smith said, adding that those types of deals typically can take upwards of five years to cement, and probably were under way before the spill.
In the short term, BP has been working at plugging old wells in the Atlantis field and finishing projects that were being worked before the spill.
BP CEO Bob Dudley says his company plans to continue working in the Gulf, calling it "important"...
"We have plans, we have people working, ready to go back to work, but it's not right for us to comment on individual permits," Dudley said. "And I would add to that that our voluntary principles on getting back to work in the Gulf for us is something that's important that we want to do."
Dudley acknowledged that BP, like many energy companies, incurs costs when its drilling rigs are idle. Getting back to work on plugging efforts will ease that pressure.
"So, all things considered, we have a clear plan," Bernard Looney, BP's executive vice president of development, told analysts in July, adding that BP has "a clear permitting schedule in our mind, and as we get ready and as the regulator allows us permission to proceed, we will proceed on that path."
An oil exec VP named Looney? Damn, that's appropriate...
And speculation rises that environmentalists are pushing the "go slow" meme. Edward Chervenak, an assistant professor of political science at the University of New Orleans, thinks that some want the Deepwater Horizon to be somewhat forgotten. (What? I'm not so sure about that one, Mr. Chervenak...).
"I think that environmentalists are a big part of the Democratic coalition," Chervenak said, "and they may be putting pressure on the Obama administration, saying 'we need to go slow here, the regulations are all set up, and make sure that this doesn't happen again before they start granting these leases.'"
And with the Obama administration planning in December to hold the first auction of oil and natural gas drilling tract leases in the Gulf of Mexico since last year's Deepwater disaster, some observers speculated that BP may play a quieter role.
Mark Gilman, an oil and gas analyst at the Benchmark Company, said last week that he expects "next to nothing of a drilling nature" to come from BP in the coming months.
"They're taking it very, very slowly, so that the activity level is going to be quite low," said Gilman, adding that he doesn't see that changing until mid-2012.
Gilman says he does not think that BP will be terribly active in acquiring new leases in the near future from the area to be opened in the western Gulf, as they have large tracts which they already control.
But Bob Fryar, BP's executive vice president for exploration and production, dismissed the idea that BP would not be active.
"I just would remind everyone that the Gulf of Mexico is a very prolific basin and these wells make substantial rates when they come online," Fryar said. "So I won't get into the numbers of exactly how many wells it takes, but these are big wells and as we get the rigs back going we do anticipate that we can get it ramped up in time here."
Yep, sounds like business as usual...
In statements earlier this year, BP has pledged that "voluntary" safety indices it intends to impose will exceed the governmental guidlines.
“BP has a long and successful history of safely operating in the Gulf of Mexico,” the company said in a statement. “BP remains committed to sharing lessons learned with government, industry and other stakeholders to help prevent future incidents of this nature and improve oil spill response capability in the future.”
Please excuse me for a minute while I pick my jaw up off the floor and clean coffee from my computer monitor...
Okay, back now. :::works jaw to be sure it functions:::
As you might expect, some Democrats and environmentalists don't trust BP any farther than they can throw the Atlantis drilling rig...
Rep. Ed Markey, D-Mass., questioned why “BP is attempting to resume drilling in the Gulf even before comprehensive safety reforms have been implemented.”
Cynthia Sarthou, executive director of the Gulf Restoration Network, noted that the BP filed less than two weeks after federal investigators released their final conclusions about what triggered the 2010 oil spill. That report, released on Sept. 14, concluded that a series of failures — many of them in BP’s control — culminated in the lethal blowout of the Macondo well.
“BP has produced no evidence that it has changed its ways,” Sarthou added. “BP simply should not be allowed to further jeopardize the health of the Gulf of Mexico by pursuing yet more high-risk deep-water drilling.”
Well, duh.
But now, a fact that should send chills down anyone's spine...
BP’s newly proposed wells would be drilled in roughly 6,019 and 6,021 feet of water — about 1,020 feet deeper than Macondo.
In its filing, the company estimated that in case of an emergency, it would take 184 days to drill a relief well at the site. Other interventions — including a system for containing runaway underwater wells — also would be available.
The BP exploration plan for Kaskida/Keathley Canyon 292 and 336 is here.
Public comment (through BOEMRE, I think) remains open on the proposal until October 2.
Contacting Rep. Markey's office would be a good thing also, but there's not much time.
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