Mon, Mar 14, 2011 - Page 10 News List

BHP to resume drilling in Gulf of Mexico


BHP Billiton Ltd, the world’s biggest mining company, is set to resume its drilling of a production well at its Shenzi oil field in the Gulf of Mexico after winning the second US deep-water permit since BP PLC’s spill last year.

“We are very pleased to be resuming work,” Kelly Quirke, a spokeswoman for Melbourne-based BHP, said in an e-mailed statement yesterday.

The company joins Noble Energy Inc as the only drillers cleared to resume work by the Bureau of Ocean Energy Management, Regulation and Enforcement since BP’s April 20 spill last year.

Lawmakers have criticized the Obama administration for delaying domestic exploration as unrest in the Middle East pushes up oil prices.

BHP Billiton will use equipment from Helix Energy Solutions Group Inc in case of a blow out, Melissa Schwartz, a spokeswoman for the Bureau, said in an e- mail on Friday.

“We are encouraging offshore exploration and production,” US President Barack Obama said during a press conference at the White House on Friday.

“We’re just doing it responsibly,” he said.

Crude oil in New York has climbed 23 percent over the past year. Futures have surged 11 percent since Jan. 14, when the president of Tunisia was ousted as protests rocked the Middle East and North Africa, including Saudi Arabia’s neighbors Yemen, Oman and Bahrain.

Prices touched a 29-month high of US$106.95 a barrel during trading last Monday.

Helix, which provided vessels that responded to the BP disaster, is able to collect 10,000 barrels of oil a day and cap a well in water as deep as 1,706m, Cameron Wallace, a Helix spokesman, said at the time Noble won its permit.

Oil production in federal waters of the Gulf, the largest domestic source of US crude, reached a record high last year, Obama said on Saturday.

The administration had stopped deep-water drilling after the BP blow out to assess companies’ safety and spill-response plans. The moratorium was lifted on Oct. 12.

BHP said on Feb. 15 that the lack of permits in the Gulf “was a major constraint on our business” and resulted in deferring “drilling of high volume production wells.”

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