Feds approve BP’s offshore drilling plan

The federal government today approved BP’s plans to drill new deep-water wells in the Gulf of Mexico, signing off on a broad offshore exploration plan for the first time since the lethal blowout of the company’s Macondo well last year.

Federal regulators at the Bureau of Ocean Energy Management okayed the British oil company’s revisions to a previously approved drilling plan for its Kaskida prospect about 192 miles off the Louisiana coast. The move expands BP’s government-approved 2008 plan to drill up to five wells at the site by allowing the company to drill two more wells and change the location of two others.

But before the company could launch work on the wells, federal regulators would also have to approve BP’s plan for responding to any oil spills in the area. And under the just-approved revised exploration plan, BP would still have to secure separate permits to drill specific wells at the Kaskida field.

Offshore drilling regulators are “dedicated to ensuring that the development of the nation’s energy resources is conducted in a safe and environmentally responsible manner,” said Tommy Beaudreau, the director of the Interior Department’s Bureau of Ocean Energy Management, which vetted the plan. “Our review of BP’s plan included verification of BP’s compliance with the heightened standards that all deepwater activities must meet.”

In approving BP’s revised exploration plan, the ocean energy bureau assessed the environmental consequences of the proposed drilling and concluded there would likely be “no significant impact” from the work. Those environmental assessments — generally required under federal law — were routinely waived before the Deepwater Horizon disaster.

According to a news release announcing the move, the ocean energy bureau confirmed BP’s compliance with new drilling safety and environmental standards imposed since last year’s spill.

The agency also said it had verified that BP would abide by relevant “performance standards” the company has pledged to voluntarily follow for any future drilling in the Gulf of Mexico. Those safeguards go beyond federal requirements and include backup emergency equipment and engineer-witnessed testing of cement used in wells.

The company pledged to follow those voluntary safeguards in July, making a bid to reassure regulators and the public that it can resume safe offshore exploration and has learned the lessons of last year’s disaster.

BP reiterated those safety measures today.

“Drilling at Kaskida would be subject to BOEMRE requirements and BP’s voluntary standards we developed from lessons learned after the Deepwater Horizon accident,” the company said in a statement. “These voluntary standards exceed current government requirements.”

BP said that with the approval of its revised exploration plan for Kaskida, the oil company now would be “working through the regulatory process for an application for permit to drill” — the essential next step in launching work on wells at the field.

Administration officials have rejected the idea that BP should be disqualified from drilling, based on its performance last year.

“We’re holding BP not just to our current standards but to higher standards,” said Walter Cruickshank, the ocean energy bureau’s deputy director. “From what we’ve seen over the past 20 months, there is certainly a strong commitment on their part to work better in the future than in the past.”

But some congressional Democrats insisted today that the government was moving too fast to allow a restart of BP’s Gulf drilling program.

“Comprehensive safety legislation hasn’t passed Congress, and BP hasn’t paid the fines they owe for their spill, yet BP is being given back the keys to drill in the Gulf,” said Rep. Ed Markey, D-Mass.

Although this is the first BP exploration plan to win government approval since the 2010 oil spill, federal regulators separately have approved 43 others. Each generally describes all of the exploration activities an operator plans on a specific lease or group of them, with anticipated drilling times, descriptions of drilling vessels and the exact location of each planned well. Only after those broad drilling blueprints are okayed, can companies seek permits to drill specific wells on the same offshore tracts.

While BP has not drilled a new well since the 2010 oil spill, several of its Gulf projects have quietly moved forward. For instance, the Mad Dog South field, which BP operates with a 60.5 percent stake, recently was drilled by minority partner BHP Billiton Petroleum and proved to have a giant stash of oil. Last year, BP essentially transferred the operatorship of its Tubular Bells field to Hess Corp. in a $40 million deal that cut its stake in the field from 50 percent to 30 percent.

BP owns 100 percent of Kaskida after buying out Devon’s 30 percent stake in a $7 billion deal that included other assets in March 2010 — the month before the Macondo well blowout.

BP announced the discovery of its Kaskida field in August 2006 after drilling a six-mile-deep well in an outer area of the U.S. Gulf known as Keathley Canyon and finding an 800-foot section of oily rock.

While the discovery was viewed as significant, it wasn’t until an appraisal well was drilled five miles to the west in 2009 that BP confirmed it was among its biggest finds ever in the U.S. offshore basin, holding as much as 3 billion barrels of oil.

At the time, BP was on a roll in the Gulf, having also just discovered a separate field called Tiber, which has been estimated at roughly the same size as Kaskida. Both are in an ancient layer of rocks that geologists call the Lower Tertiary trend, where Chevron, Shell and others also have made major oil discoveries in recent years.

BP’s newly proposed wells would be drilled in roughly 6,019 and 6,034 feet of water — about 1,030 feet deeper than Macondo. The company has estimated that in case of an emergency, it would take 184 days to drill a relief well at the site. Other interventions — including a system for containing runaway underwater wells — also would be available, BP said.