BP Plc (BP) has abandoned plans to drill deep-water oil wells in the Great Australian Bight, a remote area off the southern coast of the continent. In a press release, BP said it scrapped the exploration project because the region is not likely to provide more immediate value than other opportunities.
Australia’s oil and gas regulator stymied BP last month by requesting more information on how it planned to manage environmental risks associated with the drilling program. That was the third request for such information, and came as environmentalists, politicians, and academics criticized BP's strategy to respond to a spill.
Australia first gave BP permission to explore the Bight in 2011. The area is a rich marine reserve that is home to tuna, crayfish, and great white sharks that environmentalists say would be affected by an oil spill. The Great Australian Bight holds promise as a major potential oil and gas region, with a geology similar to other resource-rich regions, such as the Mississippi Delta. As yet, the Bight remains untapped.
In the wake of the 2010 Deepwater Horizon incident, Australia and other countries have come under increased pressure to attach environmental provisions to offshore drilling projects. The 2010 Deepwater Horizon spill spewed three million barrels of oil into the Gulf of Mexico in 87 days and cost BP $18.7 billion to settle all U.S. legal claims. Overall, the company lost $62 billion from the accident and further damaged its reputation. The incident was dramatized in the movie, "Deepwater Horizon."
While BP has abandoned the Great Australian Bight, other companies such as Chevron (CVX) and Statoil SA (STO) continue to pursue exploration possibilities in the region.
Read more: BP Ditches Great Australian Bight Oil Project (BP) | Investopedia http://www.investopedia.com/news/bp-ditches-great-australian-bight-oil-project-bp/#ixzz4Qta6cxIM
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