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First U.S. permit puts BP back in the gulf

March 2, 2011 at 12:18 PM   |   Comments

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LONDON, March 2 (UPI) -- European oil giant BP returns to the Gulf of Mexico as the largest shareholder in the first offshore drilling project given the green light after last year's spill.

U.S. authorities approved a request by Houston's Noble Energy to resume work on the Santiago well in the gulf. While Noble Energy operates the well, the biggest stake in the project, 46.5 percent, is held by non-operating partner BP, the Financial Times newspaper reports.

The Santiago well is less than 20 miles from BP's Deepwater Horizon platform and Macondo well, responsible for the worst oil spill in U.S. history. The Deepwater Horizon oil rig accident killed 11 workers and led to the rig spilling an estimated 170 million gallons of crude into the gulf until it was capped July 15. BP estimates costs for the cleanup to total $30 billion-$40 billion.

Noble Energy had drilled the Santiago well to more than 13,000 feet when the U.S. government, reacting to the accident on the Deepwater Horizon, imposed a moratorium on deep-water oil exploration in the gulf.

U.S. President Barack Obama lifted the moratorium in October, however, no permits to drill were given until Noble Energy received one for the Santiago well Monday.

The Santiago well is the first in the gulf to see operation. This comes as the oil industry is upping the pressure on Washington to reopen the gulf for deep-sea exploration by granting more permits.

The Financial Times quoted Michael Bromwich, the director of the Interior Department's Bureau of Ocean Energy Management, Regulation and Enforcement, which grants the permits, as saying that Noble Energy had "successfully demonstrated that it can drill its deep-water well safely and that it is capable of containing a subsea blowout if it were to occur."

On spill response, Noble Energy cooperates with Helix Energy Solutions Group, a company which was key in sealing BP's Macondo well, the newspaper writes.

The latest permit puts BP back on the map in the gulf, where the company is involved in several potential exploration and drilling projects.

In the aftermath of the gulf spill, BP appointed as Chief Executive Officer Robert Dudley, who has said he's determined to turn BP into a company that is "safer, stronger, more sustainable, more trusted and also more valuable," than before the accident.

BP has sold more than $20 billion worth of assets since the spill and in January signed a joint venture with Rosneft, Russia's largest oil producer, to develop the Arctic's oil and natural gas fields, in a move that analysts said was aimed at diversifying from the gulf.

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