BP hopes to ultimately obtain permission to begin drilling about 10 wells to boost output in fields that are already producing oil; none of them would be an exploration well, one of the sources said. No work would be done in the near future on the field discovered by the Macondo well.
Discussions with Interior’s Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) about other BP wells are still underway, focusing on BP’s safety program. Melissa Schwartz, a spokeswoman for the agency, said that BOEMRE Director Michael R. Bromwich meets regularly with companies to discuss their operations and that “BP is no different.”
BP investments in gulf
It was inevitable that BP would, at some point, seek to resume drilling in the Gulf of Mexico, because of the huge investment it has made in deep-water production and prospects there.
With eight deep-water projects, BP is the largest oil producer in the gulf, pulling up 400,000 barrels a day. But many of its platforms require additional “development” drilling to reach their planned capacities.
BP is also the largest leaseholder in the deep waters of the gulf, with more than 650 lease blocks in waters greater than 1,250 feet, athe company’s Web site says.
A resumption of development drilling would help BP, which had extensive plans to boost output in the gulf before last year’s blowout.
Fadel Gheit, oil analyst at Oppenheimer and Sons, said that before the spill, “BP was the Gulf of Mexico,” with the largest reserves, production and leases. “Many people said BP would be put in the penalty box. I’m not so sure,” Gheit said, citing the need for more jobs and production. He also said recent revelations from federal investigations about the failed Macondo blowout preventer blurred the issue of BP’s errors.
The company’s stock is down substantially from before the accident, despite a sharp increase in global oil prices.
For the Obama administration, the request for permits creates an awkward situation. BP still has many foes, but the administration wants to avoid a drop in gulf production after a nearly year-long freeze in deep-water drilling, and the only way to do that is by giving permits to oil giants such as BP. The Gulf of Mexico accounts for 29 percent of U.S. domestic crude oil production, according to the Energy Information Administration.
A presidential moratorium was lifted in the fall, but the Interior agency has asked companies for new information about safety.
Frequently criticized by the oil industry and GOP leaders for delays in permits, President Obama has vigorously defended his administration’s caution in the wake of the massive spill. BOEMRE has recently issued seven deep-water permits, and BP holds a minority stake in one, which will be operated by Noble Energy.