BP Plc abandons plans to drill for oil and gas off the south coast of Australia, saying it can get better value for its exploration spending elsewhere.



MELBOURNE, Oct 11 (Reuters) – BP Plc has abandoned plans to drill for oil and gas off the south coast of Australia, saying it can get better value for its exploration spending elsewhere, although it still sees strong potential in the Great Australian Bight.

The decision comes as a win for environmental groups which have heavily opposed drilling off the coast of South Australia, saying it would damage whale and sea lion breeding grounds, a haven for dolphins, and important fisheries.

BP said the Bight project, where it has been working with Norway’s Statoil, would not be able to compete for capital investment with other opportunities in its global portfolio in the foreseeable future.

“This decision isn’t a result of a change in our view of the prospectivity of the region, nor of the ongoing regulatory process,” BP’s head of exploration and production in Australia, Claire Fitzpatrick, said in a statement.

“It is an outcome of our strategy and the relative competitiveness of this project in our portfolio.”

BP was forced to revise its Bight exploration drilling plan late last year and was awaiting a decision by the National Offshore Petroleum Safety and Environmental Management Authority later this month on two wells, and a broader environmental plan by the end of this year.

The agency said on Tuesday it had yet to receive a request from BP to withdraw its application.

The Wilderness Society, which has long fought to stop drilling in the Great Australian Bight, on Tuesday urged the federal government to terminate BP’s leases and cancel all exploration permits in the basin.

“We should not be expanding the fossil fuel industry into pristine treacherous seas where the risk of spills is far greater than we’ve seen before,” Wilderness Society national director Lyndon Schneiders said in a statement.

Others with exploration permits in the region include Chevron Corp, Murphy Oil working with Santos, and Karoon Gas Australia, which just won an exploration permit last week.

Karoon called the Bight Australia’s “most active and prospective frontier oil exploration province.” Industry consultant Wood Mackenzie has estimated it could hold 1.9 billion barrels of oil equivalent, making it a potentially major resource.

BP said Statoil, a 30 percent partner in the exploration licenses for four blocks in the Bight, had accepted its decision to give up on the Bight.

The Australian Petroleum Production and Exploration Association said earlier this year the industry was potentially looking to spend more than A$1 billion ($760 million) on exploration alone in the region.

(Reporting by Sonali Paul; Editing by Richard Pullin)

Copyright 2016 Thomson Reuters. Click for Restrictions.


Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Related Companies

Source link