Deepwater drilling permits in the Gulf of Mexico get the green light

This week, Secretary of the Interior Ken Salazar announced that the Bureau of Ocean Energy Management, Regulation and Enforcement has approved the first new deepwater exploration drilling permit in the Gulf of Mexico since last Spring. The BP Deepwater Horizon rig disaster at the Macondo well in April 2010 prompted the government to impose a moratorium on deepwater drilling, pending investigations and reviews of safety and environmental permitting procedures.

The Bureau approved the recent exploration plan, submitted by Shell Offshore (part of Shell Oil’s exploration and production operations) following its completion of a site-specific environmental assessment. It is a supplemental exploration plan for activities not included in the original 1985 exploration plan for the same lease (in the Auger field). New activities include a proposal to drill three exploratory wells 130 miles off of the coast of Louisiana in 2,950 feet of water.

The Department and the Bureau indicate that now the higher bar for submitting new exploration plans has been reached by one company, many more will follow.

The day after Shell got the go-ahead (March 21st) Exxon Mobil got approval to drill a new well in its Hadrian North project in the Keathley Canyon Block, located in nearly 7,000 feet of water, 240 miles offshore Louisiana. In the first four weeks of March the Department also gave permission for Noble Energy, BHP Billiton, ATP Oil and Gas, and Chevron to resume drilling at previously permitted wells.

Will the sudden spate of permitting in the Gulf make the oil industry happy? Well, according to the American Petroleum Institute (API), while its members are happy to see the sudden approval of permits, they think the permitting process is still much too slow. And by the way, API wants the government to open up the unexplored eastern Gulf, too (which the Obama administration put off limits after the Macondo spill).

Perhaps all will be well if the permitting spurt turns into a gusher.

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Picture by Caleb Buxton, used under a CC-Share Alike license.
Stuart Hampton

British editorial veteran Stuart Hampton has been covering oil and gas companies for Hoover's since the Neogene-Quaternary period. Well, actually, since the early 1990s. For the best overview of the oil industry and its history he recommends Daniel Yergin's "The Prize." You can also follow Stuart on Twitter.

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