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U.S. issues second post-spill drilling permit in Gulf

By Reuters
Saturday, March 12, 2011 15:45 EDT
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HOUSTON (Reuters) – The government has given BHP Billiton the second new permit to drill in the Gulf of Mexico since the Macondo oil spill, the Bureau of Ocean Energy Management said on Saturday.

A BHP spokesman confirmed that the new permit has been issued for resumption of drilling of a production well at Shenzi.

“We are very pleased to be resuming work,” BHP spokesman Ruban Yogarajah said.

The well was being drilled in waters 4,234 feet deep, 120 miles off the Louisiana coast south of Houma, at the time BP’s Macondo well blew out in April 2010. The Macondo blowout, about 150 miles northeast of Shenzi, triggered the worst U.S. marine oil spill. Eleven workers died.

After the blowout, the U.S. government imposed a moratorium pending new rules to increase the safety of offshore drilling. The moratorium was lifted in October but it took several months to issue the first permit.

The U.S. Bureau of Ocean Energy Management on February 28 issued the first new permit since the lifting of the moratorium to Noble Energy. At the time, BOEM said more permits would be awarded soon.

Shenzi, located in Green Canyon Blocks 653, 654, 609 and 610, was discovered in 2002 and has been in production since March 2009. The newly approved well is a continuation of production development in the field.

BHP is the operator, with 44 percent ownership. Hess Corp and Repsol are partners, each with 28 percent ownership.

BP, driller of the doomed Macondo well, was a partner in Shenzi but sold its interest to Repsol in 2006.

BHP puts Shenzi platform’s maximum production capacity at 100,000 barrels of oil and 50 million cubic feet of natural gas per day.

(Editing by Vicki Allen)

Source: Reuters US Online Report Business News

Creative Commons image via flickr user mikebaird.

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