Exxon Mobil nabs permit for deep-water well

The government today gave Exxon Mobil the green light to drill a new well in the Gulf of Mexico that was blocked by last year’s ban on deep-water drilling.

Although it is the fourth deep-water well of its kind to be permitted since the moratorium was lifted last October, the Exxon Mobil project is the first that is relying on equipment from the Houston-based Marine Well Containment Company to respond to any blowout at the site.

Under the approved permit, Exxon Mobil will now be able to drill a well in 6,941 feet of water in its Keathley Canyon Block 919 lease in the Gulf of Mexico — the company’s Hadrian North field about 240 miles from the Louisiana coast.

The federal Bureau of Ocean Energy Management, Regulation and Enforcement, which issued the permit, has focused on restarting 57 deep-water drilling projects that were approved before last year’s spill, including 16 where drilling had begun.  In all three other deep-water projects permitted since Feb. 28 — for operators Noble Energy, BHP Billiton and ATP Oil and Gas — drilling was under way before the Obama administration imposed its ban on some offshore exploration.

By contrast, drilling had not yet begun — but was just about to — at the Exxon Mobil site before last year’s moratorium was imposed. The company had already secured a permit to drill and had a rig on location when the work was suspended under the ban.

The ocean energy bureau did not subject the Exxon Mobil project to heightened environmental scrutiny because it had been permitted before the ban. Other newly proposed drilling — like three deep-water wells Shell Oil Co. proposed in an offshore exploration plan approved Monday — is undergoing environmental assessments by the agency.

Exxon Mobil confirmed it had received a permit for its Hadrian North well “after meeting all of the BOEMRE’s new requirements and regulations.” The company added in a statement that it supports the agency’s “efforts to restart safe drilling in the Gulf of Mexico so that tens of thousands of Americans can return to work.”

To win the permit, Exxon Mobil had to prove to regulators it could swiftly control any blowout at the site and trap gushing crude with the MWCC’s capping stack and other equipment.

The containment company’s current system is designed to contain up to 60,000 barrels per say in wells 8,000 feet below the water. MWCC is separately developing an expanded system for use in up to 10,000 feet of water.

Exxon Mobil was one of the major oil companies — along with Shell, Chevron and ConocoPhillips — that formed the MWCC after last year’s spill. The Houston-based containment company now has other members, including Apache Corp. and Anadarko Petroleum Corp.

A separate organization, Helix Well Containment Group, is offering a subsea well containment system that 22 deep-water oil and gas operators have contracted to use.

Michael Bromwich, the ocean energy bureau director, noted that the pace of permitting deep-water projects had sped up in recent weeks, “since the industry confirmed its capability to contain a deep-water loss of well control and blowout.” Bromwich said that “reflects growing confidence in the industry that it understands and can comply with the applicable requirements, including the containment requirement.”

Additional permit approvals are expected “in the near future,” Bromwich said.

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